sion, and is without prejudice to any claim or contentions which may be made by the Commission, its staff, or any other party or person affected by this order in any proceedings, now

pending or hereinafter instituted by or against Florida Gas Transmission Company or any other person or party.

The field review found:

MidLa's PGA filing in Docket No. TA89-1-15-000 inappropriately contained estimates for volumes and costs for the months of March and April 1989. MidLa claims it included estimates in its PGA because at the time it made its filing MidLa was in the process of relocating its offices from Denver, Colorado, to Houston, Texas, and records of the actual amounts were unavailable during the move. MidLa filed its annual PGA on July 3, 1989.

During the field review, MidLa recomputed each of its monthly valuations to reflect the purchases which apparently should have been reflected in the filings in Docket Nos. TA88-2-15-000 and TA89-1-15-000. MidLa's purchased gas amounts were verifiable using the newly developed valuation sheets. However, MidLa exceeded its limitation on the pricing of its company-owned production for the month of April 1988. [MidLa, in a settlement agreement in Docket No. RP86-69-000 et al., implemented a mechanism to stabilize its purchased gas costs which flowed through to its customers during a 36-month collection period. This collection mechanism is known as a "stability price index." The stability price index allows MidLa to price its company-owned production no higher than the sum of: (1) the arithmetic average of the effective indices described in the settlement and (2) five cents (54) per MMBtu.]

MidLa erred when adjusting its storage gas inventory. MidLa made negative adjustments to gas storage withdrawals which should have increased MidLa's storage inventory balances. MidLa, however, decreased its storage inven

tory balances when it made adjustments to reduce gas withdrawn from storage.

MidLa did not adjust its monthly sales figures for invoice changes; therefore, the jurisdictional percentages ultimately used to calculate deferrals were not correct.

Midla valued its exchange gas imbalances using a First-In First-Out (FIFO) method, however, instead of depleting a prior imbalance layer, MidLa averaged the prior imbalance layer with the present month's layer. This methodology, besides not conforming to the Commission regulations, also distorts monthly deferral calculations. When all prior layers were depleted, MidLa again valued its exchange and transportation imbalances using the correct balances.

MidLa is directed to recompute its PGA filings in Docket Nos. TA88-2-15-000 and TA89-1-15-000 to:

(1) reflect the correct purchases amounts; (2) correct its adjustments to its storage gas inventory;

(3) adjust its monthly sales figures and calculate correct jurisdictional percentages to calculate deferrals; and

(4) value its exchange gas imbalances using a First-In First-Out (FIFO) method and deplete prior imbalance layers as provided for by the Commission's regulations.

Based on the field review of MidLa's books and records, the Commission finds MidLa's books and records do not fully support MidLa's PGA filings. Therefore, MidLa is ordered to file as part of its next annual PGA filing, working papers showing the recomputation of the gas costs in Docket Nos. TA88-2-63-000 and TA89-1-63-000, as described in the body of this order, and reflect an entry to the current refund subaccount of Account No. 191 to make the necessary correction to its costs as a result of the recomputations. The recomputations are subject to further review and any action deemed necessary as a result of that review.

Letter Order

The tariff sheets, filed on electronic medium only, listed on Enclosure A are accepted in satisfactory compliance with the Commission's July 31, 1990 letter order [52 FERC ¶ 61,183]. In addition, the tariff sheets listed as Item No. 1 of Enclosure B are accepted, effective August 1, 1990. The tariff sheets listed as Item No. 2 of Enclosure B are rejected as moot.

On June 29, 1990, Midwestern Gas Transmission Company (Midwestern) filed copies of its FERC Gas Tariff, First Revised Volume No. 1, pursuant to Order No. 493 [FERC Statutes and Regulations ¶30,808] and sections 154 and 385.2011 of the Commission's regulations. See Enclosure C. On July 31, 1990, in Docket No. GT90-34-000, the Commission accepted and suspended the tariff sheets effective August 1, 1990, subject to refund and subject to further review. 52 FERC ¶ 61,183 (1990). In addition, the Commission order directed Midwestern, within 30 days of the date of the order, to file revised tariff sheets numbered 190 through 200 and caption them "Reserved for Future Use," and to refile the electronic copy of its tariff on electronic media to conform to the applicable record format specifications. Since Midwestern made the necessary refiling, and the Commission's review of the electronic filing of the tariff found the electronic tariff to be a faithful reproduction of the paper version of the tariff, the refund obligation imposed in the Commission's July 31st order is terminated.

