In a terse letter to FERC last week, Cuba Wadlington Jr.,Transcontinental Gas Pipe Line’s senior vice president and generalmanager, became the first pipeline representative to formallycriticize the Commission’s recent departure from its long-standingpolicy of issuing preliminary determinations on pipeline expansionapplications. Wadlington said Transco officials are disappointedabout the decision, which affects their MarketLink project, theproposed Independence Pipeline – in which Transco is a partner -the upstream ANR-sponsored SupplyLink project and the competingMillennium Pipeline project.

In a 3-2 vote at its March 10 meeting, FERC broke with thedecade-old procedure in its review of the four controversialpipeline projects intended to carry Canadian gas from the U.S.Midwest to the northeastern gas market. It deferred action on thefate of the projects until all of the environmental reviews arecompleted because of the wide range of issues and concerns theyraised – specifically, the unparalleled level of landowneropposition, questions about market “need” and “significant anddifficult” environmental concerns.

The “confluence” of the issues calls for “decision-making thataffords us the ability [to consider] the whole record at one time,”Chairman James Hoecker said at the time. FERC needs to be able to”balance all the interests and concerns” – public interest,economic, landowner and environmental – in one fell swoop.

But Wadlington told the Commission its decision “substantiallyincreases the business risks on the pipeline sponsors as theycontinue to make significant financial and contractual commitmentsnecessary to maintain the Nov. 1, 2000 in-service dates without thebenefit of regulatory guidance on the fundamental businessproposals.” Wadlington said in light of these increased businessrisks “it is imperative” that the Commission hand down a decisionby September as promised.

He added the projects were planned based on well-establishedregulatory practices and should not now be delayed while theCommission considers changing those practices.

In the meantime, however, the Commission’s action appears tohave had little impact on the demand for MarketLink’s capacity orthe ability of Transco’s parent Williams to continue marketing theproposed project. Williams announced yesterday it signed up anothermajor customer. Sunset Energy Fleet LLC signed a 15-year agreementfor 95,600 Dth/d of firm capacity on the pipeline to supply a 520MW power generation plant in New York City.

MarketLink is a $528 million expansion of Transco’s pipelinesystem from the Leidy Hub in western Pennsylvania to New York City.The project would add 700,000 Dth/d of capacity.

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