11.2(a) inflation Adjustment Letter FINALwesternpipelines.elpaso.com/Ferc/FERC Documents/EPNG/RP17-216 E… · annual inflation adjustment to be effective ... by comparing the most

November 30, 2016

Federal Energy Regulatory Commission 888 First Street, N.E. Washington, D.C. 20426 Attention: Ms. Kimberly D. Bose, Secretary Re: Article 11.2(a) Inflation Adjustment Filing;

El Paso Natural Gas Company, L.L.C. Docket No. RP17- Commissioners: El Paso Natural Gas Company, L.L.C. ("EPNG") tenders for filing and acceptance by the Federal Energy Regulatory Commission ("Commission") Version 13.0.0 of Part IV: General Terms and Conditions, Section 37 “Article 11.2 Provisions” for its Third Revised Volume No. 1A Tariff (“Tariff”). Proposed with an effective date of January 1, 2017, this tariff record adjusts EPNG’s Article 11.2(a) rates for inflation, in accordance with EPNG’s Tariff and the rate case settlement in Docket No. RP95-363 (”1996 Settlement”).1 Background

Section 37.3 of the General Terms and Conditions ("GT&C") of EPNG's

Tariff sets forth provisions requiring EPNG to adjust the Article 11.2(a) rates annually for inflation.2 Pursuant to these provisions, EPNG increases, on an annual basis, the Operations and Maintenance (“O&M”) and Other Taxes portion of the reservation rate and usage charges for the Article 11.2(a) Rate Schedule FT-1 service and a portion of the base rates for the Article 11.2(a) Rate Schedule FT-2 service that were in effect for the preceding year. The annual adjustment is limited to 93% of the increase in the Implicit Price Deflator to the Gross Domestic Product ("GDP-IPD") as published by the Department of Commerce's Bureau of Economic Analysis ("BEA"). The annual increase in rates may not be more than 4.5% or less than 1% of the prior year's total base rates.

____________________ 1 See El Paso Natural Gas Company, 79 FERC ¶ 61,028 (1997) (Order Approving Contested

Settlement). 2 These provisions were added as part of the implementation of the 1996 Settlement.

Federal Energy Regulatory Commission 2 November 30, 2016

Description of Filing This filing is submitted pursuant to Subpart C of Part 154 of the

Commission's regulations and Section 37.3 of the GT&C of EPNG's Tariff. Section 37 of the GT&C is submitted to revise the Article 11.2(a) rates to reflect the inflation adjustment, as described below. Pursuant to EPNG’s Tariff, for the annual inflation adjustment to be effective January 1, 2017, the GDP-IPD increase is determined by comparing the most recently published final GDP-IPD index to the one used in the previous year’s filing or, if the BEA has modified the benchmark index for the GDP-IPD, the restated GDP-IPD for the previous year. 3

For purposes of calculating the GDP-IPD increase, the final GDP-IPD

index for the second quarter of 2016 and the GDP-IPD for the same period of 2015 are compared. The resulting annual change in the GDP-IPD is 1.2182%.4 However, as stated earlier, the adjustment is limited to 93% of the annual change in GDP-IPD. Therefore, the adjusted annual change is 1.1329%. This change in GDP-IPD, as adjusted for the O&M and Other Taxes portion of the base rates according to the formula specified in the Tariff, produces an overall increase to the base rates of less than 1%.5 Given that this percentage is less than the minimum inflation adjustment provided in EPNG’s Tariff (i.e., 1.00%), EPNG is proposing to increase the Article 11.2(a) base reservation and usage rates by 1.00%. The revised rate calculations are presented in Appendix B.

Pursuant to Section 37.3(c) of the GT&C, EPNG has separately identified

system-wide usage rates. The system-wide usage rates are applied to receipts that are not defined by receipt basin, such as imbalance paybacks. Accordingly, EPNG updates those system-wide usage rates in this filing and shows the calculations of those rates in Appendix C. Section 154.204 Discussion

Pursuant to Section 154.204 of the Commission’s regulations, EPNG

states the following: (a) EPNG does not anticipate any significant increase in revenues as a

result of these tariff changes. These changes are required by existing tariff provisions.

____________________ 3 At the time of preparation of this filing, the final third quarter 2016 index is not yet published;

therefore, consistent with EPNG’s tariff, the second quarter index was used. 4 See Appendix D for the calculation of the change in the GDP-IPD. 5 See Appendix B.


(b) EPNG is unaware of any filings pending before the Commission that will significantly affect this filing.6

Procedural Matters Inasmuch as this filing is fully described in this transmittal letter, the statement of the nature, the reasons and the basis for the instant tariff filing required by Section 154.7(a)(6) of the Commission’s regulations is omitted.

In accordance with the applicable provisions of Part 154 of the Commission’s regulations, EPNG is submitting an eTariff XML package that includes the following:

a) a transmittal letter; b) clean and marked versions of the tariff record in PDF format; c) Appendix A – a summary of the revised Docket No. RP95-

363 Article 11.2(a) rates, as adjusted for inflation; d) Appendix B – a schedule detailing calculation of the rates; e) Appendix C – computation of system-wide average usage

rates; and f) Appendix D – derivation of the annual escalation factor as

computed based on the annual change in the GDP-IPD, along with the pertinent page from the Bureau of Economic Affairs second quarter (final) news release.

EPNG respectfully requests the Commission accept the tendered tariff record for filing and permit it to become effective on January 1, 2017, which is not less than 30 days following the date of the filing. With respect to any tariff provision the Commission allows to go into effect without change, EPNG hereby moves to place the tendered tariff provision into effect at the end of the suspension period, if any, specified by the Commission.

Additionally, pursuant to Section 154.7(a)(7) of the Commission’s regulations, EPNG respectfully requests that the Commission grant all necessary waivers in order to effectuate this filing.

____________________ 6 See 133 FERC ¶ 61,259 where the Commission accepted the 2012 Article 11.2 Inflation Filing

in Docket No. RP11-1562-000 subject to the outcome of the proceeding in Docket No. RP10-1398-000. However, no issues related to Docket No. RP11-1562-000 were listed in the litigated statement of issues or addressed by the Initial Decision (139 FERC ¶ 63,020 (2012)), Opinion No. 528 (145 FERC ¶ 61,040), or Opinion No. 528-A (154 FERC ¶ 61,120) in Docket No. RP10-1398-000. Therefore, EPNG believes that while Docket No. RP11-1562-000 is still pending before the Commission, the final outcome in Docket No. RP11-1562-000 will not impact these rates.


Correspondence and communications concerning this filing should be

directed to:

Ms. M. Catherine Rezendes Mr. David R. Cain Director, Rates Assistant General Counsel El Paso Natural Gas Company, L.L.C. El Paso Natural Gas Company, L.L.C. Post Office Box 1087 Post Office Box 1087 Colorado Springs, CO 80944 Colorado Springs, CO 80944 Telephone: (719) 520-4743 Telephone: (719) 520-4534 Facsimile: (719) 520-4697 Facsimile: (719) 520-4898 [email protected] [email protected]

These persons have been designated for service in accordance with Rule

203 of the Commission's Rules of Practice and Procedure. The undersigned hereby certifies that she has read this filing and knows

(i) the contents of such filing and the attachments; (ii) that the contents as stated in the filing and attachments are true to the best of her knowledge and belief; and (iii) that she possesses full power and authority to sign this filing.

Respectfully submitted, EL PASO NATURAL GAS COMPANY, L.L.C.

By, ________/s/________________ M. Catherine Rezendes

Director, Rates

Enclosures

Certificate of Service

I hereby certify that I have this day caused a copy of the foregoing document to be served upon all shippers on EPNG's system and interested state regulatory commissions, in accordance with the requirements of Sections 154.208 and 385.2010 of the Federal Energy Regulatory Commission's Rules of Practice and Procedures. Dated at Colorado Springs, Colorado as of this 30th day of November 2016.

_________/s/______________ M. Catherine Rezendes

Post Office Box 1087 Colorado Springs, CO 80944 (719) 520-4743

Appendix A Article 11.2(a) Rates Escalated

Appendix B Escalation of Rates

Appendix C System Average Usage Rates

Appendix D Derivation of Escalator

El Paso Natural Gas Company, L.L.C.

Appendix Table of Contents


Docket No. RP17-___

Appendix A

Article 11.2(a) Rates Escalated

Docket No. RP17-___Appendix APage 1 of 2

FT-1

Line Maximum Minimum

No. Description Rate Rate

(a) (b) (c)

Mainline Transmission Base Reservation Rates

1 Production Area $ 4.0198 $ 0.0000

2 Texas $ 5.8844 $ 0.0000

3 New Mexico $ 6.7878 $ 0.0000

4 Arizona $ 9.2092 $ 0.0000

5 Nevada $ 9.3309 $ 0.0000

6 California $ 10.9418 $ 0.0000

Mainline Transmission Usage Rates

From San Juan Basin to:

7 Production Area $ 0.0030 $ 0.0030

8 Texas $ 0.0032 $ 0.0032

9 New Mexico $ 0.0180 $ 0.0180

10 Arizona $ 0.0234 $ 0.0234

11 Nevada $ 0.0222 $ 0.0222

12 California $ 0.0203 $ 0.0203

From Permian Basin to:

13 Production Area $ 0.0030 $ 0.0030

14 Texas $ 0.0075 $ 0.0075

15 New Mexico $ 0.0185 $ 0.0185

16 Arizona $ 0.0271 $ 0.0271

17 Nevada $ 0.0435 $ 0.0435

18 California $ 0.0415 $ 0.0415

From Anadarko Basin to:

19 Production Area $ 0.0030 $ 0.0030

20 Texas $ 0.0084 $ 0.0084

21 New Mexico $ 0.0289 $ 0.0289

22 Arizona $ 0.0363 $ 0.0363

23 Nevada $ 0.0479 $ 0.0479

24 California $ 0.0465 $ 0.0465

From California to:

25 Production Area $ 0.0161 $ 0.0161

26 Texas $ 0.0161 $ 0.0161

27 New Mexico $ 0.0161 $ 0.0161

28 Arizona $ 0.0161 $ 0.0161

29 Nevada $ 0.0161 $ 0.0161

30 California $ 0.0161 $ 0.0161

El Paso Natural Gas Company, L.L.C.FT-1 Firm Transportation Rates

2017 Article 11.2(a) Rates Escalated Per Tariff(Excludes Surcharges)

Docket No. RP17-___Appendix APage 2 of 2

FT-2Line Maximum MinimumNo. Description Rate Rate

(a) (b) (c)

Mainline Transmission Usage Rates:

From San Juan Basin to:1 Anadarko $ 0.3254 $ 0.00322 Permian $ 0.3254 $ 0.00323 San Juan $ 0.3250 $ 0.00304 Texas $ 0.3271 $ 0.00325 New Mexico $ 0.3559 $ 0.01806 Arizona $ 0.5235 $ 0.0234

From Permian Basin to:7 Anadarko $ 0.3329 $ 0.00758 Permian $ 0.3250 $ 0.00309 San Juan $ 0.3547 $ 0.018510 Texas $ 0.3329 $ 0.007511 New Mexico $ 0.3547 $ 0.018512 Arizona $ 0.5275 $ 0.0271

From Anadarko Basin to:13 Anadarko $ 0.3250 $ 0.003014 Permian $ 0.3348 $ 0.008415 San Juan $ 0.3757 $ 0.028916 Texas $ 0.3348 $ 0.008417 New Mexico $ 0.3757 $ 0.028918 Arizona $ 0.5455 $ 0.0363

From California to:19 Anadarko $ 0.3737 $ 0.016120 Permian $ 0.3737 $ 0.016121 San Juan $ 0.3737 $ 0.016122 Texas $ 0.3737 $ 0.016123 New Mexico $ 0.3737 $ 0.016124 Arizona $ 0.3737 $ 0.0161

2017 Article 11.2(a) Rates Escalated Per Tariff(Excludes Surcharges)



Docket No. RP17-___

Appendix B

Escalation of Rates

Docket No. RP17-__Appendix BPage 1 of 6

Ln. Producing Ln.No. California Nevada Arizona New Mexico Texas Area No.

