FERC Refuses to Stay Sonat's Northern Alabama Project
FERC last week denied Midcoast Interstate Transmission's request
for a limited stay of the orders giving Southern Natural Gas
(Sonat) the go-ahead to build an extension of its mainline into
This was the latest in a string of defeats at FERC for Midcoast,
which has been battling the construction of the Sonat expansion for
about three years now because it will mean the loss of two of its
biggest customers - Decatur Utilities and Huntsville Utilities.
"...[A]lthough we recognize that Midcoast has enjoyed its status
as the sole interstate pipeline supplier to the cities of
Huntsville and Decatur for more than 47 years, Midcoast's wish to
maintain its monopoly of that market cannot be the basis for
granting a stay of construction of Southern's project," the FERC
order said [CP96-153-005].
In a separate order, FERC rejected Sonat's tariff sheets that
proposed revisions in interruptible and firm no-notice service on
the pipeline's system post-construction of the northern Alabama
project. The Commission reminded Sonat that it had ordered the
pipeline to confine its modifications - specifically how it defined
the system benefits test in its tariff and the circumstances under
which it would make a contribution in aid of construction (CIAC) -
to firm transportation only [RP99-159].
Potential shippers said they had reservations about Sonat being
permitted to pass through CIAC payments for the construction of
incremental facilities to other customers on its system. Under
CIAC, Sonat proposes to assume part of the costs for facilities
that a shipper would build on its own at or near receipt or
delivery points on the pipeline's expansion. The Commission agreed
that CIAC costs should not be automatically passed through. "The
inclusion of the CIAC...will be subject to scrutiny in a rate case
in the same manner as any other cost," the order said. FERC plans
to hold a technical conference on the CIAC proposal.
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