Peoples Energy Eyes Alternative Project to Wisconsin
Peoples Energy Chairman Richard E. Terry indicated last week his
company was talking with potential partners about building an
alternative pipeline project that would extend from the Chicago hub
to serve the southern Wisconsin market.
"Basically at this point we're talking with Northern Border
[Pipeline] and others," he told NGI, adding that "we really haven't
identified publicly the other partners." He provided scant
specifics about the project, explaining that it was still in the
"planning stage." A spokeswoman for Northern Border, an Enron
pipeline, confirmed it has discussed a possible project with
Peoples Energy, but added it wasn't clearly "identified" at this
Such a project, if realized, would be a "modification and
alternative" to the 650 MMcf/d Illinois-Wisconsin Express Project,
which has been placed on temporary hold, Terry said. While the fate
of the project hangs in the balance, the sponsors of the Express
Project - Peoples Energy, Northern Border, El Paso and Enron - are
allowed to pursue other opportunities in the Wisconsin market on
their own. And that is what Peoples Energy and Northern Border
appear to be doing with this latest project. El Paso said it was
The Express Project, if it gets moving again, proposes to
provide takeaway capacity from the Chicago hub to a point west of
Milwaukee, WI. With the alternative project, "we would be basically
building a pipe probably off the Northern Border system" to a
termination point still yet "undefined" in southern Wisconsin.
"That's what we're reconsidering. Where we want to terminate would
depend on who all would be customers etc."
Peoples Energy's alternative project would be the third attempt
- behind the failed 1 Bcf/d Voyageur Pipeline project and the
on-hold Express Project - by a company or coalition of companies to
build a pipeline from northern Illinois to southern Wisconsin to
compete with the existing ANR Pipeline, which has a lock on
transportation along that route. Reportedly neither Voyageur nor
the Express Project were attractive enough options to entice LDC
customers to commit to long-term capacity contracts.
Separately, Terry said FERC at its scheduled conference on
retail unbundling in February should send a strong message that
unbundling is a state matter. "...I think it's really a state
issue, and it has to be decided state by state. Different states
are in different circumstances. The LDCs are in different positions
in different states...So for the FERC to try to do something [in a]
cookie-cutter approach across the country, I think, is wrong," he
said at a luncheon sponsored by the American Gas Association in
Washington D.C. Terry will be AGA's chairman in 1999.
He also thinks that the Commission's mega-notice of proposed
rulemaking, which calls for the auctioning of short-term capacity,
could be a roadblock to unbundling. "It could be a problem in some
states," Terry told reporters. "I don't see it as a benefit...in a
company like ourselves where we can basically go out and negotiate
our own deals."
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