(b) (c) (d) (e) (f) (g)Reservation

Minimum Escalation - Floor1 Rate for 2016 1/ 10.8335$ 9.2385$ 9.1180$ 6.7206$ 5.8261$ 3.9800$ 12 Minimum Inflation Percent 1% 1% 1% 1% 1% 1% 23 Escalated Threshold Minimum 0.1083$ 0.0924$ 0.0912$ 0.0672$ 0.0583$ 0.0398$ 3

Maximum Escalation - Ceiling4 Rate for 2016 1/ 10.8335$ 9.2385$ 9.1180$ 6.7206$ 5.8261$ 3.9800$ 45 Maximum Inflation Percent 4.5% 4.5% 4.5% 4.5% 4.5% 4.5% 56 Escalated Threshold Maximum 0.4875$ 0.4157$ 0.4103$ 0.3024$ 0.2622$ 0.1791$ 6

GDP-IPD Calculation7 O&M,OT - Year 2016 Portion of the Rate 2/ 6.6360$ 5.6591$ 5.5852$ 4.1167$ 3.5687$ 2.4380$ 78 Year 2016 Escalation 2/ 0.1073$ 0.0915$ 0.0903$ 0.0665$ 0.0577$ 0.0394$ 89 Year 2017 O&M, and Other Taxes 6.7433$ 5.7506$ 5.6755$ 4.1832$ 3.6264$ 2.4774$ 9

10 GDP-IPD Escalation Factor 3/ 1.2182% 1.2182% 1.2182% 1.2182% 1.2182% 1.2182% 1011 Applicable Percent of GDP-IPD 93.0000% 93.0000% 93.0000% 93.0000% 93.0000% 93.0000% 1112 Reduced Inflation Adjustment 1.1329% 1.1329% 1.1329% 1.1329% 1.1329% 1.1329% 12

13 Applied GDP-IPD Escalator (Ln 9 * Ln 12) 0.0764$ 0.0651$ 0.0643$ 0.0474$ 0.0411$ 0.0281$ 13

Selected Escalation Amount14 Rate for 2016 1/ 10.8335$ 9.2385$ 9.1180$ 6.7206$ 5.8261$ 3.9800$ 1415 Selected Escalation 4/ 0.1083$ 0.0924$ 0.0912$ 0.0672$ 0.0583$ 0.0398$ 1516 Total Rate Year 2017 10.9418$ 9.3309$ 9.2092$ 6.7878$ 5.8844$ 4.0198$ 16

17 100% Load Factor Rate (excluding usage) 0.3597$ 0.3068$ 0.3028$ 0.2232$ 0.1935$ 0.1322$ 17

3/ See Appendix D, Page 1 of 2.4/ If the GDP-IPD escalation calculation is not within the minimum (floor) and the maximum (ceiling) calculation then the applicable minimum or maximum calculated escalation is selected.

1/ See 2016 Docket No. RP16-237, Tab B, Page 1, Line 16.

El Paso Natural Gas Company, L.L.C.Escalation of Rates Per Tariff

2017 FT-1 Reservation Base Rates

Description(a)

2/ See 2016 Docket No. RP16-237, Tab B, Page 1, Lines 9 and 15.


Line Producing LineNo. California Nevada Arizona New Mexico Texas Area No.

(b) (c) (d) (e) (f) (g)From San Juan:



GDP-IPD Calculation7 O&M,OT - Year 2016 Portion of the Rate 2/ 0.0124$ 0.0135$ 0.0142$ 0.0109$ 0.0018$ 0.0016$ 78 Year 2016 Escalation 2/ 0.0002$ 0.0002$ 0.0002$ 0.0002$ -$ -$ 89 Year 2017 O&M, and Other Taxes 0.0126$ 0.0137$ 0.0144$ 0.0111$ 0.0018$ 0.0016$ 9



Selected Escalation Amount14 Rate for 2016 1/ 0.0201$ 0.0220$ 0.0232$ 0.0178$ 0.0032$ 0.0030$ 1415 Selected Escalation 4/ 0.0002 0.0002 0.0002 0.0002 0.0000 0.0000 1516 Total Usage Rate Year 2017 0.0203$ 0.0222$ 0.0234$ 0.0180$ 0.0032$ 0.0030$ 16

Total Rate17 Reservation (Sheet 1, Line 16) 10.9418$ 9.3309$ 9.2092$ 6.7878$ 5.8844$ 4.0198$ 1718 Total Usage Rate 0.0203$ 0.0222$ 0.0234$ 0.0180$ 0.0032$ 0.0030$ 1819 100% Load Factor Rate 0.3800$ 0.3290$ 0.3262$ 0.2412$ 0.1967$ 0.1352$ 19


El Paso Natural Gas Company, L.L.C.Escalation of Rates Per Tariff2017 FT1 Usage Base Rates

Description(a)





(b) (c) (d) (e) (f) (g)From Permian:



GDP-IPD Calculation7 O&M,OT - Year 2016 Portion of the Rate 2/ 0.0252$ 0.0265$ 0.0164$ 0.0113$ 0.0048$ 0.0016$ 78 Year 2016 Escalation 2/ 0.0004$ 0.0004$ 0.0003$ 0.0002$ 0.0001$ -$ 89 Year 2017 O&M, and Other Taxes 0.0256$ 0.0269$ 0.0167$ 0.0115$ 0.0049$ 0.0016$ 9






Description


(a)





(b) (c) (d) (e) (f) (g)From Anadarko:



GDP-IPD Calculation7 O&M,OT - Year 2016 Portion of the Rate 2/ 0.0281$ 0.0290$ 0.0219$ 0.0175$ 0.0052$ 0.0016$ 78 Year 2016 Escalation 2/ 0.0005$ 0.0005$ 0.0004$ 0.0003$ 0.0001$ -$ 89 Year 2017 O&M, and Other Taxes 0.0286$ 0.0295$ 0.0223$ 0.0178$ 0.0053$ 0.0016$ 9







Description(a)





(b) (c) (d) (e) (f) (g)From California:



GDP-IPD Calculation7 O&M,OT - Year 2016 Portion of the Rate 2/ 0.0097$ 0.0097$ 0.0097$ 0.0097$ 0.0097$ 0.0097$ 78 Year 2016 Escalation 2/ 0.0002$ 0.0002$ 0.0002$ 0.0002$ 0.0002$ 0.0002$ 89 Year 2017 O&M, and Other Taxes 0.0099$ 0.0099$ 0.0099$ 0.0099$ 0.0099$ 0.0099$ 9





3/ See Appendix D, Page 1 of 2.4/ If the GDP-IPD escalation calculation is not within the minimum (floor) and the maximum (ceiling) calculation

then the applicable minimum or maximum calculated escalation is selected.