Midwestern's tariff sheet submitted December 4th, and Second Revised Sheet No. 62B and First Revised Sheet No. 64A submitted on November 16, 1990 are incorrectly paginated. Under exhibit C, Order No. 493, a sheet should be designated "Substitute" when it is being filed in replacement of a sheet in the same docket already on file. See Order No. 493, exhibit C, p. 26, Tariff Sheet Pagination Guidelines. Midwestern is directed to follow this pagination rule in all future filings.

Notices of intervention and unopposed timely filed motions to intervene are granted pursuant to the operation of Rule 214 of the

Commission's Rules of Practice and Procedure (18 C.F.R. section 385.214). Any opposed or untimely filed motion to intervene is governed by the provisions of Rule 214.

This acceptance for filing shall not be construed as a waiver of the requirements of section 7 of the Natural Gas Act, as amended, nor shall it be construed as constituting approval of the referenced filing or of any rate, charge, classification, or any rule, regulation, or practice affecting such rate or service contained in your tariff; nor shall such acceptance be deemed as recognition of any claimed contractual right or obligation associated therewith; and such acceptance is without prejudice to any findings or orders which have been or may hereafter be made by the Commission in any proceeding now pending or hereafter instituted by or against your company.

Enclosure A

Midwestern Gas Transmission Company Docket No. GT90-34-001, filed August 1, 1990 Filed on electronic medium only

Accepted Effective August 1, 1990

First Revised Volume No. 1
Title Page

Second Revised Sheet No. 1

First Revised Sheet Nos. 2 through 4
Twelfth Revised Sheet No. 5 *
Seventh Revised Sheet No. 6*
First Revised Sheet Nos. 8 and 9
Second Revised Sheet Nos. 10 and 11
First Revised Sheet Nos. 12 through 19
Second Revised Sheet No. 20

First Revised Sheet Nos. 21 through 29
Second Revised Sheet No. 30

First Revised Sheet Nos. 31 through 40
Second Revised Sheet Nos. 41 through 44
Fourth Revised Sheet No. 45

- Third Revised Sheet No. 46
First Revised Sheet Nos. 47 through 49
Second Revised Sheet Nos. 50 through 53
Fourth Revised Sheet No. 54
Second Revised Sheet No. 55
First Revised Sheet Nos. 56 through 60
Second Revised Sheet No. 61
Fourth Revised Sheet No. 62
Second Revised Sheet Nos. 62A

Enclosure C

Midwestern Gas Transmission Company Docket No. GT90-34-000 filed June 29, 1990

First Revised Volume No. 1
Title Page

Second Revised Sheet No. 1

First Revised Sheet Nos. 2 through 4
Twelfth Revised Sheet No. 5
Seventh Revised Sheet No. 6

Fifth Revised Sheet No. 7

First Revised Sheet Nos. 8 and 9
Second Revised Sheet Nos. 10 and 11
First Revised Sheet Nos. 12 through 19
Second Revised Sheet No. 20

First Revised Sheet Nos. 21 through 29
Second Revised Sheet No. 30

First Revised Sheet Nos. 31 through 40
Second Revised Sheet Nos. 41 through 44
Fourth Revised Sheet No. 45

Third Revised Sheet No. 46

First Revised Sheet Nos. 47 through 49
Second Revised Sheet Nos. 50 through 53
Fourth Revised Sheet No. 54
Second Revised Sheet No. 55

First Revised Sheet Nos. 56 through 60
Second Revised Sheet No. 61
Fourth Revised Sheet No. 62
Second Revised Sheet Nos. 62A and 62B
First Revised Sheet No. 62C
Second Revised Sheet No. 62D
Third Revised Sheet Nos. 62E and 62F
First Revised Sheet Nos. 62G and 63
Second Revised Sheet Nos. 64 and 64A
Second Revised Sheet Nos. 65 and 66
First Revised Sheet Nos. 67 and 68
Second Revised Sheet Nos. 69 through 75
First Revised Sheet Nos. 76 through 81
Second Revised Sheet Nos. 82 through 87
First Revised Sheet Nos. 88 through 120
Second Revised Sheet Nos. 121 through 123
First Revised Sheet Nos. 124 through 130
Second Revised Sheet No. 131

First Revised Sheet Nos. 132 through 189

Letter Order

Reference: See attached appendix.

