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The PALS SRO Program gives shippers a way to balance pool quantities by minimizing or eliminating daily unexpected losses of supplies or markets. Shippers can park gas or loan gas at either the Zone 1 Pool (PIN 44603) or the Zone 2 Pool (PIN 44604) ("SRO Pooling Points"). No other locations on MEP’s system are available for PALS service under the SRO Program. Shippers may have up to two (2) PALS/SRO contracts with MEP - a Park contract and/or a Loan contract at one of the SRO Pooling Points, as elected by shipper. PALS/SRO contracts at both SRO Pooling Points are not permitted.

Shippers are charged a Daily Usage fee (per Dth parked or loaned) on the balance carried on each contract. Each contract is allowed a maximum cumulative balance of up to 2,500 Dth. When operationally available, shippers may nominate a Park, Loan, Park Payback or Loan Payback quantity of up to 2,500 Dth/day. Any quantity exceeding the 2,500 Dth daily nomination limit or balance limit will incur Overrun charges.

The rates for PALS service under this program can be accessed by clicking on the PALS/SRO Program Rates selection in the menu on the left. The daily availability of this service is posted under the Current Pipeline Conditions notice posted each business day in the Informational Postings/Notices section of this website.

It is important to note that balances that occur on SRO Park and SRO Loan contracts do not offset each other. Each balance must be reduced or eliminated with SRO Payback nominations for the specific contract balances. SRO Park balances may not be negative and SRO Loan balances may not be positive.

MEP encourages shippers to use their PALS/SRO contracts as "placeholders" at one of the SRO Pooling Points in order to minimize the impact of supply or market cuts within a nomination cycle.

In order to accomplish this, a shipper nominates its SRO Loan contract and SRO Park contract on the same day at the same SRO Pooling Point with offsetting quantities, which includes a nomination ranking indicating both contracts as the lowest priority transactions. As MEP confirms quantities at the SRO Pooling Points, the SRO Loan and Park contracts are adjusted as needed to an amount that balances the shipper's upstream and/or downstream activity at the point.

As an example, if a shipper nominates a Park of 1,250 Dth on its SRO Park contract and a Loan of 1,250 Dth on its SRO Loan contract, and subsequently the shipper's market (downstream) activity was cut by 500 Dth, then initially the Loan would be reduced from 1,250 Dth to 750 Dth and the Park would remain at 1,250 Dth. This would automatically balance the shipper's activity at the point and avoid the need to cut other physical supply upstream to match the downstream market cut.

MEP has a procedure in DART that "nets" the resulting SRO placeholder contracts at the end of the ID2 Cycle. The SRO Park and Loan contract are automatically adjusted by DART in such a way that balances the shipper's point activity after confirmations have occurred for the ID2 Cycle. In the example above, the resulting transactions after the ID2 netting process, is a confirmed Park of 500 Dth and a confirmed Loan of zero.

It is important to note that shippers are not charged for nominations on SRO contracts; shippers are only charged for the final confirmed quantities on each SRO contract after the ID2 cycle when quantities are netted together. If all of a shipper's activity gets confirmed as nominated, i.e., no cuts in supplies or markets, then the SRO Park and Loan quantities for that day would be reduced to zero and there is no charge for the shipper.

Shippers interested in entering into contracts under the PALS/SRO Program should contact their Account Director.