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Gas Distributors Protest Tennessee's 300 Line Looping Project in Pennsylvania

More than two dozen gas distribution systems, let by the Municipal Gas Authority of Mississippi (MGAM), have filed a protest urging FERC to require Tennessee Gas Pipeline Co. (TGP) to justify its proposal to charge system fuel and electric compression rates as part of a proposed looping project on TGP's 300 Line.

TGP filed at the Federal Energy Regulatory Commission (FERC) last month for the project, which would serve growing demand in the Middle Atlantic and New England regions with additional service from Susquehanna County, PA, to Pike County, PA (see Daily GPIOct. 9). Customers that have signed up for all of the 135,000 Dth/d of incremental capacity on the Orion Project are South Jersey Resources Group LLC, South Jersey Gas Co., and Cabot Oil & Gas Corp., according to the Kinder Morgan Inc. pipeline's filing at the FERC [CP16-4].

But the Tennessee Customer Group (TCG) says that TGP proposes to charge system fuel and electric compression costs for proposed firm service, "yet does not attempt to demonstrate that the use of such system rates would not require subsidization by system operators -- i.e., would not result in a situation where Tennessee collects fewer revenues for fuel and electric compression than the costs Tennessee would incur. The sole justification for its proposal to charge system rates for fuel and electric compression costs is that the proposal is appropriate 'given that the Project scope entails no compression facilities...'"

FERC should direct TGP to keep separate books and accounting of costs attributable to the proposed project, as it did for another TGP project recently, the group said in its filing.

TCG is comprised of MGAM -- a joint action agency comprised in part of firm transportation and storage customers of TGP -- and a lengthy list of distribution customers, all of them firm transportation and/or storage customers of TGP, including Centerpoint Energy Resources Corp., Delta Natural Gas Company, Inc., Savannah Utilities and West Tennessee Public Utility District.

Orion is composed of three components: construction of a 36-inch, 8.23-mile pipeline loop along the 300 Line in Wayne and Pike counties, PA (Loop 322); construction of a 36-inch diameter, 4.68-mile loop along the 300 Line in Pike County (Loop 323); and installation of appurtenant and auxiliary facilities.

Tennessee asked for authorization by Nov. 1, 2016 to allow for construction to start during the first quarter of 2017 and a June 1, 2018 in-service date as requested by the project shippers. The projected project cost is $143 million.

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