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Southern Star Central Gas Pipeline Spring Customer Meeting

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Southern Star Central Gas Pipeline Spring Customer Meeting Overland Park, Kansas April 19, 2007 2007 Pipeline Activities Wichita District Run in-line inspection tool ... – PowerPoint PPT presentation

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Title: Southern Star Central Gas Pipeline Spring Customer Meeting


1
Southern Star Central Gas PipelineSpring
Customer Meeting
Overland Park, Kansas April 19, 2007
2
Jerry Morris
  • President
  • Chief Executive Officer



3
2006 Accomplishments
  • Highest customer survey results in 13 years of
    survey
  • No lost time accidents since September 7, 2004
  • No unscheduled firm service interruptions due to
    pipeline failures
  • All planned pipeline integrity work completed
  • Ozark Trails project placed in service 25,000
    dth/d incremental service

4
2006 Accomplishments Cont.
  • Waynoka Supply lateral project Approved
  • Two major business growth opportunities
    identified Westar and Midwest Energy
  • Worked with Front Street, BP Amoco, and NNG to
    attach incremental gas supplies at the BP Jayhawk
    Plant
  • Successfully implemented first phase of AIM and
    SUCCESS initiatives
  • Held our first SSU Leadership Conference

5
LONG-TERM STRATEGIES
  • Maximize Shareholder Value
  • Provide Exceptional Customer Service
  • Operate Safely, Reliably and Efficiently
  • Ensure Workforce Excellence

6
2007 Goals
  • Implement Navision by April 1
  • Achieve Financial Targets
  • Complete Waynoka Project by July 1
  • Complete Westar Midwest Goodman Laterals
  • Implement Base Capex Plan on Time within Budget

7
2007 Goals Cont.
  • Complete HCA Integrity Testing Goal
  • Begin Development of Gas Measurement System
  • Provide Opportunities within SSU
  • Evaluate SUCCESS self-nominations
  • Implement AIM Action Items

8
Bob Bahnick
  • Senior Vice President,
  • Operations Technical Services

9
Operations Technical Support
  • Recent Organizational Changes
  • 2007 Pipeline Activities
  • Pipeline Integrity Projects
  • Pipeline Replacement Projects
  • 2007 Storage Activities
  • KCC Storage Regulation Compliance
  • Storage Work Plans

10
Jim Kline
  • Director
  • Support Services

11
2007 Pipeline Activities
  • Wichita District
  • Run in-line inspection tool for Part of The
    Wichita 16 Line TG (13.6 miles total - 9.1 miles
    HCA)
  • Replace .85 miles of 20 pipe on the Wichita 20
    Line G

12
2007 Pipeline Activities
  • Edmond District
  • Relocate Cement 16 Line VP launcher Relocate
    Cement 16 Line VP receiver to end of Line VP
  • Chemical Cleaning of Cement 16 Line VP
  • Run in-line inspection tool for Cement 16 Line
    VP covering 3.47 miles of HCA

13
2007 Pipeline Activities
  • Independence District
  • Pressure Test 0.79 miles of the Neodesha 8 Line
    EO - 0.50 miles of HCA
  • Replace 0.45 miles of Neodesha 8 Line YB - 0.08
    miles of HCA

14
2007 Pipeline Activities
  • Kansas City District
  • Replace Kansas City 16 Line DLA - 0.32 miles of
    HCA
  • Run in-line inspection for Sugar Creek 16 Line
    XMB (34 miles covering 11.89 miles of HCA
  • Replace Sedalia 12 Line XT at Whiteman AFB
    0.83 miles covering 0.27 miles of HCA

15
2007 Major Pipeline Projects
  • Replace 10 miles of the Ottawa 20 Line ES
  • Original line installed in 1929
  • Constructed with acetylene welds
  • Project scope includes
  • 10 miles of 20
  • Pig launcher and receiver

16
2007 Major Pipeline Projects
  • Replace 0.8 miles of 24 Oklahoma City Line V
  • Replacement will eliminate repair of multiple
    anomalies discovered by 2006 smart pig
  • Relocation from existing route will allow
    pipeline to be in clear zone at Tinker Air Force
    Base.

