Faced with an onslaught of new pipeline projects, FERC this weekis expected to propose a policy statement that some say willestablish a “framework” to help the Commission select a winner whentwo or more projects are destined for the same market [PL99-3]. TheCommission has listed discussion of a policy statement on pipelineconstruction certificates on the agenda for its regular openmeeting Wednesday.

“It’s clear the Commission is in a box so to speak. It’s got tostart to make decisions amongst competing projects” in theNortheast, Midwest and Florida markets, said one FERC observer. “Ithink previously…..the Commission was hoping, for instance withrespect to the Independence and Millennium pipeline projects, thatat some point there would appear to be a clear winner based oncontract demand…..But that hasn’t happened. It looks like FERC isgoing to eventually have to make a decision on these competingprojects,” he noted.

The observer expects FERC to possibly revisit the AshbackerDoctrine, which requires a winner to be selected when there are twoor more competing pipeline projects headed for the same market.”Probably what I suspect they’re going to be doing is askingparties how do you make the selection. Do you do it on least cost?”

That approach would almost always favor incumbent pipelines overnew entrants to the market, thus “excluding any possibility ofcompetition,” he said. The policy statement will be “veryimportant” for pipelines because “it will determine the degree towhich new entrants will have an opportunity to build new grassrootsprojects.”

Susan Parker

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