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PG&E GT-NW Authorized

PG&E GT-NW Authorized

To Eliminate Stanfield Bottleneck

FERC has approved a $6 million expansion of Pacific Gas Transmission Northwest's (PG&ampE GT-NW) system that will increase capacity between Kingsgate, BC, and Stanfield, OR, by 56,000 Dth/d and provide additional systemwide winter capacity of 20,000 Dth/d.

The project is designed to relieve a transportation bottleneck at Stanfield, where PG&ampE GT-NW has a major interconnect with Northwest Pipeline. Currently PG&ampE GT-NW has underutilized capacity from Stanfield south to Malin, OR, primarily because capacity north of Stanfield to Canadian supply sources is constrained.

PG&ampE GT-NW proposes to add a total of 9,700 hp of compression at four stations on its system. The pipeline company signed agreements for a total of 38,392 Dth/d of year-round capacity and 20,000 Dth/d of winter-only service with four shippers: Avista Energy (20,000 Dth/d Kingsgate to Malin winter only service for 15 years), Duke Energy (5,000 Dth/d Kingsgate to Malin three years and 10,000 Dth/d Kingsgate to Stanfield three years), Montana Power Trading (10,000 Dth/d from Kingsgate to Malin for three years) and Poco Marketing (13,392 Dth/d from Kingsgate to Stanfield for seven years).

The California Public Utility Commission, DEK Energy and PanCanadian charged that the pipeline did not sign up sufficient demand to justify the expansion, and PanCanadian requested PG&ampE GT-NW be put at risk for the cost of the project. But FERC said subscriptions were in line with those of other recently approved expansions.

"The portion of the expansion capacity under contract totals 72% for years 1 though 3, 32% for years 4 though 7 and 11% through year 10. PG&ampE GT-NW's market showing here is comparable to market showings determined by the Commission to be sufficient in recent cases," FERC said. "In addition projected revenues from the project will recover the costs of the facilities on a long-term basis." As a result, the Commission decided placing the pipeline company at risk for the costs of the expansion was not warranted.

PG&ampE GT-NW plans to charge new shippers the general system rate for service under its rate schedule FTS-1, as well as a Competitive Equalization Surcharge (CES). PG&ampE GT-NW said the surcharge is necessary to ensure new shippers pay the same rate as existing shippers, who are paying a surcharge related to a settlement in the company's last rate case.

The pipeline company said the impact of the expansion costs on its annual cost of service and revenues will be insignificant and rolling in the costs will produce a systemwide rate decrease. The Commission agreed to allow the pipeline company to roll in the cost of the expansion in its next rate case.

The CPUC said there was reason to believe the costs were understated because the pipeline company understated the costs of its last expansion project, but the Commission disagreed, saying there was no evidence to support such a claim.

Rocco Canonica

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