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Hurricane-Ravaged Louisiana Municipals Seek Waiver of Pipe Penalties, Fees

The Louisiana Municipal Gas Authority (LMGA), which represents 57 small municipally owned natural gas distribution systems in the state, has asked FERC to waive the assessment of penalties, fees and charges -- other than for transportation of gas to a customer -- by pipelines on its member customers during the post-Hurricane Katrina emergency.

"Many of the LMGA communities have been devastated by Hurricane Katrina...Power and communications (which are needed to make nominations, monitor gas deliveries and process invoices, among other things) are out in several areas of South Louisiana, and thus the impacted LDCs do not have the ability to take the steps they normally could in order to avoid penalties (or the use of enforced services such as PALS) that a pipeline is empowered to assess under its tariff," wrote Kim M. Clark, counsel for LMGA.

"At this juncture, as South Louisiana tries to recover from the impact of Katrina and return to some form of normalcy, it would be very helpful, from both a business and psychological perspective, if the Commission were to take affirmative action and grant the waivers that the LMGA [requests]," she said. "LMGA members and their customers need to be concentrating their efforts on recovery rather than worrying about the risk of incurring large penalties and similar costs for what are essential services, especially where the cities largely have been deprived by Katrina of the ability to avoid such penalties."

Clark called on the Federal Energy Regulatory Commission to provide the relief to LMGA members for the period beginning Aug. 29, when Katrina struck the Gulf Coast, through the end of the current emergency.

The municipal group is seeking waivers on the following pipelines: Acadian Gas Pipeline System, Crosstex LIG LLC, Cypress Gas Pipeline LLC, Enbridge Pipelines LLC, Florida Gas Transmission, Gulf South Pipeline Co. LP, Southern Natural Gas, Tennessee Gas Pipeline, Texas Eastern Transmission, Texas Gas Transmission LLC and Transcontinental Gas Pipe Line.

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