A FERC administrative law judge (ALJ) has agreedTranscontinental Gas Pipe Line was well within its rights when itdenied ANR Pipeline an additional interconnection to its mainlinesystem in Louisiana, saying Transco’s action neither wasdiscriminatory, caused ANR to lose business nor violated antitrustprinciples.

In his initial decision, Presiding ALJ David I. Harfeld found Transco had refused similar requests by other pipelines in the pastbased on a “pre-existing” policy, which barred construction for anyparty of a second interconnect on a Transco supply lateral thatwould feed the same pooling point as an existing interconnect. ANRis seeking the additional interconnect at Evangeline Parish, LA, sothat shippers can avoid Transco’s IT feeder charge at its existinginterconnect with Transco near Eunice, LA [CP98-74-001].

Harfeld’s ruling was in contrast to the Commission’s decisionlast July ordering Transco to build the interconnect for ANR. FERClater stayed the order and directed the ALJ to hold hearings on twospecific issues in the case. Interestingly, the Commission didn’task Harfeld to address whether or not ANR should be granted theinterconnect, but he said he felt “behoove[d]” to do so anyway.

The case has captured the interest of some in the gas industrybecause it puts squarely before the Commission the issue of itsinterconnection policy under the Natural Gas Act (NGA), whichrequires pipes to provide interconnects solely to LDCs. TheANR-Transco case, some observers say, poses the question of whetherthe policy should be opened up to require interconnects for non-LDCpipeline customers also.

“The reason why this one’s particularly critical is because thewhole issue of pipeline interconnects ultimately will determine howcompetitive this industry’s going to get,” commented a producersource. The issue of whether FERC has the authority to orderinterconnects was not before Harfeld, but Transco has raised it onrehearing.

When the case comes up again, FERC may decide it has “nolatitude” to make any changes to its interconnect policy under theNGA. “But if they decide to go the other way, it will be veryinteresting,” the producer source said. It conceivably could set aprecedent that would “stretch the boundaries” of the NGA. If thatshould happen, “I wouldn’t be surprised if it [goes] to the SupremeCourt,” he noted.

“I’m keeping my fingers crossed hoping that the Commission willrequire it [the ANR interconnect],” but he questioned whether anyof the other commissioners would “push the issue.”

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