In denying a natural gas producer’s plea for FERC to reassert jurisdiction over a network of gathering facilities in the Appalachian region, the Commission ruled last week the Virginia-based company failed to show that Columbia Gas Transmission Corp. and its gathering affiliate, Columbia Natural Resources Inc. (CNR), had acted “in concert” to manipulate gathering rates and thwart competitive transportation service.

FERC dismissed a complaint brought by Energy Development Corp. (EDC) that alleged anti-competitive action was occurring on the unregulated V-33 gathering system in West Virginia and Virginia, which Columbia Gas Transmission spun down to CNR in April 1997, and on a connecting intrastate pipeline, Cranberry Pipeline Corp., an affiliate of Cabot Oil and Gas Corp. The V-33 facilities had been a regulated pipeline for several decades, but were reclassified by FERC as unregulated gathering five years ago.

“While the record reflects that there may have been some miscommunication between CNR and EDC regarding the respective obligations of the parties in arranging transportation of EDC’s gas, this does not rise to the level of the concerted action required for the Commission to reassert jurisdiction over CNR in its operation of the V-33 system,” said the agency order, which was issued last Wednesday [RP03-163].

Admittedly, “EDC may have been harmed by the confusion regarding the need to arrange for downstream transportation on Cranberry,” but the producer “fails to provide any credible basis for its charge that CNR and Columbia acted jointly to deprive it of capacity that was otherwise available on the V-33 system, or that CNR and Columbia sought to injure it by misleading EDC about the availability of downstream transportation on Cranberry.”

Moreover, the producer failed to show that the rates and charges that CNR offered to EDC were any different from those offered to other shippers, that CNR acted with Cranberry to shut in EDC’s wells, or that Columbia was a party to or benefited from actions that were taken by affiliate CNR, the order said.

EDC’s request for FERC to reassert authority over gathering was not without precedent. In September 2002, FERC reasserted jurisdiction over the portion of the North Padre Island (NPI) unregulated gathering facilities that Transcontinental Gas Pipe Line had spun down to its gathering affiliate, Williams Field Services Co. (WFS). The Commission took this action after finding Transco and WFS “acted in concert” to push gathering rates to monopolistic levels on the NPI offshore Texas facilities in such a way that frustrated effective FERC regulation of Transco’s interstate transportation system (see NGI, Sept. 9, 2002).

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