The Federal Energy Regulatory Commission’s authority formandatory pipeline bypass of a distribution company is up for grabsagain as a result of an Eleventh Circuit court decision lastThursday in the long-running Arcadian case (Atlanta Gas Light et alv. FERC 92-9121).

While the court upheld the final settlement approved by FERC in1994 to 1996 decisions in which the parties agreed to a directconnection of the Arcadian fertilizer plant with Southern NaturalGas, bypassing Atlanta Gas Light, it vacated an earlier action thatled up to that settlement. The three-judge panel vacated 1991 and1992 orders by FERC in which it used its Section 5 powers to orderthe bypass by an unwilling pipeline. In its latest decision,however, the Eleventh Circuit carried out King Solomon’s threat andsplit the baby. It did not say whether the Commission did or didnot have the power to mandate bypass. It simply said the orderswere not timely.

The American Gas Association, which had joined AGL in appealingthe case arguing that FERC had no authority to mandate bypass, andproducers who supported the Commission mandate, each got about halfof what they wanted and can contest the issue another day. Thereare at least two other mandatory bypass cases currently makingtheir way through the Commission. One legal expert also pointed outthe commission has relied on the mandatory authority to underpinits electric restructuring rules.

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