17
Jim Neukam
  • Manager, Storage Services

18
Southern Star CentralStorage Facilities
  • 8 Storage Fields
  • 514 injection and withdraw wells
  • 53 observation wells
  • 43BCF Storage Capacity
  • 1.225 MM/D Deliverability

19
KCC Storage Regulations
  • Operating Under Provisional Permits
  • Fully Authorized Operating Permit Applications In
    Preparation
  • Multi-Year Initial MIT Program (Kansas)
  • 174 Storage Wells with Previous Tests
  • 114 Storage Well Tests in 2004
  • 113 Storage Well Tests in 2005
  • 114 Storage Well Tests in 2006
  • Repeat MITs on 5 year Frequency

20
KCC Fully Authorized Operating Permits
KCC Granted
Fully Authorized KCC Granted
Operating Permit Provisional
Field Docket Application Due Date Extension Date
Elk City S-013 1/31/2006 10/31/2007
Colony S-014 6/16/2006 11/30/2007
Piqua S-016 7/31/2006 1/31/2008
North Welda S-019 10/31/2006 2/28/2008
Alden S-018 1/31/2007 7/31/2008
McLouth S-015 4/30/2007 5/31/2008
South Welda S-020 7/31/2007 4/30/2008
21
2007 Storage Work Plan
  • 2007 Storage Integrity Plan KS Fields
  • 41 Mechanical Integrity Tests
  • 71 Vertilogs (Alternate MITs)
  • 2007 Storage Integrity Plan Webb Field,
    Oklahoma
  • 1 Mechanical Integrity Tests
  • 14 Vertilogs (Alternate MITs)
  • Storage Well Inspection Valve Testing 567
    Wells

22
2007 Storage Work Plan
  • Complete Three KCC Applications for Fully
    Authorized Operating Permits
  • Colony Storage Field Modifications
  • Piqua Storage Field Modifications
  • North Welda Field Modifications (Pending FERC
    Approval)
  • South Welda Booster Expansion (FERC Filing)
  • Storage Field Performance Evaluations

23
Scott LaMar
  • Manager - Rates Strategic Planning

24
FERC Order 2004 Vacated
  • On November 25, 2003, FERC adopted standards of
    conduct that applied uniformly to natural gas and
    electric utility transmission providers. Order
    2004 revised the standards of conduct from Order
    497. Through Order 2004, the Commission expanded
    the affiliates definition to include basically
    any affiliate involved in the energy (gas or
    electric) industry. Order 497 had previously
    defined affiliates as only those in the marketing
    arena.

25
FERC Order 2004 Vacated Cont.
  • The Court of Appeals vacated Order 2004 on
    November 17, 2006. On Jan 9, 2007, FERC issued
    Interim Rules that reinstated all the standards
    of conduct of Order 2004 that were not at issue
    in the case before the Court of Appeals. FERC is
    currently working on a Notice Of Proposed
    Rulemaking (NOPR) to establish permanent rules
    and have given partial clarification on the
    Interim Rules. All indications point to an
    affiliate definition including only gas marketers
    on our system. We will continue to monitor these
    actions and conduct our business accordingly.

26
Flexibility
  • Although FERC Order 2004 has been vacated, we are
    still required to follow our tariff and treat all
    our shippers in the fairest and most equitable
    manner possible. FERC has been stressing in
    recent years that pipelines follow their tariff
    and backed that up this past year by penalizing
    some pipelines who didnt.
  • We realize how important flexibility is to our
    customers and we will continue to be as flexible
    as possible within the parameters of our tariff.
    We will also continue to explore new services to
    add to our tariff that will offer additional
    value for our customers.

