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
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
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