ANR Pipeline slipped more than a few lumps of coal in GuardianPipeline’s stocking over the holidays’ in the form of a 250-pageprotest and motion for dismissal filed with FERC. The Coastalsubsidiary has a right to be angry at its new competitor. TheGuardian project will result in the decontracting of about 650MDth/d of ANR’s firm transportation capacity by Guardian shipperand affiliate Wisconsin Gas and the loss of $54 million in annualrevenue, according to ANR’s calculations.
Guardian is a proposed 150-mile bypass of ANR that will provide750 MMcf/d of firm transportation from the Chicago hub near Joliet,IL, to a connection in Ixonia, WI, with a pipeline lateral proposedby Wisconsin Gas. The project primarily will serve the Milwaukeearea. If Guardian is built, ANR wants FERC to force Guardian’s mainshipper, Wisconsin Gas, to pay an exit fee to ANR.
ANR claims Wisconsin Gas’ ratepayers will be paying between $175million and $242 million more over the course of the 10-yearagreement with Guardian than they would have to pay ANR for similarservice. Foremost among its many arguments against the Guardianproject, however, is the charge that the proposed project should bedismissed on jurisdictional grounds because it is split into twoparts, one being a jurisdictional pipeline and the other being anon-jurisdictional lateral that will be built by Wisconsin Gas.
ANR said the proposed 38-mile lateral from Ixonia to Milwaukeeis a “critical piece” of the interstate pipeline, a piece whichGuardian sponsors, Wisconsin Gas parent WICOR and Northern StatesPower subsidiary Viking Gas Transmission, are attempting tosubsidize through Wisconsin Gas’ rates. Guardian is”anticompetitive,” according to ANR, because it uses Wisconsin Gas’monopoly power over distribution to force its ratepayers to pay fora large portion of the proposed project, namely the Wisconsin GasLateral.
ANR said Commission precedent requires the two pipeline segmentsto be treated as one system. Even if the Wisconsin lateral isconsidered a separate pipeline, “standing alone it is an interstatenatural gas transmission pipeline that is not exempt from thisCommission’s jurisdiction.” ANR has filed a motion for summarydisposition and dismissal of the application because it claims theapplication is deficient for not including the lateral.
Meanwhile, Wisconsin Gas told the Commission in supportingcomments that “the introduction of Guardian as a pipelinealternative to ANR will free a significant portion of the serviceterritory of Wisconsin Gas and others from being captive to ANR,thereby protecting them against cost shifting and crosssubsidization. Guardian (with the Wisconsin Gas Lateral) will allowWisconsin Gas and its customers to have an opportunity to obtainthe benefits of procompetitive Commission policies…” WisconsinGas noted 84%, or 770 MDth/d, of its upstream pipelinetransportation is provided by ANR, while Northern Natural andViking Gas are capable of providing only small percentage of itsneeds. It also noted that the Guardian Project was the end resultof a request for proposals process in which ANR participated.”Guardian gave Wisconsin Gas more competitive benefits and morebeneficial choices for it and its customers than did ANR’sproposals.”
The Guardian project is designed to serve existing demand and inpart to serve growing gas demand for power generation in Wisconsin.It should be noted that ANR also plans to build a new pipeline intoWisconsin and has teamed up with Peoples Gas to construct a systemthat would extend underneath Lake Michigan. ANR claims the proposed130-mile line would not compete with Guardian. The ANR-Peoplesproject is expected to cost $300 million and would carry up to 1.4Bcf/d of gas. Following environmental review, the ANR-Peoplespartnership plans to file an application for the project with theFERC later this year.
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