Midcoast, GASP Lose Court Fight over AL Line
Midcoast Interstate Transmission and two groups of
landowners-environmentalists last week lost their year-long battle
in court to overturn the FERC orders awarding a certificate to
Southern Natural Gas to build and operate a competing pipeline
extension into northern Alabama.
Midcoast, which has enjoyed a monopoly over pipeline
transportation in the region for years, challenged the orders in
the U.S. Court of Appeals in Washington D.C., arguing that FERC
failed to make a "reasoned" comparison of the competing
environmental and economic factors of Southern Natural's extension
with the two system alternatives it proposed - the
Alabama-Tennessee Alternative and the Hartselle System alternative.
It also challenged the Commission's approval of rolled-in pricing
for the extension.
Although FERC in its decision conceded the "environmental
superiority" of Midcoast's Alabama-Tennessee option, the Commission
said it approved the Southern Natural extension "for countervailing
policy reasons" - namely that it would provide for the first time
in nearly 50 years a competitive alternative for the captive
pipeline customers of Midcoast. It conditioned Southern Natural's
certificate on the pipeline agreeing to comply with sterner
environmental measures to even the scale with Midcoast's
The Commission's action "strikes us as responsible agency
decision-making," wrote Senior Judge James Buckley in the opinion
issued last Tuesday. Also, he said the court couldn't fault FERC
for rejecting Midcoast's claims that its system alternatives were
economically superior, especially since Midcoast's two largest
customers - the municipal utilities of Huntsville and Decatur, AL -
had signed long-term contracts to take service on Southern's
The construction of the extension has been completed. It extends
about 118 miles from Tuscaloosa, AL, to Huntsville, and will carry
70 MMcf/d of natural gas supplies to the municipalities of
Huntsville and Decatur.
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