A pipeline’s capacity volume is set based on its maximum flow potential over a 24-hour period. As the gas day passes, if the pipeline is not running full, some unused capacity is lost since it is not possible to flow the full 24 hours’ worth of capacity in the remaining hours of the day. This means late-day (ID1 and ID2) cycles may have diminished capacity, ultimately meaning you may not be able to nominate as much gas during late-day cycles. We call this Diminished Unused Capacity, or DUC.
To demonstrate how DUC works, let’s say that there is 2,400 MMcf max capacity. If we divide capacity by a 24-hour day, we get a rate of 100 MMcf/hour (2,400 MMcf ÷ 24 hours = 100 MMcf/hour). Now, let’s assume that only 1,920 MMcf is actually scheduled during Evening cycle.
If we divide that volume by 24 hours we get an actual scheduled rate of 80 MMcf/hour (1,920 MMcf ÷ 24 hours = 80 MMcf/hour). So, of the 100 MMcf /hour the pipeline is capable of moving, only 80 MMcf /hour was actually used, meaning 20 MMcf/hour of that capacity went unused.
It is assumed that between Evening and ID1 cycles, 8 hours-worth of gas has flowed. Therefore, if 20 MMcf/hour of capacity went unused over an 8-hour period, a total of 160 MMcf of capacity is forever lost for that gas day (20 MMcf/hour x 8 hours = 160 MMcf). With 160 MMcf of the original 2,400 MMcf lost, the diminished capacity of the pipeline is really 2,240 MMcf as of ID1.
DUC affects late cycle nominations. Whenever possible, try and nominate earlier in the day to help reduce the risk of running into DUC reductions.