ANR Chips Away at Competing Guardian Project
ANR Pipeline slipped more than a few lumps of coal in Guardian
Pipeline's stocking over the holidays' in the form of a 250-page
protest and motion for dismissal filed with FERC. The Coastal
subsidiary has a right to be angry at its new competitor. The
Guardian project will result in the decontracting of about 650
MDth/d of ANR's firm transportation capacity by Guardian shipper
and affiliate Wisconsin Gas and the loss of $54 million in annual
revenue, according to ANR's calculations.
Guardian is a proposed 150-mile bypass of ANR that will provide
750 MMcf/d of firm transportation from the Chicago hub near Joliet,
IL, to a connection in Ixonia, WI, with a pipeline lateral proposed
by Wisconsin Gas. The project primarily will serve the Milwaukee
area. If Guardian is built, ANR wants FERC to force Guardian's main
shipper, Wisconsin Gas, to pay an exit fee to ANR.
ANR claims Wisconsin Gas' ratepayers will be paying between $175
million and $242 million more over the course of the 10-year
agreement with Guardian than they would have to pay ANR for similar
service. Foremost among its many arguments against the Guardian
project, however, is the charge that the proposed project should be
dismissed on jurisdictional grounds because it is split into two
parts, one being a jurisdictional pipeline and the other being a
non-jurisdictional lateral that will be built by Wisconsin Gas.
ANR said the proposed 38-mile lateral from Ixonia to Milwaukee
is a "critical piece" of the interstate pipeline, a piece which
Guardian sponsors, Wisconsin Gas parent WICOR and Northern States
Power subsidiary Viking Gas Transmission, are attempting to
subsidize through Wisconsin Gas' rates. Guardian is
"anticompetitive," according to ANR, because it uses Wisconsin Gas'
monopoly power over distribution to force its ratepayers to pay for
a large portion of the proposed project, namely the Wisconsin Gas
ANR said Commission precedent requires the two pipeline segments
to be treated as one system. Even if the Wisconsin lateral is
considered a separate pipeline, "standing alone it is an interstate
natural gas transmission pipeline that is not exempt from this
Commission's jurisdiction." ANR has filed a motion for summary
disposition and dismissal of the application because it claims the
application is deficient for not including the lateral.
Meanwhile, Wisconsin Gas told the Commission in supporting
comments that "the introduction of Guardian as a pipeline
alternative to ANR will free a significant portion of the service
territory of Wisconsin Gas and others from being captive to ANR,
thereby protecting them against cost shifting and cross
subsidization. Guardian (with the Wisconsin Gas Lateral) will allow
Wisconsin Gas and its customers to have an opportunity to obtain
the benefits of procompetitive Commission policies..." Wisconsin
Gas noted 84%, or 770 MDth/d, of its upstream pipeline
transportation is provided by ANR, while Northern Natural and
Viking Gas are capable of providing only small percentage of its
needs. It also noted that the Guardian Project was the end result
of a request for proposals process in which ANR participated.
"Guardian gave Wisconsin Gas more competitive benefits and more
beneficial choices for it and its customers than did ANR's
The Guardian project is designed to serve existing demand and in
part to serve growing gas demand for power generation in Wisconsin.
It should be noted that ANR also plans to build a new pipeline into
Wisconsin and has teamed up with Peoples Gas to construct a system
that would extend underneath Lake Michigan. ANR claims the proposed
130-mile line would not compete with Guardian. The ANR-Peoples
project is expected to cost $300 million and would carry up to 1.4
Bcf/d of gas. Following environmental review, the ANR-Peoples
partnership plans to file an application for the project with the
FERC later this year.
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