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FERC Upholds Jurisdictional Transmission Determinations for Transco, Jupiter

FERC last Tuesday affirmed an April ruling that found part of Transcontinental Gas Pipe Line's offshore and onshore facilities in Louisiana to be regulated transmission and ineligible to be spun down to affiliate Williams Gas Processing-Gulf Coast Co. (WGP). The agency, in a separate order, also upheld an initial finding of jurisdictional transmission for the facilities of Jupiter Energy Corp.

In the April order, the Federal Energy Regulatory Commission reversed a 2001 decision that originally classified the Transco Louisiana pipeline facilities as unregulated gathering (see NGI, April 25).

The Commission a year ago ordered Transco and WGP to show cause why it should not reverse the 2001 ruling. FERC at the time said its initial decision in Transco, which was upheld by a federal appeals court, had been called into question by a subsequent decision in which the agency held that an offshore system owned and operated by Jupiter Energy provided transmission service that was subject to agency jurisdiction.

In a November 2003 order on rehearing of the Jupiter ruling, which was sought jointly by Jupiter, Williams and Transco, FERC said it learned for the first time that Jupiter's system was situated upstream of the Transco pipeline facilities that were previously ruled to be nonjurisdictional gathering. The trio argued at the time that Jupiter's upstream facilities should be declared exempt gathering since Transco's downstream pipe facilities were determined by the agency to be gathering.

But FERC in the rehearing order said the opposite was the case. Based on the developments in the Jupiter case, the Commission said it appeared that its previous gathering determination for Transco's downstream facilities was made on the basis of incomplete information.

"We affirm our [April] finding that the primary function of the Transco facilities located downstream of Jupiter's system is jurisdictional transmission," FERC said in the order issued last Tuesday [CP01-368, CP01-369].

Acting on remand from the U.S. Court of Appeals for the Fifth Circuit, the Commission in a separate order last Tuesday also affirmed its original determination of jurisdictional transmission for Jupiter's facilities, which extend from offshore Texas to a sub-sea interconnect with Transco and a shoreline interconnect with Tennessee Gas Pipeline.

In sending the case back to the Commission, the court agreed with Jupiter's argument that the agency's decision was flawed by the "inconsistency of having the point where gathering ends and transportation begins located upstream of another pipeline's facilities [Transco] that the Commission had found to be gathering," the order noted [CP03-11].

But because the "inconsistency identified by the court [with respect to Transco] no longer exists, the Commission affirms its jurisdictional determination" for the Jupiter pipeline facilities, the FERC order responded.

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