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FERC OKs Changes in Tennessee's Pooling to Accommodate Marcellus

FERC has approved Tennessee Gas Pipeline's proposed changes to its pooling points to accommodate greater natural gas supplies coming from the Marcellus and Haynesville shale formations and the Rocky Mountain region.

"The Commission finds that Tennessee has provided sufficient justification for redefining its pooling areas and finds that its proposals are just and reasonable, and denies the request to set the issues for hearing," the Federal Energy Regulatory Commission (FERC) said in a recent order [RP11-1566f].

To justify its proposal, Tennessee told FERC "it currently receives approximately 30% of its receipts from the middle of its system in Zone 4 [Ohio and Pennsylvania], up from 5% in 2009." It attributes the hike in receipts to increased Marcellus Shale gas, volumes received into the Tennessee system from the West-to-East Rockies Express Pipeline and increased production in the Haynesville Shale region.

Moreover, Tennessee pointed out that Zone 4 has several operational constraint points: at the 200 and 300 Line pools. It plans to move its 200 Line pool upstream to to the suction side of Station 219 in Mercer County, PA. Tennessee believes this would "reduce the likelihood of a restriction on moving gas into the pool on the 200 Line as it will eliminate the need for gas to flow through a constrained segment of pipe downstream of Station 219 in order to reach the pool."

Similarly, Tennessee said that moving the 300 Line in Northwest Pennsylvania from Station 325 in Sussex County, NJ, upstream to the discharge side of Station 313 will reduce the likelihood of a restriction on moving supplies into the pool, particularly during peak winter periods.

In Zone 1, which encompasses Northeast Louisiana, Arkansas, Mississippi, Alabama and Tennessee on the Tennessee pipe system, the pipeline plans to move the 100 leg pool farther upstream to the Main Line Valve 43. It also proposed to allow supplies that enter the Tennessee system near the terminus of Zone 1 at Station 87 near the Kentucky-Tennessee border to be aggregated into the Zone 1 500 leg pool.

While supportive of Tennessee's proposal, the Northeast State Coalition expressed concern that the pooling point changes in Zone 4 could result in higher fuel, transportation and usage charges for them. Despite assurances by Tennessee that there would be no change in rates for services using a Zone 4 pool, the coalition requested that the pipeline's proposal be modified to ensure that they will not be paying higher charges.

The Commission denied the group's request. "Northeast Customer Group's request for modification of the pool to permit deliveries from the pool directly to other pipeline interconnects and/or storage facilities is denied. Tennessee does not propose any change to the applicable rates for gas transported through a pool," the order said.

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