Transco's SouthCoast Project Comes Under Fire
Existing shippers on Transcontinental Gas Pipeline have
expressed widespread opposition to the pipeline's request to roll
in the costs associated with its SouthCoast expansion project in
Georgia and Alabama.
They contend the SouthCoast expansion is Transco's latest effort
to try to segment its projects in order to circumvent the 5%
threshold test for rolled-in rate treatment. When viewed by itself,
they concede the rate impact of the SouthCoast project on existing
shippers is below the threshold. But when considered in the context
of other recent Transco expansions - SunBelt, Mobile Bay and
Cherokee, to name a few - the shippers argue the rate impact on the
existing system is consideraly greater than the required 5%.
Consolidated Edison of New York called on the Commission to view
all four of the expansion projects as a single project to determine
whether Transco has met the 5% test. "To view the SouthCoast
project in isolation from SunBelt, Mobile Bay and Cherokee is to
ignore the reality that Transco is engaged in a major expansion of
its system over a relatively short period of time," ConEd told FERC
Washington Gas Light estimated the rate impact of the Sunbelt,
Cherokee and SouthCoast projects would total more than $260
million, and would exceed the 5% threshold. It further argued that
the system benefits cited by Transco for rolling in the SouthCoast
expansion didn't justify the higher costs.
Some existing Transco customers, especially those on the Sunbelt
expansion, insist that rolled-in rates would give SouthCoast
shippers a competitive advantage over SunBelt shippers, who still
pay incremental rates. To even the score, South Carolina Pipeline
Corp. asked FERC to condition Transco's request for rolled-in
treatment for SouthCoast on the pipeline rolling in the costs of
its SunBelt expansion.
SCANA Energy Marketing opposed Atlanta Gas Light's (AGL)
subscription to SouthCoast capacity, and urged the Commission not
to ratify the agreement - at least until a reverse auction is
conducted that would allow existing Transco shippers to turn back
unused capacity, thus enabling the pipeline to better size its
"...AGL does not need the SouthCoast capacity," said SCANA
Energy, the largest non-affiliated marketer on AGL's system. In
light of the rapid pace of retail restructuring in Georgia, "AGL is
already foisting its upstream capacity on retail marketers in
excess of their reasonable present needs. Moreover, AGL will be
leaving the business of holding upstream interstate capacity very
soon and certainly is not in a position to commit to use this
capacity for any long term."
AGL has entered into a precedent agreement with Transco for
61,160 Dth/d of the 204,099 Dth/d SouthCoast expansion capacity,
which would make it the second largest capacity-holder. The largest
shipper, Santee Cooper, has signed up for 80,000 Dth/d. Transco
says shippers have executed agreements for the entire capacity of
the proposed project, which is expected to give shippers greater
access to Mobile Bay gas production.
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