Escalation of Rates Per TariffEl Paso Natural Gas Company, L.L.C.

2017 FT1 Usage Base Rates

Description(a)



Docket No. RP17-___Appendix BPage 6 of 6

Line Rate Less FT-1 Inflation FT-1 Line

No. Description Usage Usage Total 1/ Adjustment 2/ Usage Total No.

(a) (b) (c) (d) (e) (f) (g)

[ b + c] [ b * 1.01 ] [ e + f ]

Mainline Transmission Usage Rates:

From San Juan Basin to:

1 Anadarko 0.3190$ 0.0032$ 0.3222$ 0.3222$ 0.0032$ 0.3254$ 1

2 Permian 0.3190$ 0.0032$ 0.3222$ 0.3222$ 0.0032$ 0.3254$ 2

3 San Juan 0.3188$ 0.0030$ 0.3218$ 0.3220$ 0.0030$ 0.3250$ 3

4 Texas 0.3207$ 0.0032$ 0.3239$ 0.3239$ 0.0032$ 0.3271$ 4

5 New Mexico 0.3346$ 0.0178$ 0.3524$ 0.3379$ 0.0180$ 0.3559$ 5

6 Arizona 0.4951$ 0.0232$ 0.5183$ 0.5001$ 0.0234$ 0.5235$ 6

From Permian Basin to:

7 Anadarko 0.3222$ 0.0074$ 0.3296$ 0.3254$ 0.0075$ 0.3329$ 7

8 Permian 0.3188$ 0.0030$ 0.3218$ 0.3220$ 0.0030$ 0.3250$ 8

9 San Juan 0.3329$ 0.0183$ 0.3512$ 0.3362$ 0.0185$ 0.3547$ 9

10 Texas 0.3222$ 0.0074$ 0.3296$ 0.3254$ 0.0075$ 0.3329$ 10

11 New Mexico 0.3329$ 0.0183$ 0.3512$ 0.3362$ 0.0185$ 0.3547$ 11

12 Arizona 0.4954$ 0.0268$ 0.5222$ 0.5004$ 0.0271$ 0.5275$ 12

From Anadarko Basin to:

13 Anadarko 0.3188$ 0.0030$ 0.3218$ 0.3220$ 0.0030$ 0.3250$ 13

14 Permian 0.3232$ 0.0083$ 0.3315$ 0.3264$ 0.0084$ 0.3348$ 14

15 San Juan 0.3434$ 0.0286$ 0.3720$ 0.3468$ 0.0289$ 0.3757$ 15

16 Texas 0.3232$ 0.0083$ 0.3315$ 0.3264$ 0.0084$ 0.3348$ 16

17 New Mexico 0.3434$ 0.0286$ 0.3720$ 0.3468$ 0.0289$ 0.3757$ 17

18 Arizona 0.5042$ 0.0359$ 0.5401$ 0.5092$ 0.0363$ 0.5455$ 18

From California to:

19 Anadarko 0.3541$ 0.0159$ 0.3700$ 0.3576$ 0.0161$ 0.3737$ 19

20 Permian 0.3541$ 0.0159$ 0.3700$ 0.3576$ 0.0161$ 0.3737$ 20

21 San Juan 0.3541$ 0.0159$ 0.3700$ 0.3576$ 0.0161$ 0.3737$ 21

22 Texas 0.3541$ 0.0159$ 0.3700$ 0.3576$ 0.0161$ 0.3737$ 22

23 New Mexico 0.3541$ 0.0159$ 0.3700$ 0.3576$ 0.0161$ 0.3737$ 23

24 Arizona 0.3541$ 0.0159$ 0.3700$ 0.3576$ 0.0161$ 0.3737$ 24

1/ See 2016 Docket No. RP16-237, Tab B, Page 6, Column (g).

2/ FT-2 rates were escalated using the selected escalation for the FT-1 rates as shown in Appendix B, page 1 line 15. Because all of the zonal FT-1 rates are escalated at 1% (the minimum inflation percent), the FT-2 rates were also escalated by using the same 1% inflation factor.


2017 11.2 Rates Escalated Per Tariff(Excludes Surcharges)

2016 FT-2 RATES 2017 FT-2 RATES


Docket No. RP17-___

Appendix C

System Average Usage Rates

Docket No. RP17-___Appendix CPage 1 of 2

Rate Factor Total Rate Factor Total Rate Factor TotalSJ to PA $0.0030 39.675% $0.0012 SJ to A $0.3254 39.675% $0.1291 SJ to A $0.0032 39.675% $0.0013P to PA $0.0030 56.244% $0.0017 P to A $0.3329 56.244% $0.1872 P to A $0.0075 56.244% $0.0042A to PA $0.0030 4.051% $0.0001 A to A $0.3250 4.051% $0.0132 A to A $0.0030 4.051% $0.0001CA to PA $0.0161 0.031% $0.0000 CA to A $0.3737 0.031% $0.0001 CA to A $0.0161 0.031% $0.0000

$0.0030 $0.3296 $0.0056

SJ to TX $0.0032 39.675% $0.0013 SJ to P $0.3254 39.675% $0.1291 SJ to P $0.0032 39.675% $0.0013P to TX $0.0075 56.244% $0.0042 P to P $0.3250 56.244% $0.1828 P to P $0.0030 56.244% $0.0017A to TX $0.0084 4.051% $0.0003 A to P $0.3348 4.051% $0.0136 A to P $0.0084 4.051% $0.0003CA to TX $0.0161 0.031% $0.0000 CA to P $0.3737 0.031% $0.0001 CA to P $0.0161 0.031% $0.0000