27
2006 Fuel Filing
  • The 2006 Fuel Filing (RP07-96-000) was filed
    12/1/2006
  • Production Area fuel retention dropped from 1.86
    to 1.18
  • Market Area fuel retention dropped from .71 to
    .51
  • Storage fuel retention increased from 3.08 to
    6.29
  • Technical conference was held 2/2/07 in
    Washington, DC to discuss storage fuel
  • Responses have been provided for all data
    requests received

28
Storage Filings
  • During storage field evaluations for the
    KCC fully authorized operating permits required
    by the Kansas Underground Porosity Gas Storage
    Act of 2002, Southern Star identified several
    issues that require FERC certificate amendments.
  • FERC filings have already been made for
    Colony, Piqua, and North Welda. The Colony and
    Piqua filings have been approved by FERC orders.
    Additional filings are expected for the McLouth
    and South Welda storage fields.

29
Storage Filings
  • These storage filings generally request the
    following
  • Expand acreage for gas storage, mineral, and
    pipeline easement rights
  • Redefine the cap rock for each of the fields
  • Construct facilities (compression and laterals)
    to recover gas in fields where migration from
    original storage reservoirs is believed to have
    occurred (only when required)
  • Although costs and time are associated with these
    improvements, they are required by KCC
    regulations and increase the security and
    integrity of our storage fields.

30
Gary Hines
  • Manager - Gas Management

31
Areas of Interest
  • Weather
  • Storage
  • Measurement Reports
  • 2007 Planned Maintenance
  • Gas Quality Waivers

32
Summer Outlook
33
Kansas City HDD Chart
34
SSC EIA 2006 vs. 2007
35
EIA 5 Year Comparison
36
Current Storage Status
  • 5 of 8 Fields Deadweight Tested
  • Why Perform A Low-Inventory Test?
  • GTC Section 13.4
  • Spring Low Inventory
  • perform the end-of-the-withdrawal-cycle shut-in
    pressure test on each field at the point in time
    when SSC reasonably believes the field is at or
    near its lowest inventory level that will be
    achieved.
  • Fall High Inventory
  • Visa-versa

37
Measurement Report Upgrades
  • Initially Rolled Out Feb 9th
  • Reverted To Existing Reports Feb 9th
  • Current Status
  • Validating Security
  • Increasing Flexibility
  • Proposed New Roll Out in May

38
2007 Planned Maintenance
  • Edmond Station
  • April 3rd
  • Expected to last 60 days
  • Capacity cut to 105,000 dth/day
  • Pipeline Integrity
  • Sugar Creek (LS 235, East of Peculiar Sta.)
  • Cement Line (LS 340, S. of Edmond)
  • Line Segment 120, Wichita Area
  • ILI Run Complete

39
2007 Planned Maintenance Contd
Rawlins Hesston
  • April 16 20
  • Arlington Station
  • April 16 25
  • Hoxie Station
  • May 14 18
  • Ogallah Station
  • May 14 25
  • Cheyenne Station
  • September 24 28
  • Yuma Station
  • October 15 19
  • Otis Station

40
2007 Planned Maintenance Contd
  • Review Posted Planned Service Outages (PSO)
  • Posted around the 15th of the month
  • Emailed to those on the PSO email distribution
    list

41
Current Gas Quality Waivers
  • April to June 2007
  • LS 458 (Canadian Blackwell)
  • CO2 up to 1.5 (see posted requirements)
  • LS 377 315 (Guymon Blackwell)
  • HCDP for third-party storage operators
  • Always Evaluating Others

42
Jeff Davis
  • Chairman,
  • Missouri Public Service Commission

43
Natural Gas Purchasing Planning A
Commissioners PerspectiveSouthern Star Central
Gas Pipeline Spring MeetingApril 19, 2007
44
Disclaimer
  • The opinions expressed here today are the
    opinions/impressions of one Commissioner.
    Nothing in this presentation should be attributed
    to any position in any particular case or to any
    other member of the Commission, the Commission as
    a whole, any member(s) of the MO PSC staff or
    anyone else.

45
Topics
  • Missouri Local Distribution Company Natural Gas
    Procurement Responsibilities
  • Natural Gas / Electricity Interdependability
    Issues
  • Natural Gas Market Conditions

46
LDC Responsibilities
  • The LDC is responsible for managing gas costs to
    consumers. They seek to
  • Fill their storage before winter when natural gas
    prices are usually lower. Storage is also
    necessary to maintain reliability of supply
    during the winter.
  • Implement plan for purchasing natural gas in a
    prudent manner that insulates consumers from
    spikes in the price of natural gas.
  • Enter into reliable contracts for the supply and
    delivery of the natural gas.

