FERC Monday approved a stipulation and consent agreement requiring Columbia Gulf Transmission to pay a $2 million penalty for its repeated refusal to allow Tennessee Gas Pipeline to construct an interconnection on a line that is jointly owned and operated by the two pipelines on the Gulf Coast in Louisiana.

FERC's Office of Enforcement alleged that "Columbia Gulf failed to comply with the Commission's direction by creating unwarranted obstacles to Tennessee's interconnection plans and by not meaningfully working with Tennessee to allow the interconnection after the Commission had directed Columbia Gulf to allow the new interconnection as soon as operationally possible," the agency order said [IN07-25].

The Enforcement Office further alleged that Columbia Gulf's actions "undermined the Commission's open-access program," it noted.

The Tennessee-requested interconnection was eventually built and placed into service in October 2006, but not before FERC issued three orders directing Columbia Gulf to permit the tap. The Commission issued its last directive to Columbia Gulf in July 2006, and then referred the case to the Enforcement Office (see Daily GPI, July 26, 2006).

"There is no question that companies subject to the Commission's jurisdiction must comply promptly and fully with the Commission's orders," said Chairman Joseph Kelliher. "Failure to do so causes harm to the regulatory process and to the orderly administration of our government statutes."

The stipulation and consent agreement requires Columbia Gulf to pay the $2 million penalty within 10 days of the effective date of the agreement. It also requires Columbia Gulf to file a motion seeking dismissal of its petition for review of FERC's decision in the case. And the agreement specifies that the pipeline cannot pass through the penalty to its ratepayers.

The agreement responds to a March 2004 complaint filed by El Paso Corp.'s Tennessee, accusing Columbia Gulf of engaging in a "pattern of anticompetitive 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 at Egan, LA (see Daily GPI, March 16, 2004). 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 line of the pipe segment that extends to Cocodrie, LA. Tennessee sought the interconnect to improve the operational efficiencies of the entire Blue Water system [RP06-297, RP04-215].

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