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ANR Suing WI PSC for Part in Guardian Deliberations

ANR Suing WI PSC for Part in Guardian Deliberations

ANR Pipeline, charging Wisconsin Public Service Commission filings by Wisconsin Gas for the Guardian Pipeline project were unlawfully kept secret, is suing the PSC in Dane County, WI, Circuit Court. ANR wants the court to reverse and set aside PSC orders conditionally approving Guardian. ANR seeks remanding of the case and the opportunity to intervene in a contested case hearing.

Guardian would be a 147-mile interstate from the Chicago hub to Watertown, WI. Wisconsin Gas is proposing a 35-mile lateral to connect its system to Guardian in the Milwaukee area. The pipeline, which would compete against ANR, is expected to cost $230 million and the lateral $45 million. Wisconsin Gas would own 30% of the pipeline and 100% of the lateral. Guardian owned by Wisconsin Gas parent WICOR, CMS Energy, and Viking Gas Transmission .

The LDC has executed a precedent agreement with Guardian for 650 MMcf/d of firm capacity that would displace capacity held by Wisconsin Gas on ANR. ANR maintains it can more cheaply build any new capacity needed to meet the needs of Wisconsin Gas and others in Wisconsin.

ANR says the cost of the redundant Guardian and the lateral would be unfairly borne by ratepayers, to the tune of $175 million over 10 years. Wisconsin Gas says the project would save ratepayers $100 million over its first 10 years. ANR says the project would result in "significant, unnecessary environmental disturbances and landowner disruption."

The PSC refused to allow ANR to participate in Guardian proceedings, denied ANR access to documents and secretly conditionally approved the precedent agreement "based on self-serving conclusory statements by WGC concerning the benefits of the Guardian Project," the pipeline says.

Wisconsin Gas' response to the suit is somewhat akin to "what's sauce for the goose is sauce for the gander."

"First of all, the supply contract that Wisconsin Gas filed with the PSC is confidential, and information in it could aid a competitor," said Wisconsin Gas spokesman David Fantle. "Other ANR customers filed these confidential agreements with the PSC, and in those cases ANR did not complain because the process benefits their business interests.

"Shame on ANR. They filed the same kind of supply contracts with the PSC, and they should understand the confidential nature of these type of filings. We believe the PSC followed all the appropriate procedures when reviewing the Wisconsin Gas filing. The time for a full public review of the project will come when Wisconsin Gas files an application for its lateral project with the PSC in the fall of this year. This is just another stall and delay tactic from ANR because their monopoly status is in jeopardy and Guardian represents lower prices and true competition."

ANR's suit also seeks to have entered into the Guardian case record a report titled "The Proposed Guardian Pipeline For Wisconsin," by business professor and former Wisconsin PSC Chairman Charles Cicchetti, who was hired by ANR (See NGI July 19, 1999).

Cicchetti concluded Guardian would be costly and inefficient because it would be sponsored by regulated monopoly Wisconsin Gas. "An inefficient new pipeline can only be profitable if it has an affiliate that contracts for service and can pass on to its customers the extra cost," the Cicchetti report says. "A new high-cost pipeline that self-deals with a regulated affiliate can increase its profits so long as regulators allow the regulated monopolist affiliate to pass the excessive pipeline transportation costs through to its captive customers. Additionally, this self-dealing is masking the second problem related to unneeded capacity that the Guardian Pipeline would add."

Joe Fisher, Houston

©Copyright 1999 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

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