47
The PGA
  • Purchased Gas Adjustment charge is the charge the
    LDC uses to recover its cost for natural gas.
  • The PGA consists of two elements
  • The LDCs projected cost per unit to receive
    natural gas for delivery to customers mixed with
    any known cost per unit.
  • A factor that returns any overcollections or
    charges any under-collections of gas cost for the
    previous year (the Actual Cost Adjustment - ACA).
  • The LDCs cost per unit to receive natural gas
    typically includes the wholesale cost of the
    natural gas, interstate transportation charges,
    storage charges and fuel for compression.
  • Although the PGA may include incentive plans, the
    PGA does not include a mark-up or profit for
    the LDC.

48
Observations
  • Staff GW Case Observations
  • Three General Categories of Hedging Activity
  • 80 or More (AmerenUE Aquila)
  • 50 to 60 (Atmos, Laclede MGE)
  • Little or None (SMNG, MGU Fidelity)
  • Mostly Year-to-Year Planning (One Year _at_ a Time)
  • Extremely Mild Weather Clearly Impacted Bill
    Levels and Effectiveness of Hedging Programs

49
Observations - continued
  • Staff GW Case Observations
  • Some Utility Hedging Plans Impacted by Hurricane
    Related Price Spikes Avoidance of Entering Into
    Contracts _at_ Record Prices
  • Higher Hedging Activity Did Not Always Result in
    Lower PGA Rates
  • Lower Hedging Activity Did Not Always Result in
    Higher PGA Rates 

50
Responsibilities Smaller LDCs
  • Challenges Facing Smaller LDCs
  • Access to Storage
  • Minimum Size of Futures Contracts (10,000 MMBtu)
    May Limit Participation
  • Minimum Size of Supply Contracts May Limit
    Multi-Year Layering of Purchases
  • Credit Requirements
  • Propane Competition and Need to Stay at or Near
    Market 
  • Smaller utilities still have options but may be
    different than larger utilities.

51
Price Risk Hedging Strategy - AmerenUE
  • Hedge Minimum of 75 of Normal Winter Demand
    Against Market Price Volatility
  • Four Primary Methods to Hedge System Supply
  • Storage Inventory at Fixed WACOG
  • Physical Gas Supply at Fixed Prices or Costless
    Collars
  • Financial Swaps from OTC Markets (Morgan Stanley,
    Bank of America, Goldman Sachs, Deutsche Bank,)
  • NYMEX Futures Contracts
  • Storage Provides Over 50 of Gas Supply During
    Normal Winter
  • Financial Swaps/NYMEX to Fix Prices of Indexed
    Baseload Contracts While Diversifying Credit Risk

52
Diversified Supply Portfolio - Aquila
  • Supply Diversification Goals
  • Mitigate price volatility
  • Promote price stability
  • Provide operational flexibility
  • Diversified Supply Portfolio Mix
  • Monthly index price
  • Fixed price
  • Storage
  • Daily index price
  • Options
  • Dollar Cost Averaging
  • Multiple purchase increments
  • Multiple purchase types

53
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54
Next Steps
  • Extend Timeframe Over Which LDC Purchasing
    Planning Takes Place
  • Minimum 3 Years Supply 5 Years Capacity
  • Spread Out Purchasing Programs
  • Minimum Hedging Levels
  • Regular Reporting Updating Requirements
  • Continue to Encourage Energy Efficiency
    Conservation
  • Continue to Expand Consumer Education Efforts
  • Continue to Encourage Federal State Funding of
    Liheap UtiliCare

55
Methane Megawatts- Interdependability
  • Infrastructure Issues Facing Regulators
  • Natural Gas Pipelines, Gas-Fired Generation
    Electric Transmission Lines
  • Coordination Reliability of Electricity
    Natural Gas
  • How Regulators View the Market Respond to
    Volatile Pricing
  • Natural Gas Gas-Fired Electric Generation
  • How Natural Gas Markets Impact Electric Prices

