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FERC Denies Stay of Front Runner Project

FERC Denies Stay of Front Runner Project

The Federal Energy Regulatory Commission last week denied Public Service Co. of Colorado's bid for a stay of the certificate order authorizing KN Wattenberg to construct and acquire facilities for its planned Front Runner pipeline. Some viewed this request by Public Service, a sponsor of the rival Front Range pipeline, as an attempt to quash pipeline competition in the Front Range section of Colorado.

Public Service, whose pipeline is up and running, said it sought the stay because it believes the KN's Front Runner project raises the same jurisdictional issues that are inherent in a hotly disputed case involving the construction of a lateral in Colorado by KN Wattenberg.

At issue in the Colorado lateral case is whether FERC overstepped its bounds when it authorized the construction of the project. Many parties - including the Tenth Circuit Court of Appeals - think the Commission did because the lateral satisfies the requirements for being a Hinshaw line exempt from the Natural Gas Act (NGA). Earlier this year, the court reversed and remanded the original order to the Commission, which has yet to act.

Meanwhile, Public Service has challenged in court KN Wattenberg's certificate for its Front Runner project on grounds that it, too, is a Hinshaw line. In light of the Tenth Circuit's ruling in the Colorado lateral case, the Commission asked the court to remand its certificate order on Front Runner so it can revisit the jurisdictional issues. The court did so last August. If FERC should reverse itself on Front Runner, it could be the final nail in the coffin for the project.

In denying the stay, FERC said the two cases were distinct and did not necessarily raise the same jurisdictional issues. The "facts and circumstances in that [Colorado lateral] case differ from those faced here," the order said [CP98-49-004]. Even if the Commission were to ultimately decide on remand that the lateral was non-jurisdictional, it "would not necessarily require a finding that the Front Runner pipeline is also non-jurisdictional."

KN Wattenberg initially had expected to complete its 108-mile Front Runner project by July of this year, but it was granted an extension until July of 2000. This was not the first delay for the project. KN initially had expected to build it in 1998. Assuming the jurisdictional dispute and other problems are worked out, a finished Front Runner pipeline would transport natural gas from Colorado's northern border, down the eastern edge of the Rocky Mountains to the growing Denver market.

Susan Parker

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