$0.0058 $0.3256 $0.0033

SJ to NM $0.0180 39.675% $0.0071 SJ to SJ $0.3250 39.675% $0.1289 SJ to SJ $0.0030 39.675% $0.0012P to NM $0.0185 56.244% $0.0104 P to SJ $0.3547 56.244% $0.1995 P to SJ $0.0185 56.244% $0.0104A to NM $0.0289 4.051% $0.0012 A to SJ $0.3757 4.051% $0.0152 A to SJ $0.0289 4.051% $0.0012CA to NM $0.0161 0.031% $0.0000 CA to SJ $0.3737 0.031% $0.0001 CA to SJ $0.0161 0.031% $0.0000

$0.0187 $0.3437 $0.0128

SJ to AZ $0.0234 39.675% $0.0093 SJ to TX $0.3271 39.675% $0.1298 SJ to TX $0.0032 39.675% $0.0013P to AZ $0.0271 56.244% $0.0152 P to TX $0.3329 56.244% $0.1872 P to TX $0.0075 56.244% $0.0042A to AZ $0.0363 4.051% $0.0015 A to TX $0.3348 4.051% $0.0136 A to TX $0.0084 4.051% $0.0003CA to AZ $0.0161 0.031% $0.0000 CA to TX $0.3737 0.031% $0.0001 CA to TX $0.0161 0.031% $0.0000

$0.0260 $0.3307 $0.0058

SJ to NV $0.0222 39.675% $0.0088 SJ to NM $0.3559 39.675% $0.1412 SJ to NM $0.0180 39.675% $0.0071P to NV $0.0435 56.244% $0.0245 P to NM $0.3547 56.244% $0.1995 P to NM $0.0185 56.244% $0.0104A to NV $0.0479 4.051% $0.0019 A to NM $0.3757 4.051% $0.0152 A to NM $0.0289 4.051% $0.0012CA to NV $0.0161 0.031% $0.0000 CA to NM $0.3737 0.031% $0.0001 CA to NM $0.0161 0.031% $0.0000

$0.0352 $0.3560 $0.0187

SJ to CA $0.0203 39.675% $0.0081 SJ to AZ $0.5235 39.675% $0.2077 SJ to AZ $0.0234 39.675% $0.0093P to CA $0.0415 56.244% $0.0233 P to AZ $0.5275 56.244% $0.2967 P to AZ $0.0271 56.244% $0.0152A to CA $0.0465 4.051% $0.0019 A to AZ $0.5455 4.051% $0.0221 A to AZ $0.0363 4.051% $0.0015CA to CA $0.0161 0.031% $0.0000 CA to AZ $0.3737 0.031% $0.0001 CA to AZ $0.0161 0.031% $0.0000

$0.0333 $0.5266 $0.0260

El Paso Natural Gas Company, L.L.C.Calculation of

2017 System Average Usage Rates

Maximum Article 11.2(a) 2017 FT-1 Usage Rates

Maximum Article 11.2(a) 2017 FT-2 Usage Rates

Minimum Article 11.2(a) 2017 FT-2 Usage Rates

Docket No. RP17-___Appendix CPage 2 of 2

Oct-15 to Sep-16Receipt Area Volume (Mmbtu) PercentSan Juan S 581,757,069 39.675%Permian P 824,717,108 56.244%Anadarko A 59,396,774 4.051%California CA 453,892 0.031%Total from Basins 1,466,324,843 100.00%

See Section 37.3(c) of the GT&C of EPNG's tariff for a description of the calculation requirements.

El Paso Natural Gas Company, L.L.C.Calculation of Percentage Weighting for

2017 System Average Usage Rates

Percents from Each Receipt Area


Docket No. RP17-___

Appendix D

Derivation of Escalator

Docket No. RP17-___Appendix DPage 1 of 2

Line 2nd Qtr 2nd Qtr PercentageNo. Description 2015 2016 Increase/(Decrease)

(a) (b) (c) (d)[( c - b ) / b ]

1 Implicit Price Deflator 109.919 111.258 1.2182%234567 Minimum Inflation Percent 1.0%8 Maximum Inflation Percent 4.5%9

10 2015-2016 GDP-IPD Escalation Factor 1.2182%11 Applicable Percent of GDP-IPD 93.0%12 Adjusted Inflation Percent 1.1329%

El Paso Natural Gas Company, L.L.C.Derivation of Escalator

GDP-IPD

Docket No. RP17-__Appendix DPage 2 of 2

Line I II III IV I II III IV I II

1 Gross domestic product 108.117 108.709 109.165 109.3 109.31 109.919 110.253 110.504 110.63 111.2582 Personal consumption expenditures 108.618 109.13 109.421 109.419 108.976 109.47 109.782 109.89 109.967 110.5173 Goods 106.052 106.117 105.852 104.91 102.731 103.045 102.807 102.144 101.11 101.3024 Durable goods 93.213 92.769 92.22 91.51 90.988 90.837 90.236 89.818 89.624 89.0495 Nondurable goods 112.639 113.002 112.908 111.839 108.683 109.276 109.264 108.459 106.916 107.5816 Services 109.963 110.709 111.296 111.791 112.27 112.859 113.465 113.987 114.66 115.4027 Gross private domestic investment 104.819 105.303 105.889 106.312 106.427 106.352 106.589 106.786 106.873 107.3158 Fixed investment 105.312 105.691 106.316 106.769 106.912 106.846 107.184 107.3 107.467 108.0489 Nonresidential 103.915 104.298 104.613 104.849 105.012 104.932 105.141 105.117 105.173 105.47710 Structures 110.934 111.861 112.744 113.292 112.622 111.905 112.165 112.108 111.678 112.56211 Equipment 100.032 100.398 100.599 100.881 101.255 101.265 101.286 101.301 101.367 101.39312 Intellectual property products 104.726 104.743 104.835 104.779 105.199 105.414 105.885 105.821 106.163 106.52213 Residential 111.183 111.543 113.484 114.844 114.895 114.878 115.709 116.355 116.936 118.53714 Change in private inventories --- --- --- --- --- --- --- --- --- ---15 Net exports of goods and services --- --- --- --- --- --- --- --- --- ---16 Exports 112.777 112.767 112.493 110.535 107.886 107.635 106.541 105.031 103.661 104.66317 Goods 113.108 112.785 112.091 109.313 105.848 105.371 103.808 101.725 99.07 100.49818 Services 112.107 112.759 113.389 113.209 112.286 112.5 112.395 112.086 113.411 113.51519 Imports 114.534 114.084 113.481 111.446 106.84 105.528 104.309 102.255 100.678 101.21520 Goods 116.097 115.475 114.69 112.307 106.928 105.297 103.944 101.525 99.614 100.23421 Services 107.755 108.095 108.332 107.888 106.875 107.064 106.469 106.115 106.09 106.24322 Government consumption expenditures 110.597 111.114 111.666 111.67 111.083 111.68 111.815 111.833 111.711 112.46123 Federal 108.893 109.321 109.725 109.788 109.845 110.093 110.097 109.882 110.286 110.8724 National defense 108.314 108.62 108.941 108.927 108.853 109.063 109.01 108.766 109.015 109.58625 Nondefense 109.884 110.507 111.044 111.228 111.489 111.799 111.889 111.719 112.358 112.96326 State and local 111.771 112.346 112.996 112.962 111.966 112.783 113 113.165 112.712 113.566 Addendum:27 Gross national product 108.241 108.83 109.283 109.414 109.405 110.011 110.344 110.593 110.714 111.34