56
Methane Megawatts
  • Infrastructure Issues Facing Regulators
  • Siting considerations for gas-fired electric
    plants Do you build a pipeline to the plant or
    do you build a plant along the pipeline?
  • Is it easier to site natural gas pipelines or
    electric transmission lines?
  • Are natural gas pipelines cheaper than electric
    transmission lines?
  • What are the reasons to choose building a natural
    gas pipeline or electric transmission line?

57
Methane Megawatts
  • Infrastructure Issues Facing Regulators
    continued
  • One interstate pipeline capacity improvement
    project in our state is largely necessary to
    support the growing demand for natural gas-fired
    generation in a particular area.
  • Much of our energy in Missouri comes from coal
    and nuclear power but a significant portion of
    our peak capacity is met by natural-gas fired
    units.

58
Missouri Generation (MWh) By Energy Source
  • MO plants only
  • Proportion of energy generated by coal (83.5)
    exceeds coal capacity (65.1) because coal plants
    have lower variable cost (except for nuclear) so
    are dispatched first.

59
Source Energy Information Administration, Form
EIA-860, "Annual Electric Generator Report."
60
Gas Demand Outlook
Source Energy and Environmental Analysis (EEA)
61
Methane Megawatts
  • Reliability
  • Natural gas and electric utility industries need
    to be aware of the recommendations of the NERC
    and NAESB Gas/Electricity Interdependency Task
    Force.
  • As natural gas demand grows to support electric
    generation needs this coordination effort will
    only become more important.
  • Some areas of the country now depend on natural
    gas as a primary fuel source for electric
    generation.

62
Methane Megawatts
  • How Regulators View the Market Respond to
    Volatile Pricing
  • Throughout the 1990s the U.S. experienced an
    unprecedented build up gas-fired electric
    generation capacity.
  • Much of that capacity is now needed to meet
    capacity needs during hot, or unusually cold,
    weather.
  • This has impacted summer natural gas markets
    which use to be influenced primarily by natural
    gas LDC storage demand.

63
Methane Megawatts
National Natural Gas Storage Inventory (Source
DOE/EIA)
Natural Gas Demand for Electric Generation
64
Methane Megawatts
  • Natural Gas Market Impacts
  • When natural gas storage levels are impacted by
    summer electricity peaking demand, we often see
    natural gas markets respond.
  • Winter demand for natural gas, storage levels,
    and natural gas supply disruptions are still the
    primary drivers in market prices.
  • Volatility is dealt with by our utilities through
    several different approaches as discussed
    earlier.

65
Methane Megawatts
  • Other Market Drivers?
  • Carbon Tax It is widely felt by our electric
    utilities that a significant carbon tax would
    place upward pressure on natural gas market
    prices. Our electric utilities now analyze this
    scenario as part of their integrated resource
    planning.
  • Renewables For wind projects in particular,
    when capacity needs are assessed it may be
    determined that back-up gas-fired generation is
    prudent.

66
Methane Megawatts
  • Vertically Integrated vs Restructured Utilities
  • In Missouri, our vertically integrated utilities
    have been able to receive large off-system sales
    profits from their coal and nuclear baseload
    fleet selling into a market that reflects natural
    gas-fired generation market prices.
  • This revenue stream has permitted our rates to
    stay among the lowest in the country.

67
Methane Megawatts
  • Vertically Integrated vs Restructured Utilities
  • Where electric restructuring has occurred and
    natural gas generation is the primary fuel,
    significant rate increases have often been
    observed.
  • Retail energy providers may have more difficulty
    building coal or nuclear power plants and this
    may contribute to more natural gas demand in some
    regions.
  • It should be noted that increases in the cost of
    coal, transportation and coal-fired environmental
    upgrades are narrowing the gap.

