NGI The Weekly Gas Market Report / NGI All News Access

Attorney Calls for Expanded Certification Process

October 12, 1998
/ Print
| Share More
/ Text Size+

Attorney Calls for Expanded Certification Process

FERC's let-the-market-decide approach for certificating new pipeline projects isn't well suited for all cases, said a leading energy attorney last week. With some projects, it hasn't been "good enough so additional analysis [by FERC] might be required" before a pipeline can win a certificate.

The market-decide approach shouldn't be applied generically, according to Barbara K. Heffernan, a partner in the Washington DC law firm of Schiff, Hardin &amp Waite. FERC sought comments on the subject in its July NOPR on short-term transportation capacity.

A "very necessary corollary" of the market-decide approach is the at-risk provisions. Here, the Commission has to "make sure it really puts them [the pipelines] at risk for any underutilized capacity. Otherwise, you're really not letting the market decide," she said at the seventh annual DOE-NARUC conference.

The at-risk provisions work "quite well" for new stand-alone projects serving new markets, but "the situation gets a lot more complicated" when either an existing pipeline seeks to expand or a new pipeline wants to enter a market that's already being served by other pipelines. "You've got existing customers on the expansion pipeline who might be asked to subsidize...the costs of this new project." The at-risk conditions fall far short of protecting existing shippers especially where a project wants to enter a market already being served, said Heffernan, who represents mostly New England LDCs. "In this situation, I think the Commission has to [exert] a little more scrutiny," meaning that it should look behind the precedent agreements supporting the project.

Susan Parker

©Copyright 1998 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus