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Madison Gas and Electric Extends ANR Contract

Madison Gas and Electric Extends ANR Contract

Placing another brick in the apparent Chinese wall against Wisconsin pipeline challengers, ANR Pipeline Co. (ANR) executed agreements with the state's Madison Gas and Electric Co. (MGE) to extend gas transportation and storage services that were to expire over the next four years. The agreements are subject to approval by the Public Service Commission of Wisconsin.

"MGE has been a long-time, valued customer of ANR; and we're pleased to continue our service relationship with them on a long-term basis into the new millennium," said Jeffrey A. Connelly, CEO of ANR Pipeline. "These agreements give MGE long-term price certainty at competitive rates and will provide it with increased access to ANR's Joliet Hub.

"With the growing importance of Chicago as a major supply hub in the natural gas industry, MGE is well positioned with these firm contract extensions on ANR to secure and deliver the most economical natural gas supplies to its distribution system."

The news comes following the death of one pipeline challenger to ANR and the indefinite shelving of another (see NGI Nov. 9, 1998). Biting the dust was the watered-down 1 Bcf/d Voyageur Pipeline project, which was sponsored by TransCanada Pipelines and Nicor Inc. "We just couldn't get enough contracts to make it financially viable," said Carl Alston, a spokesman for Nicor, parent of Nicor Gas.

Likewise, the competing 650 MMcf/d Illinois-Wisconsin Express Project, which was being financed by a coalition of companies, has been relegated to a kind of limbo - put on hold - reportedly until an unnamed Wisconsin utility can commit to the project that would target a region in the state, which primarily is served by Wisconsin Gas and the gas operations of Wisconsin Electric Power. Paula Delaney, spokeswoman for coalition member El Paso Energy told NGI, "I imagine it will be resurrected again at some point, but they just couldn't get enough shipper support."

Mark Maranger, CEO of Wisconsin Fuel and Light and past chairman of the Wisconsin Distributor Group, said another pipeline besides ANR "would be helpful in increasing the level of competition for interstate services." Competing projects, once a hot topic for discussion among Wisconsin Distributor Group members, are no longer on the discussion agenda. "The alternate projects are not a group topic any longer, at least not until one becomes viable.. There's nothing really out there to talk about."

Joe Fisher, Houston

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