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FERC Resolves Dispute Between Tennessee, Columbia Gulf Over Interconnect

FERC on Monday affirmed an administrative law judge (ALJ) ruling that clears the way for Tennessee Gas Pipeline to build an interconnect to the Columbia Gulf Transmission-operated portion of a transportation system along the coast of Louisiana that the two pipelines jointly maintain and operate.

The FERC order responds to a March 2004 complaint filed by El Paso Corp.'s Tennessee, accusing Columbia Gulf of engaging in a "pattern of anti-competitive conduct and practices" by denying its request to construct an interconnect from its Muskrat line to the Columbia Gulf-operated side of the Blue Water Pipeline (BWP) at Egan, LA [RP04-215]. The complaint was set for trial before a presiding ALJ.

The ALJ in its initial decision rejected Tennessee's claims of anti-competitive behavior by Columbia Gulf, but found that Tennessee had satisfied the five conditions necessary under FERC's regulations (the 2000 Panhandle ruling) for obtaining an interconnection.

"We conclude that the ALJ was correct in rejecting Tennessee's specific claims of anti-competitive behavior," the FERC order said. However, it noted the Panhandle decision cited by the ALJ "enables a party desiring access to a pipeline to obtain an interconnection if it satisfies five conditions. Those conditions have been satisfied by the evidence" in the complaint case.

As a result, "Columbia Gulf is directed to allow the construction and operation of the receipt point requested at Egan, LA, by Tennessee as soon as [is] operationally possible," the order said.

The two pipelines have coordinated operations and shared capacity on the offshore Blue Water system for more than 30 years, with Columbia Gulf operating the western shore line of the system that terminates at Egan, and Tennessee operating the eastern shore lines of the pipe segment that extends to Cocodrie, LA.

In its complaint, Tennessee said the sought-after interconnect would provide operational efficiencies for the entire BWP system, as well as would allow Tennessee to maximize the use of its share of the capacity on BWP and provide shippers with operational benefits.

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