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FERC Refuses to Stay Sonat's Northern Alabama Project

FERC Refuses to Stay Sonat's Northern Alabama Project

FERC last week denied Midcoast Interstate Transmission's request for a limited stay of the orders giving Southern Natural Gas (Sonat) the go-ahead to build an extension of its mainline into northern Alabama.

This was the latest in a string of defeats at FERC for Midcoast, which has been battling the construction of the Sonat expansion for about three years now because it will mean the loss of two of its biggest customers - Decatur Utilities and Huntsville Utilities.

"...[A]lthough we recognize that Midcoast has enjoyed its status as the sole interstate pipeline supplier to the cities of Huntsville and Decatur for more than 47 years, Midcoast's wish to maintain its monopoly of that market cannot be the basis for granting a stay of construction of Southern's project," the FERC order said [CP96-153-005].

In a separate order, FERC rejected Sonat's tariff sheets that proposed revisions in interruptible and firm no-notice service on the pipeline's system post-construction of the northern Alabama project. The Commission reminded Sonat that it had ordered the pipeline to confine its modifications - specifically how it defined the system benefits test in its tariff and the circumstances under which it would make a contribution in aid of construction (CIAC) - to firm transportation only [RP99-159].

Potential shippers said they had reservations about Sonat being permitted to pass through CIAC payments for the construction of incremental facilities to other customers on its system. Under CIAC, Sonat proposes to assume part of the costs for facilities that a shipper would build on its own at or near receipt or delivery points on the pipeline's expansion. The Commission agreed that CIAC costs should not be automatically passed through. "The inclusion of the CIAC...will be subject to scrutiny in a rate case in the same manner as any other cost," the order said. FERC plans to hold a technical conference on the CIAC proposal.

Susan Parker

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ISSN © 2577-9877 | ISSN © 1532-1266
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