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FERC Fears AGL Too Dependent on Waivers

FERC Fears AGL Too Dependent on Waivers

FERC has decided to give Atlanta Gas Light (AGL) a short-term extension of waivers to Commission regulations to preserve the "status quo" of natural gas unbundling in the state while it explores other non-waiver options for utilities.

The Commission limited the Atlanta, GA-based utility to only a 17-month extension of its existing experimental waivers, which are due to expire in October. AGL had asked for an extension of about three and a half years.

But FERC cited concerns about the impact of granting such a long-term extension on the interstate pipeline market. "In addition, if we were to extend the waiver for 3 « years, it is unclear that this would be Atlanta's final request for a waiver of the capacity-release regulations. In fact, all indicators suggest otherwise," the draft order said [RP98-206-005].

In June, AGL had asked FERC to extend and expand a waiver that enables it to make consecutive monthly prearranged releases to marketers of Part 284 capacity obtained at a discount from Southern Natural Gas and other pipelines. It also sought a continuance of the waiver of the Commission's "shipper-must-have-title" policy so AGL could allocate interstate capacity to marketers under its Incremental Bundled Storage Service (IBSS). The utility's existing waivers were for one year.

Although it turned down AGL's request for the longer extension, the Commission said it couldn't cut the LDC off cold turkey from the waivers. It "recognizes that waiver of the shipper-must-have-title policy is important to Atlanta's retail unbundling program as currently designed. A denial of extension of the waiver would likely require an immediate restructuring of the Georgia retail unbundling program or, at a minimum, could cause parties hardship in continuing to proceed under the state unbundling program..."

FERC settled on the short-term extension "to preserve the status quo, while we explore the other options available that will enable Atlanta's state retail unbundling program to proceed without the continuing need for waivers of the Commission regulations and special authorizations." It also said it will hold a technical conference to examine the effect of the waivers and Atlanta's unbundling program on the interstate market. FERC directed a number of pipelines that provide part 157 service to AGL-such as Southern Natural, Transco, South Georgia Natural Gas and others-to participate in the conference. A date has not been set.

Separately, the Commission also awarded Baltimore Gas and Electric a 12-month waiver of its shipper-must-have-title regulation in order to carry out a retail unbundling program.

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