Scana Energy Marketing and Exxon Corp. are urging FERC to delayor deny an extension of the experimental waivers and limitedjurisdiction blanket certificate that it approved for Atlanta GasLight (AGL) a year ago to promote retail gas unbundling in Georgia.

AGL last month asked the Commission to vote to extend theauthorizations by July 28th – three months ahead of their scheduledexpiration in late October. It cited a “pressing need forregulatory certainty and an orderly continuation of its unbundlingprogram” as the reason for requesting urgent action. But ScanaEnergy countered that such haste was both “unnecessary andimprudent in light of the deficiencies” in the Georgia utility’spetition [RP98-206-005].

Specifically, AGL wants FERC to extend and expand a waiver thatenables it to make consecutive monthly prearranged releases tomarketers of Part 284 capacity obtained at a discount from SouthernNatural Gas and other pipelines. It also seeks a continuance of thewaiver of the Commission’s “shipper-must-have-title” policy so AGLcan allocate interstate capacity to marketers under its IncrementalBundled Storage Service (IBSS). The existing waivers were for oneyear. The extensions being sought would be for up to 3 1/2 years.

In its protest, Scana Energy – which is battling AGL’s marketingaffiliate for gas market share in the state – asked the Commissionto delay action on the extension request until the “contemplatedand necessary changes” to the utility’s IBSS service have been madeand “finalized,” and AGL has supplied “sufficient information” toresolve concerns about possible affiliate preference when awardingcapacity to marketers.

Scana Energy said AGL is looking to restructure its IBSS serviceinto two separate jurisdictional services: a peaking and a durationstorage service, with marketers making separate nominations foreach service. AGL has “informally suggested” that the restructuringwould require revisions to its data-processing systems at a cost ofabout $450,000, which would be paid for by marketers. But AGLfailed to provide any specific details about the proposed redesignof IBSS in its request for the extension, the marketer noted.

“If, as the marketers have suggested and AGL apparentlyacknowledges, there is a flaw in the IBSS program, the Commissionshould determine – with input from interested parties – whetherAGL’s proposed remedy is sufficient and cost efficient,” ScanaEnergy said. AGL plans to seek authorization to restructure itsIBSS service from the Georgia Public Service Commission, but ScanaEnergy argues that FERC, not the state, has jurisdiction in thematter.

Also, Scana Energy charged AGL failed to meet the reportingrequirements associated with the limited Section 7 (c) certificateit was awarded to carry out its IBSS service. Specifically, themarketer contends AGL fell far short by not publicly disclosing the”volumes and prices” of capacity that was allocated to itsaffiliates under its limited certificate authority. Although AGLdid submit data confidentially, Scana Energy argues the utilitywaived its right to confidential treatment when it accepted thelimited certificate last year.

Exxon called on FERC to either deny AGL’s extension request”outright,” or to permit it “only for an additional one-year periodso as to allow the Commission to address on a generic basis theappropriate steps, if any, [it] should take to facilitate retailunbundling.”

The producer contends the proposed extension contradicts FERC’sOrder 636 principles because it would allow AGL “to continue tocarve out blocks of interstate pipeline capacity and allocate thatcapacity to designated marketers.” It also was “at odds” with theCommission’s capacity-auction plan outlined in the notice ofproposed rulemaking (NOPR) on short-term transportation, Exxonsaid.

The proposed capacity auction “will not mitigate market power ifLDCs and state commissions can effectively remove large blocks ofcapacity from the marketplace and direct its release to specificmarketers, including AGL’s own affiliate.”

Exxon urged FERC not to continue acceding authority andregulatory control over released interstate capacity to Georgiaregulators. It “will unnecessarily encourage other states toemulate Georgia’s program rather than alternatives adopted bystates that leave federal regulation over interstate capacityfirmly in the hands of the Commission.” The Georgia model, ifmimicked by other states, “will balkanize the interstate pipelinegrid and severely reduce the amount of capacity available toshippers under the Commission’s existing capacity-release program.”

Susan Parker

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