ALJ Backs Transco's Refusal of ANR Interconnect
A FERC administrative law judge (ALJ) has agreed
Transcontinental Gas Pipe Line was well within its rights when it
denied ANR Pipeline an additional interconnection to its mainline
system in Louisiana, saying Transco's action neither was
discriminatory, caused ANR to lose business nor violated antitrust
In his initial decision, Presiding ALJ David I. Harfeld found
Transco had refused similar requests by other pipelines in the past
based on a "pre-existing" policy, which barred construction for any
party of a second interconnect on a Transco supply lateral that
would feed the same pooling point as an existing interconnect. ANR
is seeking the additional interconnect at Evangeline Parish, LA, so
that shippers can avoid Transco's IT feeder charge at its existing
interconnect with Transco near Eunice, LA [CP98-74-001].
Harfeld's ruling was in contrast to the Commission's decision
last July ordering Transco to build the interconnect for ANR. FERC
later stayed the order and directed the ALJ to hold hearings on two
specific issues in the case. Interestingly, the Commission didn't
ask Harfeld to address whether or not ANR should be granted the
interconnect, but he said he felt "behoove[d]" to do so anyway.
The case has captured the interest of some in the gas industry
because it puts squarely before the Commission the issue of its
interconnection policy under the Natural Gas Act (NGA), which
requires pipes to provide interconnects solely to LDCs. The
ANR-Transco case, some observers say, poses the question of whether
the policy should be opened up to require interconnects for non-LDC
pipeline customers also.
"The reason why this one's particularly critical is because the
whole issue of pipeline interconnects ultimately will determine how
competitive this industry's going to get," commented a producer
source. The issue of whether FERC has the authority to order
interconnects was not before Harfeld, but Transco has raised it on
When the case comes up again, FERC may decide it has "no
latitude" to make any changes to its interconnect policy under the
NGA. "But if they decide to go the other way, it will be very
interesting," the producer source said. It conceivably could set a
precedent that would "stretch the boundaries" of the NGA. If that
should happen, "I wouldn't be surprised if it [goes] to the Supreme
Court," he noted.
"I'm keeping my fingers crossed hoping that the Commission will
require it [the ANR interconnect]," but he questioned whether any
of the other commissioners would "push the issue."
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