Table 1.1.9. Implicit Price Deflators for Gross Domestic Product[Index numbers, 2009=100] Seasonally adjustedBureau of Economic AnalysisLast Revised on: October 28, 2016 - Next Release Date November 29, 2016

2014 2015 2016

El Paso Natural Gas Company, L.L.C. Part IV: GT&C

FERC Gas Tariff Section 37 - Article 11.2 Provisions

Third Revised Volume No. 1A Version 13.0.0

Issued on: November 30, 2016 Effective on: January 1, 2017

37. ARTICLE 11.2 PROVISIONS

Pursuant to the Commission's Order issued on March 20, 2006 in Docket No. RP05-422-

000, this Section 37 is applicable to firm Rate Schedule FT-1 and FT-2 transportation service

provided under applicable TSAs ("Section 37 TSAs") to the contracted Shippers that are parties to

the Stipulation and Agreement in Docket No. RP95-363-000, et al. ("1996 Settlement").

37.1 Article 11.2(a) Rates - Article 11.2(a) Rates shall be used for purposes of invoicing

transportation charges and reservation charge crediting. The System Average Usage Rate

shall be used for purposes of invoicing usage, such as imbalance payback, that cannot be

identified by receipt basin and is identified by Transporter as a system receipt. These rates

shall be adjusted annually pursuant to Section 37.3 for Section 37 TSAs.

Rate Schedule FT-1

RESERVATION MONTHLY DAILY

-------------- ----------

Production Area $ 4.0198 $ 0.1322

Texas $ 5.8844 $ 0.1935

New Mexico $ 6.7878 $ 0.2232

Arizona $ 9.2092 $ 0.3028

Nevada $ 9.3309 $ 0.3068

California $ 10.9418 $ 0.3597

DAILY USAGE From From From From System

Maximum San Juan Permian Anadarko California Average

---------- ---------- ----------- ------------ -----------

Production Area $ 0.0030 $ 0.0030 $ 0.0030 $ 0.0161 $ 0.0030

Texas $ 0.0032 $ 0.0075 $ 0.0084 $ 0.0161 $ 0.0058

New Mexico $ 0.0180 $ 0.0185 $ 0.0289 $ 0.0161 $ 0.0187

Arizona $ 0.0234 $ 0.0271 $ 0.0363 $ 0.0161 $ 0.0260

Nevada $ 0.0222 $ 0.0435 $ 0.0479 $ 0.0161 $ 0.0352

California $ 0.0203 $ 0.0415 $ 0.0465 $ 0.0161 $ 0.0333


Minimum San Juan Permian Anadarko California Average

---------- ---------- ----------- ------------ -----------

Production Area $ 0.0030 $ 0.0030 $ 0.0030 $ 0.0161 $ 0.0030

Texas $ 0.0032 $ 0.0075 $ 0.0084 $ 0.0161 $ 0.0058

New Mexico $ 0.0180 $ 0.0185 $ 0.0289 $ 0.0161 $ 0.0187

Arizona $ 0.0234 $ 0.0271 $ 0.0363 $ 0.0161 $ 0.0260

Nevada $ 0.0222 $ 0.0435 $ 0.0479 $ 0.0161 $ 0.0352

California $ 0.0203 $ 0.0415 $ 0.0465 $ 0.0161 $ 0.0333





37.1 Article 11.2(a) Rates (continued)

Rate Schedule FT-2



---------- ---------- ----------- ------------ -----------

Anadarko $ 0.3254 $ 0.3329 $ 0.3250 $ 0.3737 $ 0.3296

Permian $ 0.3254 $ 0.3250 $ 0.3348 $ 0.3737 $ 0.3256

San Juan $ 0.3250 $ 0.3547 $ 0.3757 $ 0.3737 $ 0.3437

Texas $ 0.3271 $ 0.3329 $ 0.3348 $ 0.3737 $ 0.3307

New Mexico $ 0.3559 $ 0.3547 $ 0.3757 $ 0.3737 $ 0.3560

Arizona $ 0.5235 $ 0.5275 $ 0.5455 $ 0.3737 $ 0.5266



---------- ---------- ----------- ------------ -----------

Anadarko $ 0.0032 $ 0.0075 $ 0.0030 $ 0.0161 $ 0.0056

Permian $ 0.0032 $ 0.0030 $ 0.0084 $ 0.0161 $ 0.0033

San Juan $ 0.0030 $ 0.0185 $ 0.0289 $ 0.0161 $ 0.0128

Texas $ 0.0032 $ 0.0075 $ 0.0084 $ 0.0161 $ 0.0058

New Mexico $ 0.0180 $ 0.0185 $ 0.0289 $ 0.0161 $ 0.0187

Arizona $ 0.0234 $ 0.0271 $ 0.0363 $ 0.0161 $ 0.0260

37.2 Rights and Conditions

(a) When Section 37 TSAs expire or are terminated by the shipper, the rights listed in

this Section 37 shall no longer apply to such TSAs.

