RE:RE:RE:TRP increased toll to Dawn when NG price spikedI was in a hurry composing my previous post and omitted a key point. When there are outsized gains/profits to be realized in an arbitrage(ie..AB to Dawn), shippers nominate volume far in excess of capacity. The cost of transportation then functions as an allocation mechanism.
For example:
Point A: Market Price $2.00
Point B: Market Price $5.00
Tariff A to B: $1.00
In the above scenario, the pipeline would receive nominations(to ship) for multiples of line capacity at the origin point(point A) since the profit to be made on the arb is EXTREMELY HIGH. This type of situation would not occur if limitations on transportation did not exist or demand at the destination was not abnormally high. So what TransCanada is doing is kicking out interruptible customers(normal practice in all gas P/Ls) thereby profiting and protecting their dedicated shippers.