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FERC OKs Transco's NC Lateral Over State Regulators' Protest

FERC OKs Transco's NC Lateral Over State Regulators' Protest

FERC last week gave Transcontinental Gas Pipe Line the go-ahead to build a $1.2 million lateral and associated facilities in North Carolina over the objections of state regulators, who argued the facilities would constitute a bypass of a local distribution company.

The proposed facilities would directly link Transco with a planned gas-fired generation facility to be built by Rockingham Power L.L.C., which has a contract to begin supplying Duke Power with power in July 2000. The lateral would provide Rockingham Power, an affiliate of Dynegy Marketing and Trade, with about 222 MMcf/d of natural gas. Dynegy asked Transco to build the facilities so it could supply gas to its affiliate.

The North Carolina Utilities Commission (NCUM) opposed the construction of the Transco line, claiming it would result in a bypass of LDC NUI-North Carolina Gas Division and ultimately would lead to economic harm and threaten its customer base. But FERC thought otherwise given Rockingham's status as a new customer. "...[T]he Commission has previously recognized that pipeline service to new customers who are not currently receiving gas service from an LDC does not constitute a bypass of the LDC," the order said [CP99-278].

Dynegy said it had separately negotiated with NUI-North Carolina about possibly building a direct interconnection with Transco or about providing a gas transportation service to Rockingham's planned facility. But it found that NUI-North Carolina couldn't provide the needed service. It doesn't have any pipeline in the ground near Rockingham Power's proposed site, and its system doesn't have sufficient capacity to meet Rockingham Power's needs, according to Dynegy.

Transco expects to begin construction of the 200-feet lateral and metering station this month, and has targeted completion for Dec. 1.

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