(b) In the event a Section 37 TSA uses service or re-designates service to an alternate

receipt or delivery point in the same zone as the primary receipt or delivery point(s)

under that TSA, the service shall be invoiced at the Article 11.2(a) Rate. Should

service be provided to or re-designated to an alternate receipt or delivery point other

than the primary receipt or delivery point(s) under that TSA, the service shall be

invoiced under the Out-of-Zone-Charge provisions contained in Sections 8.1(e),

8.1(f) and 8.1(g). However, the Article 11.2(a) reservation rates for the applicable

zone shall be used in lieu of the maximum non-Article 11.2 tariff rates.

(c) Capacity released from a Section 37 TSA may be released at a reservation rate no

higher than the applicable Article 11.2(a) rate. Such released capacity will be billed

at the applicable Article 11.2(a) usage rate.

(d) If the Shippers applicable to this Section 37 acquire any permanent or temporary

capacity releases, they will pay the reservation rate specified in the posted award of

the capacity release for that capacity, rather than the Article 11.2(a) rate.





37.2 Rights and Conditions (continued)

(e) For purposes of determining scheduling priority, pursuant to Section 6.2(a)(iii) of

the GT&C, the Article 11.2(a) reservation rates will be considered equivalent to the

maximum tariff rate.

(f) Article 11.2(a) rates shall not apply to any other firm transportation service under

any rate schedule.

(g) Should a Section 37 TSA be subject to an Article 11.2(a) rate that exceeds the

maximum non-Article 11.2 tariff rate for such service, this service shall be billed at

the applicable maximum non-Article 11.2 tariff rate.

37.3 The applicable Article 11.2(a) rates shall be subject to inflation escalation and will be

adjusted according to the following provisions.

(a) Annual Inflation Adjustment - Effective January 1, 1998, and on each anniversary

date thereafter, Transporter shall increase the Operations and Maintenance (O&M)

and Other Taxes portion of the reservation and usage charges for Rate Schedule FT-

1 and the rates for Rate Schedule FT-2 in effect for the preceding Year by 93% of

the increase in the Implicit Price Deflator ("IPD") to the Gross Domestic Product

("GDP") as published by the Department of Commerce's Bureau of Economic

Analysis ("BEA"), or a mutually agreed similar indicator should the GDP no longer

be available on a continuing basis, or, failing such agreement, a similar indicator as

approved by the Commission. Notwithstanding the above calculation, the annual

increase in total rates will not be less than 1% or more than 4-1/2% of the prior

Year's total rates. The resulting rates shall become the rates for purposes of

applying the annual inflation adjustment for the succeeding Year.

(b) For the annual inflation adjustment to be effective January 1, 1998, the most recently

published final IPD prior to the inflation adjustment filing will be compared to the

IPD reported by the BEA for the same period of the prior Year to determine the

annual change. For each rate change subject to this provision, the most recently


prior Year's IPD to determine the annual change. If the BEA modifies the

benchmark index for the IPD, then Transporter will use the restated IPD reported by

the BEA instead of the IPD used by Transporter in its last inflation adjustment filing.

(c) The Article 11.2(a) System Average Usage Rate shall be applied to those receipts

that are not defined by receipt basin, but rather as a system receipt. Such usage rates

are weighted average rates, as shown in Section 37.1 of the GT&C, derived through

the following process.





37.3 (c) (continued)

(i) Transporter’s actual system throughput data (by basin) for the 12-Month

period ending September 30th

of each Year is collected and the relative

percentage contribution of each basin in comparison to the total system is

determined.

(ii) Pursuant to Section 37.3(c)(i), the basin percentages, or factors, are

multiplied by the specific receipt basin rates within each delivery zone to

derive an Article 11.2(a) weighted rate.

(iii) The weighted Article 11.2(a) rates, as calculated by Section 37.3(c)(ii), shall

be summed together to arrive at the Article 11.2(a) System Average Usage

Rate for each delivery zone.





37. ARTICLE 11.2 PROVISIONS

Pursuant to the Commission's Order issued on March 20, 2006 in Docket No. RP05-422-

000, this Section 37 is applicable to firm Rate Schedule FT-1 and FT-2 transportation service

provided under applicable TSAs ("Section 37 TSAs") to the contracted Shippers that are parties to

the Stipulation and Agreement in Docket No. RP95-363-000, et al. ("1996 Settlement").

37.1 Article 11.2(a) Rates - Article 11.2(a) Rates shall be used for purposes of invoicing

transportation charges and reservation charge crediting. The System Average Usage Rate

shall be used for purposes of invoicing usage, such as imbalance payback, that cannot be

identified by receipt basin and is identified by Transporter as a system receipt. These rates

shall be adjusted annually pursuant to Section 37.3 for Section 37 TSAs.

