Northern Natural Gas
Printable Version
TSP Name:   Northern Natural Gas Company
TSP:   784158214
Notice ID:   059346
Notice Type:   Other
Subject:   FEBRUARY 2021 COLD WEATHER SUMMARY
Critical:   N
Post Date/Time:   03/15/2021 04:35 PM
Notice Effective Date/Time:   03/15/2021 04:35 PM
Notice End Date/Time:   05/01/2021 08:59 AM
For Gas Day(s):   03/15/2021 - 04/30/2021
Notice Status:   Terminate
Required Response Indicator Description:   5-No response required
Notice Text:

To our customer partners:

Northern would like to provide the following overview and commentary on the severe weather event that occurred in February. From February 4 through February 19, Northern’s Market Area system weighted temperature remained at or below 10 degrees Fahrenheit. During this time, Market Area deliveries averaged just over 4.8 Bcf/day, over 1.4 Bcf/day greater than the average for the winter period prior to this extended cold snap.

Northern is pleased to report that its system performed exceptionally well throughout the severe weather event, and Northern did not have any operational issues that required it to curtail volumes to any customer. Northern was successful in delivering to customers the volumes that were supplied to Northern’s system. Our compression facilities attained 100% reliability, underground storage facilities met all delivery orders, and liquefied natural gas facilities achieved 100% availability. All of these were critical to maintaining pressure and line pack requirements. Line pack daily targets were exceeded, putting Northern in a strong position to serve its customers during the unprecedented stretch of high demand.

Beginning late February 14, some natural gas suppliers were unable to deliver volumes into Northern’s Field Area, which includes Texas, New Mexico, Oklahoma and Kansas. In the early hours of February 15, Northern experienced a severe reduction in Field Area receipts primarily caused by freezing production facilities and the loss of electricity to processing plants. Northern notified customers of the severe receipt point shortfall, identifying it as a Force Majeure event to be clear that Northern would act immediately, outside of the normal North American Energy Standards Board natural gas scheduling cycles, to match customers’ delivered volumes to the reduced receipt volumes and maintain an operationally viable balance on the pipeline system to enable Northern to meet all customer commitments. On the morning of February 16, receipts and deliveries on Northern’s system had begun to stabilize and before noon on that date, Northern lifted the Force Majeure event, indicating that it would rely on the normal scheduling processes to handle any non-performance issues on its system. To be clear, throughout this Force Majeure event, Northern remained willing and fully capable of delivering all firm volumes that were received into Northern’s system.

Throughout this timeframe, the penalty structures that are in place in Northern’s tariff that had been recently modified as a result of a collaborative effort between Northern and its customers ensured that the proper incentives were in place to maintain receipt and delivery balance. In recent days, other pipelines have proposed to waive daily imbalance penalties after the fact. We do not believe such an action is appropriate in Northern’s case. Since all penalties collected are distributed back to customers, Northern is not in a position to unilaterally give away customer money. In addition, it is Northern’s opinion that an after-the-fact waiving of penalties actually penalizes customers that appropriately maintained receipt and delivery balance while rewarding those that did not.

Northern is proposing to expedite the return of penalties to customers outside of the annual process to more quickly return collected penalties to its customers. Details of such a proposal will be forthcoming and Northern remains open to other crediting mechanisms or even a penalty waiver if customers agree otherwise.

Overall, Northern’s customers managed their business on Northern very well. Communications between Northern and its customers were made throughout the February cold spell to ensure continuous and efficient service. During the height of the loss of Field Area supply, Northern is aware of at least 325,000 Dth/day of Market Area load that was either reduced or replaced with customer peak-shaving capabilities.

Northern very much appreciates the diligence and professionalism its customers displayed during this period. Thank you for your business and, as always, please let any of us at Northern know if there is anything else we can be doing for you.

 

Mark Hewett

Laura Demman

President and CEO

Vice President

BHE Pipeline Group

Customer Service and Business Development

Northern Natural Gas Company