New Jersey Tries to Derail Transco Project --- Again
In the latest of a yearlong effort to put the brakes to an
unwelcome MarketLink project, the state of New Jersey and the
state's Department of Law and Public Safety called on FERC last
week to rescind and vacate the certificate approving construction
of the controversial pipeline expansion through the northern part
of the state, and to treat sponsor Transcontinental Gas Pipe Line
Corp.'s recent request to amend the project as a new application.
In short, the state asked the Commission to require
Transcontinental to start over from scratch with its MarketLink
project, which originally was intended as a 700 MMcf/d, 154-mile
loop expansion of Transco's existing system in Pennsylvania and
northern New Jersey, but which has since been scaled back
In seeking to vacate the certificate awarded to Transco last
April, New Jersey --- at the urging of Gov. Christine Whitman ---
asked FERC to immediately suspend Transco's ability to condemn
property in the state for construction of the MarketLink project
pending Commission action on the state's requests.
The Garden State contends the make-up of the original MarketLink
project --- capacity requirements, targeted in-service date and
customer identities --- has changed so radically in the past couple
of months that it "makes a mockery of the Commission's whole
pipeline certification process."
Transco now concedes its original proposal "has essentially
fallen through," the state said. "Yet [it] seeks to retain the
certificate it won through that process, even though the grounds on
which it was issued have disappeared. The Commission should not
permit this. The certificate should be rescinded."
"We're disappointed that they've elected to take this course of
action," countered a Transco spokesman, but "we remain eager to
work with New Jersey to address any concerns it may have."
In a companion protest also filed last Monday, New Jersey said
Transco's amended proposal seeking to phase in construction of its
MarketLink expansion calls for such a "completely different
project" that "it should have been filed as, and should be
evaluated as, a new request for a new certificate." According to
the state, "the only feature that really remains of the original
project is its name." Congressman Bill Pascrell Jr. (D-NJ) also
lodged a protest at FERC to Transco's amended proposal on similar
In its September amendment, Williams' Transco proposed building
a multi-stage project, with Phase I targeted for in-service by Nov.
1, 2001 and Phase II by Nov. 1, 2002, for a total of about 296
MMcf/d - "less than half [the capacity of] the original project" -
at a cost of $242 million. The remainder of the project would be
further phased in as shippers firm up agreements. Transco at the
time said it expected the entire 700 MMcf/d to be in service by
Nov. 1, 2004. The pipeline's initial application had called for the
700 MMcf/d to be in service by Nov. 1, 2001.
Phase I and Phase II projects would serve seven shippers. With
the exception of Transco affiliate, Williams Energy Services Co.,
none of them are the original shippers, according to New Jersey.
Even Williams Energy, the state noted, has cut its capacity
commitment to less than half of the initial amount and pushed back
its date for service to begin to Nov. 1, 2001. Several of the new
shippers also have the "rights to delay or withdraw" from their
agreements with Transco, which New Jersey believes makes the market
need for the project questionable at best.
In the meantime, New Jersey has asked the U.S. Court of Appeals
for the District of Columbia to "hold in abeyance" its challenge to
the orders approving the MarketLink project until FERC rules on its
requests. New Jersey and the state's Department of Law and Public
Safety filed a joint appeal last June.
The state contends Transco's proposed amendment violates a
number of conditions imposed by FERC in the MarketLink certificate,
which it says prohibits phasing of the project, requires MarketLink
to be 100% subscribed before construction can start, and sets April
26, 2002 as the deadline for the project to be completed and in
Assuming FERC should require MarketLink to begin all over again,
New Jersey has indicated it will oppose a new application as
vigorously as it did the original one. "The demand is simply too
small in quantity and too shaky in quality to justify the project."
In the event of a new certificate proceeding, "the bar [for
Transco] should be even higher than it was in the original
certificate, not lower" for executed firm transportation
agreements, the state believes. "In spite of its best efforts to
ensure against them, the Commission has now experienced the
disappearing firm commitments to the original project." Transco
must be required to show "truly definite and binding" firm
contracts for 100% of the capacity. Also, it said the April 26,
2002 deadline for MarketLink to be completed and in service should
not be changed.
Moreover, New Jersey said the Commission should give Texas
Eastern Transmission Corp.'s (Tetco) proposal for a system
alternative to MarketLink a second glance. Tetco estimated it would
have 300,000 Dth/d of available capacity for 2000 and additional
capacity in future years, which it said --- when combined with
minimal construction --- could meet the capacity needs of many
MarketLink shippers. But FERC rejected the Tetco alternative in its
environmental analysis of the MarketLink project, saying it was
insufficient to meet the then-stated capacity goal of Transco
(700,000 Dth/d) and the in-service date of Nov. 1, 2000.