FERC yesterday denied Midcoast Interstate Transmission Inc.’srequest for a limited stay of the orders giving Southern NaturalGas (Sonat) the go-ahead to build an extension of its mainline intonorthern Alabama.

This was the latest in a string of defeats at FERC for Midcoast,which has been battling the construction of the Sonat expansion forabout three years now because it will mean the loss of two of itsbiggest customers-Decatur Utilities and Huntsville Utilities.

“…[A]lthough we recognize that Midcoast has enjoyed its statusas the sole interstate pipeline supplier to the cities ofHuntsville and Decatur for more than 47 years, Midcoast’s wish tomaintain its monopoly of that market cannot be the basis forgranting a stay of construction of Southern’s project,” the FERCorder said [CP96-153-005].

In seeking the stay, Midcoast argued that an endangered habitatof mussels would be jeopardized if the directional drill of theTennessee River required for the Sonat project was unsuccessful. Ifthat should occur, Sonat has indicated its next option will be toopen cut the river. But first, according to FERC, it will berequired to relocate any affected mussels. “Based on theseconsiderations, we believe that the endangered mussels’ location atthe river crossing site does not justify a stay of construction.”

Further, the Commission-once again-agreed that while analternative project proposed by Midcoast for the northern Alabamaregion was “environmentally superior,” this was no reason to denySonat’s request to build its “environmentally acceptable” pipelineproject-provided it complies with certain mitigation measures.

Nor was the Commission persuaded by Midcoast’s argument that,absent a stay, it would be foreclosed permanently from building its”environmentally superior” alternative project even if it wins itscourt appeal of the orders approving the Sonat expansion. By then,Midcoast reasons, Huntsville and Decatur will have gone over toSonat.

The Commission’s action “does not necessarily forever precludesuch a relatively minor expansion of its [Midcoast’s] system, i.e.the installation of additional compression on its system,” theorder said. “As we have discussed in our previous orders, Midcoastwill be able to compete with Southern for any incremental servicerequired by Huntsville and Decatur during the…term.”

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