The Federal Energy Regulatory Commission this week denied PublicService Co. of Colorado’s request to stay an order awarding KNWattenberg authorization to construct and acquire facilities forits planned Front Runner pipeline. Some view the request by PublicService, a sponsor of the rival Front Range pipeline, as an attemptto quash pipeline competition in the Front Range section ofColorado.

Public Service, whose pipeline is up and running, said it soughtthe stay because it believes the KN’s Front Runner project raisesthe same jurisdictional issues that are inherent in a hotlydisputed case involving the construction of a lateral in Coloradoby KN Wattenberg.

At issue in the Colorado lateral case is whether FERCoverstepped its bounds when it authorized the construction of theproject. Many parties-including the Tenth Circuit Court ofAppeals-think the Commission did because the lateral met therequirements for being a Hinshaw line exempt from the Natural GasAct (NGA). Earlier this year, the court reversed and remanded theoriginal order to the Commission, which has yet to act.

Meanwhile, Public Service has challenged in court KNWattenberg’s certificate for its Front Runner project on groundsthat it, too, is a Hinshaw line. In light of the Tenth Circuit’sruling in the Colorado lateral case, the Commission asked the courtto remand its certificate order on Front Runner so it can revisitthe jurisdictional issues. The court did so last August. If FERCshould reverse itself on Front Runner, that could be the final nailin the coffin for the project.

In denying the stay, FERC said the two cases were distinct anddid not necessarily raise the same jurisdictional issues. The”facts and circumstances in that [Colorado lateral] case differfrom those faced here,” the order said [CP98-49-004]. Even if theCommission were to ultimately decide on remand that the lateral wasnon-jurisdictional, it “would not necessarily require a findingthat the Front Runner pipeline is also non-jurisdictional.”

KN Wattenberg initially had expected to complete its 108-mileFront Runner project by July of this year, but it was granted anextension until July of 2000. This was not the first delay for theproject. KN initially had expected to build it in 1998. Assumingthe jurisdictional dispute and other problems are worked out, thepipeline would transport natural gas from Colorado’s northernborder, down the eastern edge of the Rocky Mountains to the growingDenver market.

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