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KN Seeks Year Delay on Front Runner Pipeline

July 14, 1999
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KN Seeks Year Delay on Front Runner Pipeline

Pipeline-on-pipeline competition in the Colorado and Wyoming region will have to wait at least another year, says KN Wattenberg Transmission LLC. It has asked FERC for a one-year extension to build and put into operation its proposed 109-mile Front Runner Pipeline, which was supposed to begin service this month.

KN Wattenberg said it is seeking the "additional time" to conduct "further market analysis" of its project in the wake of the completion of the competing 53-mile, 269 MDth/d Front Range pipeline, which went into operation last November [CP98-49]. The sponsors of Front Runner and Front Range have been in a fierce race to serve the growing Denver, CO, market. Although Front Range is surely the hands-down winner, KN Wattenberg insists - at least for now - there's still a need for its proposed Front Runner facilities.

"KN believes that customers want increased competition in Colorado's Front Range [region]. The new [Front Range] pipeline recently added new capacity for the area. However, the lack of competition did not change. We need to further examine to what degree the marketplace supports another pipeline at this time...," said a spokeswoman for KN Energy, parent of KN Wattenberg. The fact that KN Wattenberg has filed for an extension suggests that "our plan right now is to move forward" on Front Runner, she noted.

KN Wattenberg further believes an extension is "prudent" while the case is under appeal at the D.C. Circuit Court of Appeals, said Richard Kaup, KN's director of certificates. The sponsors of Front Range, Public Service Company of Colorado and Colorado Interstate Gas (CIG), have petitioned the court to overturn FERC's orders approving the KN Front Runner project.

The Commission granted KN Wattenberg an optional certificate last July to build the Front Runner facilities, which were to carry gas from near Rockport, CO, south into the Denver market. The certificate required the proposed pipeline to be completed and in-service by July 10th of this year. But KN Wattenberg hasn't even begun construction on the project.

At the time of the FERC order, the competing Front Range project already had been approved by the Colorado Public Utilities Commission (PUC) and was under construction. The $25 million project was a joint effort of the Public Service Company of Colorado, an LDC, and Colorado Interstate, which oversaw construction of the line. The two companies are involved in an alliance to develop pipeline projects in Colorado.

KN Wattenberg insisted the Front Range project was able to "leapfrog" its Front Runner facilities because Colorado Interstate and affiliate, Wyoming Interstate Co. (WIC), had intentionally bifurcated Front Range into non-jurisdictional and jurisdictional sections. This paved the way for quick approval from the Colorado PUC for the majority of the Front Range project, KN Wattenberg charged, and further cemented CIG's dominance in the Colorado gas market. It lodged a complaint with FERC, which was subsequently rejected.

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