KN's Horizon Shines in Illinois, Wisconsin
KN Energy has discovered there is more than just cheddar cheese
production going on in Wisconsin these days. Potential customers
from "all segments of the industry" showed interest in its proposed
Horizon Pipeline project and have signed preliminary agreements for
800 MMcf/d of firm capacity, the company said yesterday.
The new pipeline would extend 129 miles from the Chicago Hub in
northern Illinois to Hales Corners, WI, at a connection with
Wisconsin Electric's system in the southern part of the state. "Our
project serves more than just Wisconsin," said KN's Scott Parker,
director of Midwest business development. "We're also serving
northern Illinois.and that is an area of high-growth just like
Wisconsin. Nicor Gas already has signed an agreement for 300
"The standard [markets] are the LDCs in those areas, but also
now the major emphasis we see in this market is gas-fired power
development... ComEd has gone to the marketplace and said they
would like more power development in Illinois and southern
Wisconsin is very similar. There's a substantial number of [new
power projects] out there."
Parker said all of the contracts signed by shippers so far are
preliminary and contain "outs." There will be further negotiations
to make them binding commitments.
The line is expected to be sized between 530 Mcf/d and 1.2
Bcf/d. It slated to be in service in fall 2001. The project would
have two rate zones: an Illinois and a Wisconsin zone. "We're
offering 10-year term negotiated rates of 9.47 cents in Illinois
and 12.2 cents in Wisconsin. There will be recourse rates for the
project too, but all we can do is estimate those right now. Our
10-year rates are fixed. We've basically guaranteed those rates."
The Horizon project is nearly identical to another proposed
pipeline, Guardian, which is being sponsored by Wisconsin LDC
Wisconsin Gas and its parent company Wicor, CMS Energy and Viking
Gas Transmission. Guardian is being designed with a firm capacity
between 650 MMcf/d and 1.1 Bcf/d, and Wisconsin Gas already has
committed to 650 MMcf/d. A Wisconsin Gas spokesman said yesterday
the Wisconsin Public Service Commission has approved Wisconsin Gas'
transportation agreement with Guardian. The project, which would go
into service a year later than Horizon, also just completed an open
season, and an additional three customers have signed binding
precedent agreements for 53 MMcf/d, said spokesman David Fantle.
KN's Parker indicated that he thinks there's enough market
growth to support both Horizon and Guardian. "As we look at the
markets we're serving with our project, we're really serving
different markets than Guardian," he said. "We're well east of what
we know about their project. We don't connect to Wisconsin Gas'
gates like they do. They don't connect to the gates that we do on
Nicor, Natural and others." Horizon plans to file an application
for the project with FERC later this year.
©Copyright 1999 Intelligence Press Inc. All rights reserved. The
preceding news report may not be republished or redistributed, in
whole or in part, in any form, without prior written consent of
Intelligence Press, Inc.