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ANR Gets Green Light For Transco Interconnect

ANR Gets Green Light For Transco Interconnect

ANR Pipeline has won a two-year battle at FERC to build a direct interconnect to Transcontinental Gas Pipe Line's mainline facilities in Evangeline Parish, LA - near the site of an active natural gas sales market.

On rehearing, Commission upheld a July 1998 order granting a complaint in which ANR accused Transco of discriminating against it by denying a request to construct minor interconnection facilities that would provide its shippers with direct access to gas sales markets on Transco's system at Evangeline. FERC ordered Transco to permit the construction and operation of the interconnection "as soon as operationally possible."

Specifically, the Coastal Corp. pipeline had been battling to obtain a direct connection to Station 50, which is one of several compressor stations on Transco's mainline serving as pooling points. There, producers and marketers sell gas to LDCs and other buyers who hold firm capacity on Transco for shipment to downstream markets. The gas sale market at Station 50 is said to be a "premium one."

In order to get their gas to Station 50 now, ANR shippers must deliver gas via ANR's existing interconnection on Transco's Central Louisiana Lateral at Eunice, LA, and then purchase interruptible transportation (IT) service on Transco for a distance of about 7.4 miles. So, in effect, ANR shippers currently must pay "stacked rates" for service on ANR's existing interconnect and for service on Transco's IT feeder to reach Station 50.

But the Commission last week found that ANR's request for a direct interconnection at Evangeline was reasonable under three different analyses. "First, the evidence shows that Transco has provided no reasonable justification for denying ANR's request, given Transco's history of granting such requests made by similarly situated parties," the order said [CP98-74]. Six pipelines other than ANR currently have direct interconnections on Transco's mainline in the Gulf region that were established prior to Transco's restructuring under Order 636, and none of the shippers pay an IT rate in order to get gas to Transco's mainline markets, according to the order.

Secondly, evidence suggests the denial of an interconnection for ANR has led to "specific competitive harm to the operations of sales markets on Transco's mainline," the Commission said. That's because buyers at Station 50 have been barred access to the competitively priced gas supplies that ANR's shippers would offer, FERC noted. Lastly, it said the establishment of the Evangeline interconnect for ANR was required under the new five-step interconnection policy for gas pipelines, which FERC unveiled earlier this month.

In upholding the July 1998 decision, the Commission overturned an administrative law judge's (ALJ) initial findings that competition hadn't been adversely harmed at Station 50, and that FERC's prior approval of the IT feeder system provided "appropriate support" for Transco to deny ANR the Evangeline interconnect.

In the final analysis, "we are persuaded by the record in this case that ANR cannot offer a pipeline transportation service reasonably competitive with those provided by Transco and other interstate pipelines, without the Evangeline interconnect, a minor facility consisting of valve access to Transco's mainline," the order said.

Susan Parker

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