The tariff sheets listed in the attached appendix have been accepted effective November 1, 1990, subject to refund and subject to Texas Eastern Transmission Corporation (TETCO) refiling certain tariff sheets within 15 days to reflect the revisions discussed in the body of this order.

On October 31, 1990 [53 FERC ¶ 61,144], the Commission issued an order in Docket No. RP91-4-000 accepting and suspending the tariff sheets, subject to refund and conditions (as more fully discussed below) to be effective November 1, 1990, and consolidating the filing with proceedings already set for hearing.

The Commission directed TETCO to file revised tariff sheets to provide that a customer receiving discounted service under a "New Interruptible Agreement" or authorized overrun service will be afforded the option to pay a higher rate to avoid curtailment or interruption and for the purpose of determining priorities of service for scheduling.

Discussion

TETCO has provided in the instant filing Sub Third Revised Sheet No. 439, Original Sheet No. 439A, Sub Fifth Revised Sheet No. 467, Sub Original Sheet No. 467A, and Sub Original Sheet No. 467B which reflect that a customer who is receiving discounted transportation service may elect to pay the maximum rate to avoid curtailment; and may elect to pay a higher rate, up to the maximum applicable, to receive the necessary priority to schedule service as directed by the Commission's October 31 order.

Based upon the foregoing discussion we find that TETCO has complied with our October 31 order regarding the above issues. Except with respect to a matter concerning when a customer may elect to avoid curtailment by paying a higher rate.

Protest

On November 30, 1990 Consolidated Edison of New York, Inc., filed a protest of TETCO's revised section 12.7(b) as contained in the instant filing. Section 12.7(b) sets forth that during a period of interruption or curtailment customers receiving discounted service under a New Interruptible Agreement will be required to pay the maximum applicable rate to avoid curtailment and that it must make its election to pay the maximum rate at the time the customer and TETCO agree to a discounted rate. Con Ed argues that it should not be required to provide TETCO an election to pay the maximum applicable rate to avoid curtailment at the time a transportation agreement is reached. Con Ed's argument is based on an

order issued by the Commission in Natural Gas Pipeline Company of America (39 FERC ¶ 61,153, at p. 61,595)(NGPL) in which the Commission required that NGPL provide its interruptible transportation customers five days' notice prior to an interruption of service. Con Ed believes that the application of the Commission's requirement, of a 5-day notice prior to the interruption of customer in favor of another customer willing to pay a higher rate, should preclude TETCO from requiring its customers to elect at the time an agreement is reached as to whether or not the customer will be willing to pay the maximum applicable rate to avoid curtailment.

Con Ed's argument is not consistent with Commission policy. In the NGPL order the Commission required five days' notice prior to the interruption of a shipper paying a discounted rate in order to provide service to a shipper willing to pay a higher rate. The Commission determined that tariff language dealing with this type of anticipated capacity constraint was defined as a scheduling provision. Con Ed has attempted in its protest to apply this rule to section 12.7(b) which deals with curtailment on TETCO's system. The nobump provision contained in section 27.5 of TETCO's tariff provides that once a customer's nomination for service has been scheduled it cannot be interrupted because another customer with the same priority of service is willing to pay a higher rate. Con Ed is protected from the circumstances addressed by the Commission in the NGPL order because Con Ed cannot be bumped, therefore Con Ed's argument is rejected.

Con Ed further argues that TETCO should be required to provide 24 hours' telephonic notice prior to the imposition of maximum rates due to curtailment.

In response to our October 31 order TETCO filed Sub Third Revised Sheet No. 439 and Original Sheet No. 439A which also contain a provision which sets forth that the customer's "(buyers) election to pay the maximum applicable rate shall be a one time election effective during such periods of interruption of curtailment regardless of duration. Buyers election shall be made at the time Seller and Buyer agree to such discounted rate."

Although Con Ed's protest is not properly based, we find that TETCO's customers should not be required to elect, at the time a discounted transportation agreement is reached, whether or not the customer will be willing to pay the maximum applicable rate, to maintain service during periods of curtailment, for the duration of the agreement. TETCO's scheduling provision contained in section 27.2(a) provides that interruptible service customers must