FERC to Address Competing Pipeline Projects
Faced with an onslaught of new pipeline projects, FERC this week
is expected to propose a policy statement that seeks to establish a
"framework" by which it can pick the winner when two or more
projects are destined for the same market [PL99-3]. The Commission
has listed discussion of a policy statement on pipeline
construction certificates on the docket for its regular open
meeting Wednesday. It will be FERC's last meeting until September.
"It's clear the Commission is in a box so to speak. It's got to
start to make decisions amongst competing projects" in the
Northeast, Midwest and Florida markets, said one Commission
observer. "I think previously...the Commission was hoping, for
instance with respect to the Independence and Millennium pipeline
projects, that at some point there would appear to be a clear
winner based on contract demand...But that hasn't happened. It
looks like FERC is going to eventually have to make a decision on
these competing projects," he noted.
The observer expects FERC to revisit the Ashbacker Doctrine,
which requires a winner to be selected when there are two or more
competing pipeline projects headed for the same market. "Probably
what I suspect they're going to be doing is asking parties how do
you make the selection. Do you do it on least cost?"
That approach would almost always favor incumbent pipelines over
new entrants to the market, thus "excluding any possibility of
competition," he said. The policy statement will be "very
important" for pipelines because "it will determine the degree to
which new entrants will have an opportunity to build new grassroots
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