To Eliminate Stanfield Bottleneck

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

The project is designed to relieve a transportation bottleneckat Stanfield, where PG&ampE GT-NW has a major interconnect withNorthwest Pipeline. Currently PG&ampE GT-NW has underutilizedcapacity from Stanfield south to Malin, OR, primarily becausecapacity north of Stanfield to Canadian supply sources isconstrained.

PG&ampE GT-NW proposes to add a total of 9,700 hp of compressionat four stations on its system. The pipeline company signedagreements for a total of 38,392 Dth/d of year-round capacity and20,000 Dth/d of winter-only service with four shippers: AvistaEnergy (20,000 Dth/d Kingsgate to Malin winter only service for 15years), Duke Energy (5,000 Dth/d Kingsgate to Malin three years and10,000 Dth/d Kingsgate to Stanfield three years), Montana PowerTrading (10,000 Dth/d from Kingsgate to Malin for three years) andPoco Marketing (13,392 Dth/d from Kingsgate to Stanfield for sevenyears).

The California Public Utility Commission, DEK Energy andPanCanadian charged that the pipeline did not sign up sufficientdemand to justify the expansion, and PanCanadian requested PG&ampEGT-NW be put at risk for the cost of the project. But FERC saidsubscriptions were in line with those of other recently approvedexpansions.

“The portion of the expansion capacity under contract totals 72%for years 1 though 3, 32% for years 4 though 7 and 11% through year10. PG&ampE GT-NW’s market showing here is comparable to marketshowings determined by the Commission to be sufficient in recentcases,” FERC said. “In addition projected revenues from the projectwill recover the costs of the facilities on a long-term basis.” Asa result, the Commission decided placing the pipeline company atrisk for the costs of the expansion was not warranted.

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

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

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

Rocco Canonica

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