FERC on Wednesday rejected the Connecticut Attorney General’s bid for review of the agency’s order approving the proposed Connecticut-to-New York Islander East Pipeline project, which seeks to deliver natural gas to the expanding Long Island, NY, market.

At the same time, the Commission denied Attorney General Richard Blumenthal’s plea for a stay of the Islander East project, and dismissed his claims that FERC failed to properly review alternative pipeline projects to serve the market, including Iroquois Gas Transmission’s Eastern Long Island Extension [CP01-384].

Blumenthal asked that the Commission’s Sept. 19 order certificating the Islander East project be stayed until the federal and state administrative process and any associated judicial review of the project were completed. But the Commission said he failed to show “irreparable injury” would likely occur without a stay.

In his November petition, Blumenthal noted there were at least “four active or potential” administrative proceedings underway that affected the pipeline, including a request for a Clean Water Act permit from the Connecticut Department of Environmental Protection (CDEP), an appeal of a coastal consistency denial to the U.S. Department of Commerce, and a future Section 10 and 404 permit proceeding before the U.S. Army Corps of Engineers (ACOE).

Even though the issues are far from resolved, “Islander East has notified the ACOE, and several Connecticut citizens living along the proposed pipeline route, that the company intends to begin land-side construction activity during the spring of 2003,” Blumenthal said then (See Daily GPI, Nov. 26, 2002). “It is premature, at best, for the private utility to commence construction of a project of this nature without all regulatory approvals in place.”

But the FERC order pointed out that this fear was groundless. Islander East “cannot commence construction of the facilities until it receives all necessary federal permits, including federal permits issued by the state [Connecticut] through its delegated authority.”

This was not the first time a Connecticut agency or official had requested that the Islander East pipeline be put on hold. In May 2001, the CDEP urged FERC to defer final action on the pipeline and any other proposed gas pipeline in Long Island Sound until a state task force could complete an investigation into the market demand for such projects.

Last spring, Connecticut Gov. John G. Rowland and the state legislature acted separately to temporarily bar state agencies from approving large-scale gas and electric transmission projects that would cross the Long Island Sound (See Daily GPI, April 15, 2002) . The governor’s executive order put the brakes on state action on energy transmission projects until Jan. 15, 2003, while the task force conducted its probe. The legislature’s more-aggressive measure imposed a 12-month moratorium on agencies.

Despite the state’s objections, FERC moved forward in mid-September and issued the certificate for Islander East, sponsored by Duke Energy Gas Transmission (DEGT) and KeySpan Energy, to carry over 260 MMcf/d and ultimately more than 400 MMcf/d from Connecticut under Long Island Sound to connect with KeySpan’s Long Island line.

It also awarded a certificate for a companion project for an extension (Hubline) and expanded capabilities of DEGT’s Algonquin Gas Transmission in Connecticut to feed into the project, carrying gas from Sable Island in Nova Scotia through the Maritimes & Northeast Pipeline. Islander East would lease the additional 260 MMcf/d of capacity on Algonquin, eliminating the need for 27 miles of new pipeline. Islander East has been targeted for in-service in November 2003.

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