Several Wisconsin utilities and gas producers have asked FERC toplay it cautious when reviewing ANR Pipeline’s application for asecond capacity expansion of its existing system through northernIllinois and southern Wisconsin markets.

Although not opposed to the expansion, Wisconsin Fuel &ampLight, Wisconsin Gas, Wisconsin Public Service Corp., BurlingtonResources Oil &amp Gas and Texaco Natural Gas want the Commissionto put ANR at-risk for any costs that might result from theunder-utilization of capacity on the 194,000 Dth/d project. Theycontend ANR hasn’t shown adequate market support to justify rollingin the $37.5 million cost of the facilities.

The utilities believe the Midwest pipeline also should be heldat-risk for its decision to charge expansion shippers less for firmservice over its mainline from Joliet, IL, to southern Wisconsin(100% load factor rate of 10 cents/Dth plus commodity charges, ACAand fuel) than what existing shippers pay for identical serviceover the same facilities (14 cents/Dth). The producers asked thatANR be required to charge incremental rates for the expansioncapacity, and that the rates include both reservation and commoditycharges.

In its application, which was filed in early March, ANR said ithad signed precedent agreements with shippers for 94,000 Dth/d ofthe firm expansion capacity. But Burlington and Texaco adjustedthat figure downwards because one of the agreements reportedly hasnot yet received corporate approval.

“Thus, at most, only 43% (84,000 Dth/d) of the total capacity ofthe expansion project is committed under binding precedentagreements. The question this raises is whether a 43% commitment isadequate to justify the Commission’s approval of the project.The…answer to this question is ‘no’ unless the certificate isconditioned to require ANR to bear the risk of under-utilization ofthe incremental capacity,” Burlington and Texaco said in theirjoint filing [CP99-241].

ANR contends the entire project (looping, compression andassociated facilities) is needed to meet anticipated market growthalong its existing system from Joliet to southern Wisconsin. Itnoted that its current peak-day entitlements in Wisconsin are 2.2MMDth/d, and that gas demand in the state grew at an annual rate of2.6% during the past decade.

Susan Parker

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