FERC Shoots Down Midcoast Project Alternatives
Midcoast Interstate Transmission's efforts to continue its
monopoly control of the pipeline transportation market in northern
Alabama fell by the wayside when FERC recently rejected its two
controversial project alternatives, citing disinterest on the part
In the first proposal, Midcoast, formerly Alabama-Tennessee
Natural Gas, sought authority to build and operate two compressor
units and associated facilities in northern Alabama to compete with
Southern Natural Gas' proposed pipeline extension into that area.
As a second option, it proposed the so-called Hartselle
Alternative, which called for Sonat and Midcoast to combine their
two projects - Sonat would build the first 98 miles of its northern
Alabama extension, and the final leg would be built by Midcoast (an
eight-mile line) to its existing Hartselle Lateral. A key problem
with the latter was that Sonat was not interested in it.
Both projects were last-ditch efforts by Midcoast to keep its
two biggest customers, Huntsville Utilities of Huntsville, AL, and
Decatur Utilities of Decatur, AL, on its system. The two customers,
which accounted for almost half of Midcoast's system load, strongly
opposed the projects, and instead backed the Sonat extension
because it would provide pipeline competition into their region for
the first time.
In the initial project, the Commission chose to dismiss the
application rather than put Midcoast at risk for the unsubscribed
capacity. "We feel this is the most appropriate course of action
under the circumstances of this case since the intended shippers
have protested the proposal, and state their firm commitment to
their contracts with Southern for capacity on its North Alabama
Pipeline Project facilities," the order said [CP97-343]. FERC noted
Midcoast could refile its application when it could show evidence
of executed contracts or precedent agreements.
Similar arguments were cited by the Commission in rejecting
Midcoast's Hartselle Alternative project [CP98-34]. "...Midcoast
has no contracts, Southern states it does not intend to contract
with Midcoast, and the customers strongly support Southern's
proposal," the order noted. In addition, FERC said Midcoast failed
to submit important environmental information.
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