Southern Natural Gas Company; Notice of Proposed Changes to FERC Gas Tariff

Take notice that on August 31, 2000, Southern Natural Gas Company (Southern) tendered for filing as part of its FERC Gas Tariff, Seventh Revised Volume No. 1, the following revised tariff sheets to become effective October 1, 2000:

Fourth Revised Sheet No. 101

Original Sheet No. 101A

Original Sheet No. 101B

First Revised Sheet No. 102

Original Sheet No. 102A

Second Revised Sheet No. 104

Third Revised Sheet No. 116

Fourth Revised Sheet No. 117

Southern states that the tariff sheets filed by Southern set forth the terms and conditions under which Southern proposes to implement a new method of awarding firm capacity on its system. Southern proposes to replace its first-come, first-served method with a net present value method (NPV). The NPV method will be based on objective criteria which Southern will be required to post.

Southern requests evaluated at the same time must be evaluated under the same criteria.

Southern states that it may have an open season or it may award requests as they are submitted or, if they are pending, it may use the NPV method to evaluate pending requests if capacity becomes available. Such tariff provisions shall apply to capacity that is or becomes available—not to expansion capacity. Southern may, however, reserve capacity that becomes available or is going to become available for an open season relating to an expansion.

If Southern reserves such capacity, it will pose such reservation on its website and it will not award that capacity unless it rescinds its reservation on the website. Such open season will be held the later of one year from the date of the reservation or one year from the date the capacity becomes available. In the event Southern holds an open season for the capacity, it may set a reserve price for the capacity. If it does not post the reserve price it must establish with a reputable third party that it set the reserve price prior to the open season unless it blinds the identity of the bids by having bidders submit the bids to the third party. If the identity of the bidders is unknown to Southern, then Southern may establish the reserve price after it views the bid prices.

Southern will continue to award Receipt Point changes on a first-come, first-served basis, but delivery point changes will be awarded in conjunction with the new NPV methodology. Both delivery point changes and receipt point changes will be designated a NPV of zero, unless other consideration is given.

In addition, as part of the net present value procedures, Southern is changing the timeframe in which executed contracts must be returned to Southern from thirty (30) days to five (5) days.

Southern has requested to place the new capacity award methodology into effect October 1, 2000.

Any person desiring to be heard or to protest said filing should file a motion to intervene or a protest with the Federal Energy Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426, in accordance with Sections 385.214 or 385.211 of the Commission's Rules and Regulations. All such motions or protests must be filed in accordance with Section 154.210 of the Commission's Regulations. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceedings. Any person wishing to become a party must file a motion to intervene. Copies of this filing are on file with the Commission and are available for public inspection in the Public Reference Room. This filing may be viewed on the web at http://www.ferc.fed.us/online/ rims.htm (call 202-208-2222 for assistance).