Mirant Seeks Stay of Joint Algonquin-Tetco Project

Mirant Americas Energy Marketing L.P. is seeking a "limited stay" of a July order in which FERC gave Algonquin Gas Transmission the green light to add compression in order to help its affiliate, Texas Eastern Transmission, relieve constraints on its system in New York and New Jersey. Mirant insists the order should not have been handed down prior to a Tetco open season being held and a request for released capacity being issued.

The marketer wants the Commission to "vacate that order, or, alternatively, to hold it in abeyance pending the completion of an open season" by Tetco. FERC approved the joint Algonquin-Tetco project even though Tetco had no market agreements.

The project, which would alleviate constraints on Tetco's system east of Lambertville, NJ, calls for Algonquin to upgrade two compressors at its Hanover Compressor Station in Hanover, NJ, at a cost of $6.7 million. This will allow Tetco to shift 200,000 Dth/d of deliveries from the Hanover station to Algonquin's Lambertville, NJ, interconnect. It also will give Tetco another 135,000 Dth/d of additional capacity from the Lambertville point 44 miles to the eastern terminus of its system in Richmond County, NY [CP01-111-001].

Before resorting to this action, Mirant believes Tetco should have first tested the interest of its existing firm shippers in releasing capacity to the pipeline, which it says would have precluded the need for the project altogether. Mirant, a firm shipper on Tetco, indicated that it was interested in doing so.

The marketer noted that FERC "brushed aside" these objections in its July 26 order, agreeing with Tetco's argument that capacity turnbacks "could [result] in stranded capacity upstream of Lambertville." However, Mirant added that Commissioner Linda Breathitt at the time "revealed some discomfort with the Commission's handling of this case" due to the absence of an open season. She said she thought FERC policy "was intended to ensure that new pipeline construction would be based, not on speculation, but on tangible proof of market demand," according to Mirant.

On rehearing, Mirant has called for the Commission to reconsider its July order, which it argues flouts the FERC policy statement addressing certification of new pipeline projects.

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