68
Methane Megawatts
  • Effects of Imperfect Natural Gas Pricing on
    Electric Consumers
  • Where natural gas prices reflect market spikes
    that are not reasonable, for any number of
    reasons, these price spikes can quickly show up
    in electric markets.
  • Other Effects?

69
  • Questions?
  • Contact Information
  • Jeff Davis, Chairman
  • Missouri Public Service Commission
  • Phone (573) 751-3233
  • E-Mail Jeff.Davis_at_psc.mo.gov

70
Dale Sanders
  • Contract Administration

71
Contracts Update
  • Agency Updates
  • Help Desk Availability- (270) 852-5123
  • Password Resets

72
Forgot Password
73
Contracts Update
  • Agency Updates
  • Help Desk Availability- (270) 852-5123
  • Password Resets
  • CSI Access Request Form

74
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75
Contracts Update
  • Some Service Request Forms Online

76
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77
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78
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79
Contracts Update
  • Some Service Request Forms Online
  • CSI Reports Reference List

80
  • Goal - Shipper/Operator Naming Consistency
  • CSI 015 Operator Allocation-Current
  • Operator Location Allocation
    Summary by Flow Date-New
  • CSI 022 Noms vs. Actuals Daily-Current
  • Shipper Noms vs. Actuals Daily- New

81
Contracts Update
  • Some Service Request Forms Online
  • CSI Reports Reference List
  • Security Administrator Audit

82
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83
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84
Contracts Update
  • Some Service Request Forms Online
  • CSI Reports Reference List
  • Security Administrator Audit
  • Online CSI Tutorial

85
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86
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87
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88
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89
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91
Contracts Reminders
  • Sign Search Wildcard
  • System Map Online
  • Contact Changes
  • Gas Supplier List
  • After Lunch Sessions

92
Kevin Renshaw
  • Supervisor, Scheduling

93
Introducing!!!David Bristow
Manager, Scheduling Billing
94
Customer Services Innovations (CSI) Update
A focus group consisting of customers and SSCGP
employees met April 18th to discuss the CSI
system. The groups objective is to determine
system enhancements our customers would like to
see. Enhancements could consist of CSI
functionality, new reports, or improving existing
reports. If anyone would like to request system
enhancements or new reports, please forward your
suggestions to david.m.bristow_at_sscgp.com or
kevin.l.renshaw_at_sscgp.com. Also, if you would
like to join the focus group please contact
either of us at the above email address or David
at (270) 852-4602 and Kevin at (270) 852-4567.
95
Customer Services Innovations (CSI) Update
Customer Members Katie Barton Empire
District Teri Burkett KGS Heather Gaynor
Oneok Kent Kopetzky - Aquila John Hayes
MGE Melissa Masters Seminole Jennifer Mosser -
Tenaska
SSCGP Members Stephanie Hathaway - Contracts Ruth
Clark Gas Accounting Suzanne Capps - IT Kelly
Englehart Customer Services Keith Mock
IT Bridgette Whittinghill Scheduling Kevin
Renshaw Scheduling David Bristow Scheduling
Billing
96
Semi-Annual Request to Rank Nominations
We never miss an opportunity to remind shippers
to rank their nominations and operators to rank
their confirmed noms for allocations. Continuous
enhancement of CSI will allow you to more
efficiently, timely, and accurately schedule and
allocate the gas flowing through SSCGP.
Automating processes requires rankings for cuts,
balancing, and allocations to be completed
correctly and in line with your business needs.
Not Ranking brings out the Incredible Pro-Rata
Team
97
Capacity Allocation
Key Points in Determining Scheduling Priorities
  • Each day begins a new scheduling process.
    Previous day scheduled nominations have no effect
    on the next days scheduling rights. Increases
    within a gas day will have less priority within
    the same class of nominations already scheduled.
  • Higher rights nominations may bump lower rights
    nominations except on ID2.
  • Pooling agreements receive rights from the
    takeaway transportation agreements up to the
    nominations of the takeaway agreements from the
    pool.
  • Direct nominations from transportation agreements
    are allocated rights first then any leftover
    rights are pushed up to pooling agreements.

