February 2008 Update

How FT-SN and SNB work together:

The maximum SNB quantity can be no greater than the FT-SN daily quantity
Customers can have an account balance of +/- 50% of the SNB contract demand
Gas can be nominated to and from the SNB account at an hourly flow rate not greater than 5% of the FT-SN contract demand

For example:

A customer has a FT-SN contract for 100,000 GJ/d (equals a maximum 5,000 GJ/hr of flow rate)
The customer also has a SNB contract for 10,000 GJ (+/- 5000 GJ) with account balance starting at 0 GJ
3,000 GJ/hr are scheduled to flow at the start of the day
2,500 GJ/hr additional supply is required due to an Independent Electricity System Operator dispatch instruction on short notice; the total delivery required now equals 5,500 GJ/hr
If the customer could not nominate additional upstream supply in time, the customer could nominate the additional supply from its SNB account, for a maximum of 2 hours (2,500 GJ/hr for 2 hours equals a -5,000 GJ account balance)

The National Energy Board (NEB) approved the tolling methodology for TransCanada’s Short Notice Balancing Service (SNB) on February 13, 2008. SNB is a firm service that facilitates the effective operation of TransCanada’s Firm Transportation Short Notice (FT-SN) service by providing flexibility (using compression and linepack) for balancing purposes

TransCanada received initial approval from the NEB on December 14, 2006 to implement the Short Notice Balancing service. However the NEB directed TransCanada to develop an alternative tolling method for the service. The revised tolling methodology is simpler, more transparent and is not situation-specific and, therefore, will provide greater toll certainty for the gas-fired power generation market. The methodology calculates a SNB Toll using a system average unit cost of facilities required to provide SNB service. The methodology provides for a uniform toll to all locations within a domestic Toll Zone (such as the Eastern Zone) and all export points adjacent to that zone (i.e. Niagara, Chippawa, Waddington, etc.).

SNB and FT-SN services are available to any customer who wishes to contract for them and who is able to operate under the respective service parameters. “Firm Transportation– Short Notice and Short Notice Balancing are innovative services, “says Tim Stringer, Manager, Commercial East. “For example, FT-SN and SNB services can be used together to help power generators reconcile the day-ahead gas market with the real-time power market by reserving pipeline capacity so that the power generators can be assured of getting pipeline transportation to their plant. Both services provide 96 flow rate nomination windows per day so generators can closely match nominations to gas flows and thereby avoid imbalance penalties. Access to a SNB account will allow customers to start or stop flowing gas on short notice in the event that an upstream service provider does not have matching nomination windows.”

TransCanada’s Customer Service team is currently working to complete the system modifications required to implement FT-SN and SNB services. Look for additional information on SNB service in future issues of Update.