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Transco Official Blasts FERC's PD Decision

Transco Official Blasts FERC's PD Decision

In a terse letter to FERC recently, Cuba Wadlington Jr., Transcontinental Gas Pipe Line's senior vice president and general manager, became the first pipeline representative to formally criticize the Commission's recent departure from its long-standing policy of issuing preliminary determinations on pipeline expansion applications.

Wadlington said Transco officials were disappointed about the decision, which affects their MarketLink project, the proposed Independence Pipeline - in which Transco is a partner - the upstream ANR-sponsored SupplyLink project and the competing Millennium Pipeline project.

In a 3-2 vote at its March 10 meeting, FERC broke with the decade-old procedure in its review of the four controversial pipeline projects intended to carry Canadian gas from the U.S. Midwest to the northeastern gas market. It deferred action on the fate of the projects until all of the environmental reviews are completed because of the wide range of issues and concerns they raised - specifically, the unparalleled level of landowner opposition, questions about market "need" and "significant and difficult" environmental concerns.

But Wadlington told the Commission its decision "substantially increases the business risks on the pipeline sponsors as they continue to make significant financial and contractual commitments necessary to maintain the Nov. 1, 2000 in-service dates without the benefit of regulatory guidance on the fundamental business proposals." Wadlington said in light of these increased business risks "it is imperative" that the Commission hand down a decision by September as promised.

He added the projects were planned based on well-established regulatory practices and should not now be delayed while the Commission considers changing those practices.

In the meantime, however, the Commission's action appears to have had little impact on the demand for MarketLink's capacity or the ability of Transco parent Williams to continue marketing the proposed project. Williams announced last week it signed up another major customer. Sunset Energy Fleet LLC signed a 15-year agreement for 95,600 Dth/d of firm capacity on the pipeline to supply a 520 MW power generation plant in New York City.

MarketLink is a $528 million expansion of Transco's pipeline system from the Leidy Hub in western Pennsylvania to New York City. The project would add 700,000 Dth/d of capacity.

Rocco Canonica

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