98
Capacity Allocation
Key Points in Determining Scheduling Priorities
(contd)
  • As with transportation agreements, direct
    nominations from pooling agreements will be
    allocated priority rights with any remaining
    rights be pushed up to the next pooling
    agreement.
  • Transportation agreement nominations from pools
    with a transaction type of 02 overrun will be
    pushed up so the pooling agreements receipts will
    be allocated overrun priority rights.
  • For transportation agreements nominating gas from
    multiple pooling points, after direct nominations
    are allocated priority rights, all remaining
    capacity will be pushed up pro rata between the
    various pooling agreements by pooling area. The
    exception to this will be when the transportation
    agreement stipulates that primary be pushed up to
    a particular pooling agreement.

99
Invoices
  • Gas accounting has been consistently getting
    invoices out on the fifth workday.
  • Most customers have elected to receive their
    invoices through email. Any customer wishing to
    receive their invoice via email please contact
    Dennis Wathen at 270-852-4570 or
    dennis.g.wathen_at_sscgp.com

100
Philip Rullman
  • Manager Customer Service Business Development

101
Provide Exceptional Customer Service
  • Pursue Strategies Actively to Provide Enhanced
    Access to Gas Supply Options
  • Grow Markets
  • Achieve Consistently High Customer Survey Results

102
Access to Gas Supply Options
  • As of April 13, 2007
  • Type I Projects Active - 7
  • Type I is a request for cost estimate
  • Type II Projects Active 5
  • Type II begins the process of ordering material,
    permitting, etc.

103
Access to Gas Supply Options Type III allows
actual construction to begin
Project Name Area Design Capacity Expected Completion Date
NEOK Production Market 2,000 Jul-07
Kansas Processing Market 2,000 Jul-07
Keystone Mulhall Production 2,000 Mar-07
Dart Cherokee Market 10,000 Jul-07
Canary Market 8,000 Mar-07
Acme Market 7,000 Apr-07
104
Access to Gas Supply Options Type IV projects
ready for service
Project Name Area Project Type Design Capacity Final Completion Date
Layne Drumcreek Market Receipt 6,000 Mar-07
Admiral Bay Market Receipt 8,000 Oct-06
105
Access to Gas Supply OptionsAnadarko Waynoka
  • Waynoka Plant Specifics
  • Nominal processing capacity of 200,000 Mcf/d
  • Located in Woods County, Oklahoma
  • Constructed placed in operation 3rd qtr 2006

106
Access to Gas Supply OptionsAnadarko Waynoka
  • Benefits to Southern Star Customers
  • Strategic incremental gas supply for SSC
  • Designed to receive up to 175,000 Mcf/d
  • Connected to line segment 377 (Straight-Blackwell)
  • Lateral in-service early 3rd qtr 2007
  • Anadarko production basin is expected to grow
    over the next five years

107
Grow our MarketsMarket Growth Projects
  • Midwest Energy, Inc. Goodman Energy Center
  • Provide natural gas service to the Midwest Energy
    Goodman Energy Center power generation facility,
    located in Ellis County Kansas. This facility
    will have a total generation capacity of 75 MW.
  • Commercial in-service is targeted for June 1,
    2008
  • Prairie Pride, Inc. (MPUA)
  • This project will provide natural gas service to
    the new Prairie Pride Biodiesel facility and MPUA
    15 MW cogeneration plant.
  • Commercial in-service is targeted for June 15,
    2007

108
Grow our MarketsMarket Growth Projects
  • Westar Energy, Inc. Emporia Energy Center
  • Provide natural gas service to the new Westar
    Emporia Energy Center power generation facility,
    located in Lyon County Kansas, that will have
    initial generating capacity of up to 300
    megawatts (MW), with additional capacity to be
    added in phases, bringing the total capacity to
    600 MW.
  • Commercial in-service is targeted for June 1,
    2008 (300 MW)

109
Imbalance Services
  • Shippers shall maintain thermal balancing of
    receipts and deliveries on a daily basis to the
    maximum extent possible

