FERC last Thursday on rehearing affirmed an April order in which it declined to establish a mechanism in interstate pipeline tariffs that would provide for recovery of mitigation and repair costs incurred by downstream gas users as a result of the introduction of revaporized liquefied natural gas (LNG) into their systems.

In its April 20 decision, the Federal Energy Regulatory Commission (FERC) said it was unable to assign the responsibility for mitigation costs incurred by downstream users because LNG, like domestic gas, does not fall under its jurisdiction (see NGI, April 23).

The latest decision is part of a three-year-old case involving a complaint filed by AES Ocean Express LLC against Florida Gas Transmission [RP04-249-006]. Parties in the complaint case argued that FERC is responsible for establishing a method for downstream users to recover their costs for testing, remediation and repair that may be necessary to accommodate the introduction of LNG into the Florida Gas pipeline system.

But a FERC administrative law judge said in an initial ruling in 2006 that such an endeavor would be "a prescription for unnecessary or inflated costs and endless bickering," a decision with which the Commission later agreed (see NGI, April 17, 2006).

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