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AGL's Bid to Extend Waivers Comes Under Fire

AGL's Bid to Extend Waivers Comes Under Fire

Scana Energy Marketing and Exxon Corp. are urging FERC to be deliberative as it weighs Atlanta Gas Light's (AGL) bid for an extension of the waivers and limited jurisdiction blanket certificate that were approved on a limited basis a year ago to encourage retail gas unbundling in Georgia.

AGL last month urged the Commission to approve the extension of the authorizations by July 28th - three months ahead of their expiration in late October. It cited a "pressing need for regulatory certainty and an orderly continuation of its unbundling program" as the reason for requesting urgent action. But Scana Energy countered that the haste sought by the Georgia utility was both "unnecessary and imprudent in light of the deficiencies" in its petition.

Specifically, AGL wants FERC to extend and expand a waiver of its regulations to enable the utility to make consecutive monthly prearranged releases to marketers of Part 284 capacity obtained at a discount from Southern Natural Gas and other pipelines. It also seeks a continuance of the waiver of the Commission's "shipper-must-have-title" policy so AGL can allocate interstate capacity to marketers under its Incremental Bundled Storage Service (IBSS). The extensions being sought would be for up to 3 1/2 years.

In its protest, Scana Energy - which is battling AGL for gas market share in the state - asked the Commission to delay action on the extension request until redesign of the utility's IBSS service has been "finalized," and AGL has supplied "sufficient information" to resolve questions about possible affiliate preference when awarding capacity to marketers.

Scana Energy said AGL is looking to restructure its IBSS service into two separate jurisdictional services: a peaking and a duration storage service, with marketers making separate nominations for each service. AGL has "informally suggested" that such a restructuring would require an estimated $450,000 up-front investment, which would be paid for by marketers. But AGL failed to provide any specific details about the proposed redesign of IBSS in its request for an extension.

"If, as the marketers have suggested and AGL apparently acknowledges, there is a flaw in the IBSS program, the Commission should determine - with input from interested parties - whether AGL's proposed remedy is sufficient and cost efficient," Scana Energy said. AGL plans to seek authorization to restructure its IBSS service from the Georgia Public Service Commission, but Scana Energy argues that FERC, not the state, has jurisdiction in the matter.

Additionally, Scana Energy charged that AGL failed to meet the reporting requirements under the limited Section 7 (c) certificate it was granted to carry out its IBSS service. Specifically, the marketer contends AGL fell far short by not publicly disclosing the "volumes and prices" of capacity that was awarded to its affiliates under its limited certificate authority. Although AGL did submit data confidentially, Scana Energy argues the utility waived its right to confidential treatment when it accepted the limited certificate last year.

Exxon called on FERC to either deny AGL's extension request "outright," or to permit it "only for an additional one-year period so as to allow the Commission to address on a generic basis the appropriate steps, if any, [it] should take to facilitate retail unbundling."

The producer contends the proposed extension contradicts FERC's Order 636 principles because it would allow AGL "to continue to carve out blocks of interstate pipeline capacity and allocate that capacity to designated marketers." It also is "at odds" with the Commission's capacity-auction plan outlined in the notice of proposed rulemaking (NOPR) on short-term transportation, Exxon said.

The proposed capacity auction "will not mitigate market power if LDCs and state commissions can effectively remove large blocks of capacity from the marketplace and direct its release to specific marketers, including AGL's own affiliate."

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