ALJ Backs Transco's Refusal Of Interconnect to ANR
A FERC administrative law judge (ALJ) has agreed
Transcontinental Gas Pipe Line was well within its rights when it
denied ANR Pipeline an additional interconnection to its mainline
system in Louisiana, saying that Transco's action did not
discriminate, violate antitrust principles or cause ANR to lose
In his initial decision, Presiding ALJ David I. Harfeld found
that Transco had refused similar requests by other pipelines in the
past based on a "pre-existing" policy, which barred construction
for any party of a second interconnect on a Transco supply lateral
that would feed the same pooling point as an existing interconnect.
ANR is seeking an additional 300 MMcf/d interconnect at Evangeline
Parish, LA, so that shippers can avoid Transco's IT feeder charge
at its existing interconnect with Transco near Eunice, LA
Harfeld's ruling was in contrast to the Commission's decision
last July ordering Transco to build the interconnect for ANR. FERC
later stayed the order and directed the ALJ to hold hearings on two
specific issues in the case. Interestingly, the Commission didn't
ask Harfeld to address whether ANR ought to be granted the
interconnect, but the ALJ said he felt "behoove[d]" to do so
The case has captured the interest of some in the gas industry
because it puts squarely before the Commission the issue of its
interconnection policy under the Natural Gas Act (NGA), which
requires pipelines to provide mandatory interconnects to LDCs only.
The ANR-Transco case, some observers say, poses the question of
whether the policy should be expanded.
"The reason why this one's particularly critical is because the
whole issue of pipeline interconnects ultimately will determine how
competitive this industry's going to get," commented a producer
source. The issue of whether FERC has the authority to order
interconnects for parties other than LDCs was not before Harfeld,
but Transco has raised it on rehearing.
When the case comes up again, FERC may decide it has "no
latitude" to make any changes to its interconnect policy under the
NGA. "But if they decide to go the other way, it will be very
interesting," the producer source said. It conceivably could set a
precedent that would "stretch the boundaries" of the NGA.
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