ANR Suing WI PSC for Part in Guardian Deliberations
ANR Pipeline, charging Wisconsin Public Service Commission filings by
Wisconsin Gas for the Guardian Pipeline project were unlawfully kept secret,
is suing the PSC in Dane County, WI, Circuit Court. ANR wants the court
to reverse and set aside PSC orders conditionally approving Guardian. ANR
seeks remanding of the case and the opportunity to intervene in a contested
Guardian would be a 147-mile interstate from the Chicago hub to Watertown,
WI. Wisconsin Gas is proposing a 35-mile lateral to connect its system
to Guardian in the Milwaukee area. The pipeline, which would compete against
ANR, is expected to cost $230 million and the lateral $45 million. Wisconsin
Gas would own 30% of the pipeline and 100% of the lateral. Guardian owned
by Wisconsin Gas parent WICOR, CMS Energy, and Viking Gas Transmission
The LDC has executed a precedent agreement with Guardian for 650 MMcf/d
of firm capacity that would displace capacity held by Wisconsin Gas on
ANR. ANR maintains it can more cheaply build any new capacity needed to
meet the needs of Wisconsin Gas and others in Wisconsin.
ANR says the cost of the redundant Guardian and the lateral would be
unfairly borne by ratepayers, to the tune of $175 million over 10 years.
Wisconsin Gas says the project would save ratepayers $100 million over
its first 10 years. ANR says the project would result in "significant,
unnecessary environmental disturbances and landowner disruption."
The PSC refused to allow ANR to participate in Guardian proceedings,
denied ANR access to documents and secretly conditionally approved the
precedent agreement "based on self-serving conclusory statements by
WGC concerning the benefits of the Guardian Project," the pipeline
Wisconsin Gas' response to the suit is somewhat akin to "what's
sauce for the goose is sauce for the gander."
"First of all, the supply contract that Wisconsin Gas filed with
the PSC is confidential, and information in it could aid a competitor,"
said Wisconsin Gas spokesman David Fantle. "Other ANR customers filed
these confidential agreements with the PSC, and in those cases ANR did
not complain because the process benefits their business interests.
"Shame on ANR. They filed the same kind of supply contracts with
the PSC, and they should understand the confidential nature of these type
of filings. We believe the PSC followed all the appropriate procedures
when reviewing the Wisconsin Gas filing. The time for a full public review
of the project will come when Wisconsin Gas files an application for its
lateral project with the PSC in the fall of this year. This is just another
stall and delay tactic from ANR because their monopoly status is in jeopardy
and Guardian represents lower prices and true competition."
ANR's suit also seeks to have entered into the Guardian case record
a report titled "The Proposed Guardian Pipeline For Wisconsin,"
by business professor and former Wisconsin PSC Chairman Charles Cicchetti,
who was hired by ANR (See NGI July 19, 1999).
Cicchetti concluded Guardian would be costly and inefficient because
it would be sponsored by regulated monopoly Wisconsin Gas. "An inefficient
new pipeline can only be profitable if it has an affiliate that contracts
for service and can pass on to its customers the extra cost," the
Cicchetti report says. "A new high-cost pipeline that self-deals with
a regulated affiliate can increase its profits so long as regulators allow
the regulated monopolist affiliate to pass the excessive pipeline transportation
costs through to its captive customers. Additionally, this self-dealing
is masking the second problem related to unneeded capacity that the Guardian
Pipeline would add."
Joe Fisher, Houston