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Ruby's Anchor Shipper Gets Favorable Nod from CPUC ALJ

The 680-mile proposed interstate natural gas pipeline -- called Ruby Pipeline -- that would extend from the Opal Hub in Wyoming to an interconnect at Malin, OR, took another step toward becoming a reality last week after Pacific Gas and Electric Co. (PG&E), the project's anchor shipper, received a favorable proposed decision regarding the project from a California Public Utilities Commission (CPUC) administrative law judge (ALJ). In related news, the U.S. Bureau of Land Management (BLM) said it is holding a number of public meetings to obtain comments on the environmental ramifications of the proposed pipeline.

El Paso Corp., the project's developer, noted that if the ALJ decision is approved by the commission, PG&E would be able to finalize an agreement announced last year to obtain 375,000 Dth/d of capacity in Ruby Pipeline for delivery of gas to PG&E's gas and electric customers. The proposed decision was issued Oct. 7 and is before CPUC for final disposition as early as Nov. 6.

"This is a significant and welcome proposed decision, which clearly recognizes the benefits of the Ruby Pipeline project to California consumers," said Jim Cleary, president of El Paso's western pipelines.

In his proposed decision, ALJ Timothy Kenney found that Ruby would serve the public interest by enhancing competition, increasing reliability, promoting gas supply diversity, lowering transportation costs, reducing environmental impacts and providing consumers with favorable rates.

PG&E's request for CPUC approval of its Ruby agreement received support from a number of public interest groups, including the commission's Division of Ratepayer Advocates (DRA), The Utility Reform Network (TURN) and Californians for Renewable Energy (CARE). In commission filings, both DRA and TURN stated that the increased supply diversity that Ruby would bring from the Rockies would enhance reliability and promote competition. CARE noted that Ruby's commitment to environmentally responsible operations would be particularly advantageous to California.

In June (see NGI, June 30) Ruby announced that it had received more than 1.1 Bcf/d of commitments from customers under 10- to 15-year contracts and was moving forward with the project, subject to regulatory approvals.

Late last year PG&E signed a letter of intent to acquire a 25.5% interest in the project, but then dropped out this May due to escalating costs (see NGI, Jan. 7). Just days after PG&E's withdrawal, El Paso CEO Doug Foshee said it remained "optimistic" on the project but was "not committed yet" (see NGI, May 12).

The 42-inch diameter pipeline would have an initial design capacity of between 1.3 Bcf/d and 1.5 Bcf/d, depending on the final level of customer commitments. Issuance of the proposed decision, together with the Federal Energy Regulatory Commission's (FERC) Sept. 26 issuance of a notice of intent to prepare Ruby's federal environmental impact statement, means that Ruby is on track to be in service by March 2011. Ruby has said it plans to file with FERC an application for a certificate of public convenience and necessity in January 2009.

Participating as a cooperating agency with FERC, the BLM said last week it will hold four public meetings to gather comments that will help the Commission prepare the Ruby project's environmental impact statement (EIS). The project would cross federally administered lands in Wyoming, Utah, Nevada, and Oregon. The U.S. Forest Service is also participating as a cooperating agency because the project would cross the Wasatch-Cache and Fremont-Winema National Forests in Utah and Oregon, respectively.

The first three meetings were held last week in Montpelier, ID; Hyrum, UT; and Brigham City, UT. The remaining meeting is to be held Wednesday in Lakeview, OR.

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