NSTAR Gas Co. has called on FERC to enjoin Algonquin Gas Transmission LLC from curtailing firm transportation service to its customers in the cities of Somerville and Cambridge, MA.
In a Section 5 complaint filed Monday, the Boston-based local distribution company claims that Algonquin, a subsidiary of Spectra Energy Corp., has threatened to totally curtail service for five or more weeks through its J-2 pipeline in conjunction with its integrity management program. This would affect service to residences, schools, various industries and hospitals as well as the nation's premier research universities, NSTAR Gas said.
NSTAR alleges that this is an "anticipatory breach of contract" by the pipeline and violation of Algonquin's tariff.
The company also asked FERC to find that "any costs associated with avoiding the curtailment are part of Algonquin's obligation to prudently operate and adequately maintain its integrated pipeline facilities, and therefore should be rolled in to its systemwide rates."
The J-2 pipeline is the primary supply source to 45,000 NSTAR customers in its Cambridge Division, which includes the cities of Somerville and Cambridge. The 14-inch diameter lateral pipeline runs off of Algonquin's J lateral and extends about two miles from the Mystic Gate Station in Medford to an interconnection point with the NSTAR system in Somerville.
Algonquin is proposing the curtailment to conduct inspections and repairs to its system in compliance with the Pipeline Safety Improvement Act of 2002 and Department of Transportation regulations, according to NSTAR. The two sides have met on "numerous occasions" to explore ways to avoid a service interruption to NSTAR Gas customers, and concluded that looping was the only practical alternative, it said.
NSTAR said Algonquin offered to construct a parallel line, provided that NSTAR would pay the entire $28 million in construction costs. "While NSTAR has indicated that it is willing to work with Algonquin to minimize the cost of alternative service, there is no basis upon which it should bear all the costs associated with Algonquin's satisfaction of its existing firm service obligations or its compliance with the safety provisions of the Pipeline Safety Improvement Act," the utility said.
NSTAR argues that Algonquin's scheduled maintenance is not a force majeure event for which liability for service interruption can be absolved. "The Commission has consistently held that 'scheduled maintenance and repairs' are considered within the control of the pipeline, and thus are to be treated as nonforce majeure events," it said.
"If...Algonquin's tariff is read to include the essential elements of force majeure, the Pipeline Safety Improvement Act inspection and repair issue at hand does not constitute an event falling within [force majeure]."
"Algonquin acknowledges that the need to inspect the pipeline is foreseeable, and that potential curtailments may be avoided by prudent prophylactic means. Accordingly...Algonquin's tariff would not excuse its obligation to provide firm, reliable and continuous service to NSTAR."
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