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
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.
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