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NJ Takes Transco To Court Over MarketLink

NJ Takes Transco To Court Over MarketLink

New Jersey and the state's Department of Law and Public Safety petitioned the D.C. appellate court last week to review two FERC decisions giving Transcontinental Gas Pipe Line the green light to build a hotly-disputed pipeline expansion through the northern part of the state.

In the petition, the state mounted a challenge to the Commission's April ruling granting a long-awaited certificate to Transco for its MarketLink project, which would expand the pipeline's existing system in Pennsylvania and northern New Jersey by 700 MMcf/d.

The state did not ask the U.S. Court of Appeals for the D.C. Circuit to enjoin Transco from building the project while the case is being considered. "It's an option that's open, but it is not one the state has decided to pursue at the moment," said Dana Contratto, a partner in the D.C. law firm of Crowell & Moring LLP, which has been retained by New Jersey.

He noted a number of other petitions for review may be filed with the court today (Monday), which is the deadline. Approximately 112 parties (excluding landowners) were involved in the proceedings at FERC, Contratto estimated.

"Of course, we're disappointed" by the appeal, said Transco spokesman Chris Stockton. "We feel like we worked very had to address the state's issues." He doubted New Jersey's petition would hold up the MarketLink project. "Right now we're in the process of turning precedent agreements into service agreements."

The appeal was filed at the urging of state Gov. Christine Todd Whitman, who "was very much involved in the proceedings" at FERC. The proposed MarketLink pipeline expansion has been fiercely contested by landowners in both the Garden State and Pennsylvania, by New Jersey lawmakers and by Whitman.

New Jersey announced it intended to challenge FERC's decision awarding the certificate within days after it was issued in late April. Whitman threatened all along to take the Commission to court if it gave the go-ahead for the MarketLink expansion. She even appealed to President Clinton for help last year.

The state won a reprieve last December when FERC approved MarketLink, but withheld the certificate until Transco could produce evidence of further market support for the project. New Jersey also is asking the court to review the December decision.

A spokesman for the state's Attorney General Office said New Jersey intends to argue that FERC failed in its legal obligation to properly address the safety of the proposed expansion, failed to protect New Jersey's environment and failed to properly consider a proposed alternative to the MarketLink expansion.

The certificate granted to Transco in April was conditioned on the pipeline first submitting executed contracts for all of the expansion capacity, ridding its project contracts of market-out clauses and showing that its contracts will not hinge on the availability of upstream transportation on the proposed Independence Pipeline.

Susan Parker

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