110
Imbalance ServicesInterruptible Storage Services
- ISS
  • Requires ISS Form of Service Agreement and is
    available to any shipper that has an FTS, SFT, or
    ITS Service Agreement.
  • Charges are commodity plus injection withdrawal
    fee
  • Injections withdrawals are nominated
  • Gas Stored under ISS may be sold in place to
    other parties having sufficient available rate
    schedule FSS or ISS Storage Capacity

111
Imbalance Services Park Loan PLS
  • Service Available to any PLS Shipper
  • Interruptible service
  • Park or Loaned Quantity
  • May be Delivered or Received at
  • A Logical (non-physical point) in the P/M area
  • At any Pool Defined in Rate Schedule PS
  • Must be at the Same Point where PLS Shipper
    Tendered or Borrowed Gas from SSC
  • PLS does not include Transportation
  • PLS and Transportation or Pooling Agreement(s)
    must be Held by the Same Entity
  • Fee Based on Daily Commodity

112
Imbalance ServicesImbalance Transfer - FTS, SFT,
ITS
  • Imbalance trading among Shippers in the same area
  • Treat the imbalance as if it had been injected
    into or withdrawn from the Shipper's storage
    account to the extent Shipper has storage
    capacity available or Shipper's storage inventory
    is sufficient to cover the imbalance (applies
    only to those Shippers who also have storage
    agreements with Southern Star)
  • Adjusting nominations for the remainder of the
    month

113
Imbalance Services Imbalance Transfer TSS,
FSS, ISS
  • Gas stored under this rate schedule may be sold
    in place to other parties having sufficient
    available Rate Schedules FSS or ISS storage
    capacity. Parties wishing to make sales of gas in
    place must obtain confirmation from Southern Star
    24 hours prior to the proposed effective date of
    such sale that the quantity proposed to be sold
    is available and shall notify Southern Star in
    writing that such sale has occurred by the
    effective date of the transaction.

114
Jim Harder
  • VP, Customer Service Business Development

115
Review of 2006 Survey Results
  • Customer Type

Power Generator
6
End-User
9
LDC
40
Marketer
33
Producer
12
116
Review of 2006 Survey Results
  • Management Level

117
Review of 2006 Survey Results
  • Performance
  • Average Performance of 8.4 (HIGHEST EVER)
  • Performance Improvement on 14 of 19 Factors
  • Importance
  • Average Importance 9.2 (Increase)

118
Challenges
  • The Bar has Been Raised for 2007
  • Our Customers Expectations are Greater
  • WE HAVE A PLAN!!!!!!

119
2007 Customer Survey Team
  • Debbie Hendrix
  • Suzanne Capps
  • Ruth Clark
  • Stephanie Hathaway
  • Ronnie Hensley
  • Matt McCoy
  • Todd Millay
  • David Roberts
  • Philip Rullman

120
Ensure SSC Personnel are Accessible
  • Customer Service Managers will Develop
    Departmental Plans to Identify Areas for
    Improvement by April 1, 2007

121
Ensure that SSC Representatives Know our Business
Apply that Knowledge to Solve Customer Issues
  • Understand SSC Business Practices
  • Monthly Roundtables
  • Monthly Business Topics at Business Reviews
  • Understand our Customers Business
  • Establish Customer Visit Standards and Research
  • Senior Management will Meet Annually with their
    Respective Counterparts

122
Provide Appropriate Level of Operating
Flexibility to Customers
  • Gas Mgmt Scheduling will Meet with OBA Parties
    to Discuss SSC Expectations on OBA Agreements
  • DAD Concept
  • Dont say we cant before understanding the issue
  • Always ask why, what, how to fully understand the
    issue
  • Dont say, they said. Take Responsibility

123
Enhance SSC System to Ease Customers Ability to
Conduct Day to Day Business
  • Create Online CSI guide by May 1, 2007
  • Conduct QA Session at Customer Meeting(s)
  • Connect New Users to CS Reps within 2 Days
  • Review Discuss PLS Improvements
  • Enhancement of Pooling Process
  • Clarify CSI Report Names
  • Improve Timely Problem Resolution on CSI Issues
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