FERC has issued a certificate for Guardian Pipeline to expand its system to meet growing demand for natural gas in eastern Wisconsin, which currently is served by only the constrained ANR Pipeline.
The Guardian G-II expansion consists of 119.2 miles of 12-inch and 30-inch diameter pipeline extending from Ixonia, WI, to Green Bay, WI, and 78,000 hp of compression and associated facilities. The $261 million project would result in an incremental 537,200 Dth/d of firm capacity on Guardian’s existing G-1 system from Joliet, IL, to Ixonia, and 437,200 Dth/d of new firm capacity from Ixonia to Green Bay. Guardian seeks to begin construction in March 2008 and place the facilities in service on Nov. 1, 2008.
“We find Guardian has demonstrated a need for its proposed G-II expansion project by submitting precedent agreements for long-term, firm service for 497,006 Dth/d, representing the entire capacity of the proposed expansion’s facilities north of Milwaukee and approximately 93% of the 537,200 Dth/d of incremental capacity the expansion will make available from Joliet, IL, to Ixonia, WI,” the Federal Energy Regulatory Commission (FERC) order said [CP07-8].
Guardian, which is owned by ONEOK Partners LP, has executed precedent agreements with three local distribution companies for an initial term of 15 years, including Wisconsin Gas LLC for 90,105 Dth/d, Wisconsin Electric Power Co. for 201,656 Dth/d and Wisconsin Public Service Corp. for 205,2455 Dth/d, according to the order.
Natural gas consumption in Wisconsin has increased by more than 25% to nearly 400 Bcf annually since 1990; the number of commercial and industrial gas customers rose by approximately 40% between 1990 and 2004; and the combined gas use of commercial and industrial sectors, excluding electric generation, increased by more than 18% between 1990 and 2004, Guardian said.
ANR Pipeline, the sole competing pipeline with Guardian in the Wisconsin market, asked FERC to consider whether the gas transported on Guardian’s proposed expansion would displace volumes that would otherwise flow through ANR’s existing facilities. “We find nothing in the record to imply that this will be the case,” the Commission said.
“ANR makes no showing that the expansion shippers that have entered into precedent agreements with Guardian have done so in anticipation of ceasing service currently provided by ANR. In view of this, we concluded that Guardian’s proposed G-II expansion will meet a currently unfulfilled need for additional transportation capacity in a market area that is now served exclusively by ANR.”
Guardian sought rolled-in rate treatment for costs associated with the operation of its proposed electric-power compression facilities, but FERC declined to rule on the merits of the pipeline’s request as part of the certificate proceeding. Instead, it directed Guardian to request this in its next Section 4 rate proceeding.
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