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Millennium's Proposed Route Change Unpopular in NY

Millennium's Proposed Route Change Unpopular in NY

If the new route variation that Millennium Pipeline Co. L.P. has proposed for its facilities in Westchester, NY, were a Broadway show, it probably would open and close on the same night, critics contend.

Although it's an improvement over the original one, the proposed new route still doesn't eliminate the "troublesome risk" to the reliability of New York's electric system that would be posed by the gas pipeline sharing Consolidated Edison's right-of-way (ROW), according to the New York State Reliability Council (NYSRC) and Con Edison.

Con Edison suggested that Millennium forego its proposed Westchester facilities altogether, and instead consider using the facilities of Iroquois Gas Transmission System. "By relying on another pipeline for downstream transportation, Millennium could access the New York City market, while avoiding approximately $77.5 million of construction costs associated with the proposed Hudson River crossing and pipeline facilities in Westchester County." Even FERC staff has raised the possibility that Iroquois' Eastchester Expansion Project may be a workable alternative to Millennium's project in Westchester County.

On the plus side, Con Edison conceded that Millennium's proposed route alternative "would reduce.....the length of co-location of gas and electric facilities along [Con Edison's] right-of-way," and it would establish "mitigation measures for designated areas where the gas pipeline crosses or runs within 1,500 feet of [Con Edison's] electric transmission lines." However, it still presents "troublesome and seemingly avoidable" risks to Con Edison's facilities that serve the electric loads of New York City and Westchester County, the utility noted. Likewise, the NYSRC said it had "continuing concerns" with Millennium sharing Con Edison's ROW.

In contrast, Chairman Frank Murkowski (R-AK) of the Senate Energy and Natural Resources Committee has urged FERC to quickly issue a final environmental review on the project, which he said will bring "significant new supplies of competitively priced natural gas to the Northeast." Rep. Benjamin A. Gilman (R-NY), whose district includes Westchester, also asked for expedited consideration of Millennium, which is sponsored by Columbia Gas Transmission, MCN Energy Group and TransCanada PipeLines Ltd. Both lawmakers made their pleas to FERC before Millennium filed its proposed route variation in late June.

Even with its proposed route changes, Millennium pipeline project "would cross Con Edison's right-of-way six times and would run adjacent to or within as little as 100 feet from the right-of-way for two to three miles.....Approximately half of the overall length of the proposed [route] alternative would be located within 1,500 feet of the electric right-of-way," according to Con Edison. "Millennium provides less than full assurance that [its] alternative would eliminate the electric reliability concerns" raised by its sharing Con Edison's ROW.

If Millennium were to be sited along Con Edison's ROW and there was a major explosion involving the pipeline, several substations serving electricity to large parts of Westchester County and New York City would be damaged and would create major blackouts, warned the NYSRC, which added that it could take many days to restore power "depending upon the severity of the physical damage sustained by the facilities." Moreover, it said gas deliveries for generation in New York City may be interrupted also.

There's another reason Con Edison isn't eager to jump on the Millennium bandwagon. The combination utility said it would have to expand its distribution system significantly to accept the 350,000 Dth/d that Millennium proposes to deliver to an interconnection with Con Edison in Mount Vernon, NY. Con Edison noted it isn't about to shell out $50-$100 million for an expansion without any commitments from customers. So far, "no party has committed to use and pay for Con Edison's reinforcement facilities, and Con Edison is not prepared to build reinforcements for the Millennium project on speculation."

Millennium has said it would assume the risk of relying on Con Edison for takeaway capacity and service to consumers in the utility's service territory, Con Edison said. Con Ed wasn't convinced and said, in addition, Millennium hasn't demonstrated that the future of its pipeline project depends on supplying "substantial" firm deliveries of gas in Westchester County. It urged FERC to consider the Iroquois expansion alternative.

Iroquois said Millennium dismissed its Eastchester Expansion Project as a partial alternative on the grounds that it wouldn't be able to serve International Business Machines Inc. (IBM) in Yorktown, NY, and other customers in Westchester County, and wouldn't be in service by the fall of 2001.

According to Millennium's most recent list of potential shippers, IBM has executed a precedent agreement for only 1,000 Dth/d of firm transportation capacity, which represents less than 0.2% of the proposed pipeline's throughput, Iroquois noted. It also has executed agreements with North East Heat & Light Co. (a small LDC in northwest Pennsylvania) for 7,500 Dth/d; and with marketing companies that have no specified end-user markets.

"No other customers in Westchester County are identified; it appears that approximately half of Millennium's throughput is proposed to be delivered to Consolidated Edison at the proposed Mount Vernon delivery point, which is less than two miles from Iroquois' proposed delivery point to Consolidated Edison," said Iroquois.

Moreover, Iroquois argued Millennium hasn't demonstrated that it must have its facilities in service by Nov. 1, 2001. Iroquois said a study it submitted along with its Eastchester Expansion application revealed the bulk of the gas demand for generation facilities in New York City will not occur until a year later - Nov. 1, 2002. Also, Iroquois believes Millennium's targeted November 2001 in-service date is "optimistic" in light of the recent decision by the National Energy Board's Joint Review Panel to delay consideration of Millennium's upstream Canadian facilities until November.

Susan Parker

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