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Millennium's Valley Lateral Gets FERC OK

Over the objections of some area landowners FERC has approved Millennium Pipeline Co. LLC's Valley Lateral project, a 7.8-mile pipeline in Orange County, NY, that will serve a natural gas-fueled power plant currently under construction in Wawayanda, NY, known as the Valley Energy Center.

Last May Federal Energy Regulatory Commission staff prepared a favorable environmental assessment for the project [CP16-17] (see Daily GPIMay 9). Valley Lateral will run from Millennium's existing mainline to CPV Valley LLC's Valley Energy Center in Orange County. The project is to provide transportation capacity for about 130 MMcf/d to serve the 650 MW gas-fueled facility.

Two landowners and two area residents intervened in the proceeding and objected to the project. The landowners sought dismissal of the Millennium application at FERC, asserting that the project is an intrastate transmission project and not subject to FERC jurisdiction but rather falls under the authority of the New York Public Service Commission.

FERC said, however, that landowners "Burns and King are correct that, at least initially, Millennium's Valley Lateral will not be transporting any gas for the 'wholesale market,' as it will be delivering gas only to the power plant operated by Valley Energy Center, an end-user, which will use the gas as fuel to generate electricity. However, they are incorrect that Millennium's Valley Lateral therefore will not be transporting gas in interstate commerce as contemplated by section 1(b) of the NGA [Natural Gas Act].

"Although all of Millennium's existing facilities are located in New York, the gas transported on those facilities and to be transported on the Valley Lateral will be received from Millennium's mainline, which receives gas from upstream interconnections with, among others, the interstate pipeline systems operated by National Fuel and Tennessee Gas Pipeline Co. (Tennessee Gas), which receive gas at points outside New York. Further, once gas has moved beyond the gathering stage into interstate transmission facilities, section 1(b) of the NGA only operates to prevent the Commission's jurisdiction over the transportation of gas by pipeline in interstate commerce from attaching to transportation as part of qualifying local distribution services.

"In interpreting the NGA and its legislative history, the courts have consistently held that an interstate pipeline’s transportation of natural gas to end-users is not local distribution, and that the Commission therefore has jurisdiction to grant certificates authorizing interstate pipelines' construction of facilities to deliver gas directly to end-users."

There also were objections to the project on environmental grounds, including greenhouse gas emissions. However, the Commission ruled in favor of the project, specifying that proposed and recommended environmental mitigation measures be followed.

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