Rate Schedule FT-1

RESERVATION MONTHLY DAILY

-------------- ----------

Production Area $ 4.01983.9800 $ 0.132208

Texas $ 5.88448261 $ 0.19315

New Mexico $ 6.78787206 $ 0.223210

Arizona $ 9.20921180 $ 0.30282998

Nevada $ 9.33092385 $ 0.306837

California $ 10.94188335 $ 0.359762



---------- ---------- ----------- ------------ -----------

Production Area $ 0.0030 $ 0.0030 $ 0.0030 $ 0.016159 $ 0.0030

Texas $ 0.0032 $ 0.00754 $ 0.00843 $ 0.016159 $ 0.0058

New Mexico $ 0.018078 $ 0.01853 $ 0.02896 $ 0.016159 $ 0.01875

Arizona $ 0.02342 $ 0.027168 $ 0.036359 $ 0.016159 $ 0.026056

Nevada $ 0.02220 $ 0.04351 $ 0.04794 $ 0.016159 $ 0.035244

California $ 0.02031 $ 0.04151 $ 0.04650 $ 0.016159 $ 0.033325



---------- ---------- ----------- ------------ -----------

Production Area $ 0.0030 $ 0.0030 $ 0.0030 $ 0.016159 $ 0.0030

Texas $ 0.0032 $ 0.00754 $ 0.00843 $ 0.016159 $ 0.0058

New Mexico $ 0.018078 $ 0.01853 $ 0.02896 $ 0.016159 $ 0.01875

Arizona $ 0.02342 $ 0.027168 $ 0.036359 $ 0.016159 $ 0.026056

Nevada $ 0.02220 $ 0.04351 $ 0.04794 $ 0.016159 $ 0.035244

California $ 0.02031 $ 0.04151 $ 0.04650 $ 0.016159 $ 0.033325





37.1 Article 11.2(a) Rates (continued)

Rate Schedule FT-2



---------- ---------- ----------- ------------ -----------

Anadarko $ 0.325422 $ 0.3329296 $ 0.325018 $ 0.373700 $ 0.329661

Permian $ 0.325422 $ 0.325018 $ 0.334815 $ 0.373700 $ 0.325623

San Juan $ 0.325018 $ 0.354712 $ 0.375720 $ 0.373700 $ 0.3437396

Texas $ 0.327139 $ 0.3329296 $ 0.334815 $ 0.373700 $ 0.3307272

New Mexico $ 0.355924 $ 0.354712 $ 0.375720 $ 0.373700 $ 0.356025

Arizona $ 0.5235183 $ 0.527522 $ 0.545501 $ 0.373700 $ 0.526613



---------- ---------- ----------- ------------ -----------

Anadarko $ 0.0032 $ 0.00754 $ 0.0030 $ 0.016159 $ 0.00565

Permian $ 0.0032 $ 0.0030 $ 0.00843 $ 0.016159 $ 0.00334

San Juan $ 0.0030 $ 0.01853 $ 0.02896 $ 0.016159 $ 0.01283

Texas $ 0.0032 $ 0.00754 $ 0.00843 $ 0.016159 $ 0.0058

New Mexico $ 0.018078 $ 0.01853 $ 0.02896 $ 0.016159 $ 0.01875

Arizona $ 0.02342 $ 0.027168 $ 0.036359 $ 0.016159 $ 0.026056

37.2 Rights and Conditions

(a) When Section 37 TSAs expire or are terminated by the shipper, the rights listed in

this Section 37 shall no longer apply to such TSAs.

(b) In the event a Section 37 TSA uses service or re-designates service to an alternate

receipt or delivery point in the same zone as the primary receipt or delivery point(s)

under that TSA, the service shall be invoiced at the Article 11.2(a) Rate. Should

service be provided to or re-designated to an alternate receipt or delivery point other

than the primary receipt or delivery point(s) under that TSA, the service shall be

invoiced under the Out-of-Zone-Charge provisions contained in Sections 8.1(e),

8.1(f) and 8.1(g). However, the Article 11.2(a) reservation rates for the applicable

zone shall be used in lieu of the maximum non-Article 11.2 tariff rates.

(c) Capacity released from a Section 37 TSA may be released at a reservation rate no

higher than the applicable Article 11.2(a) rate. Such released capacity will be billed

at the applicable Article 11.2(a) usage rate.

(d) If the Shippers applicable to this Section 37 acquire any permanent or temporary

capacity releases, they will pay the reservation rate specified in the posted award of

the capacity release for that capacity, rather than the Article 11.2(a) rate.





37.2 Rights and Conditions (continued)

(e) For purposes of determining scheduling priority, pursuant to Section 6.2(a)(iii) of

the GT&C, the Article 11.2(a) reservation rates will be considered equivalent to the

maximum tariff rate.

(f) Article 11.2(a) rates shall not apply to any other firm transportation service under

any rate schedule.

(g) Should a Section 37 TSA be subject to an Article 11.2(a) rate that exceeds the

maximum non-Article 11.2 tariff rate for such service, this service shall be billed at

the applicable maximum non-Article 11.2 tariff rate.

37.3 The applicable Article 11.2(a) rates shall be subject to inflation escalation and will be

adjusted according to the following provisions.

(a) Annual Inflation Adjustment - Effective January 1, 1998, and on each anniversary

date thereafter, Transporter shall increase the Operations and Maintenance (O&M)

and Other Taxes portion of the reservation and usage charges for Rate Schedule FT-

1 and the rates for Rate Schedule FT-2 in effect for the preceding Year by 93% of

the increase in the Implicit Price Deflator ("IPD") to the Gross Domestic Product

("GDP") as published by the Department of Commerce's Bureau of Economic

Analysis ("BEA"), or a mutually agreed similar indicator should the GDP no longer

be available on a continuing basis, or, failing such agreement, a similar indicator as

approved by the Commission. Notwithstanding the above calculation, the annual

increase in total rates will not be less than 1% or more than 4-1/2% of the prior

Year's total rates. The resulting rates shall become the rates for purposes of

applying the annual inflation adjustment for the succeeding Year.

(b) For the annual inflation adjustment to be effective January 1, 1998, the most recently


IPD reported by the BEA for the same period of the prior Year to determine the

annual change. For each rate change subject to this provision, the most recently


prior Year's IPD to determine the annual change. If the BEA modifies the

benchmark index for the IPD, then Transporter will use the restated IPD reported by

the BEA instead of the IPD used by Transporter in its last inflation adjustment filing.

(c) The Article 11.2(a) System Average Usage Rate shall be applied to those receipts

that are not defined by receipt basin, but rather as a system receipt. Such usage rates

are weighted average rates, as shown in Section 37.1 of the GT&C, derived through

the following process.





37.3 (c) (continued)

(i) Transporter’s actual system throughput data (by basin) for the 12-Month

period ending September 30th

of each Year is collected and the relative

percentage contribution of each basin in comparison to the total system is

determined.

(ii) Pursuant to Section 37.3(c)(i), the basin percentages, or factors, are

multiplied by the specific receipt basin rates within each delivery zone to

derive an Article 11.2(a) weighted rate.

(iii) The weighted Article 11.2(a) rates, as calculated by Section 37.3(c)(ii), shall

be summed together to arrive at the Article 11.2(a) System Average Usage

Rate for each delivery zone.