FERC has denied a request for rehearing and stay of a July order that, by affirming an administrative law judge (ALJ) ruling, opened the door for Tennessee Gas Pipeline to build an interconnect to the Columbia Gulf Transmission-operated portion of a transportation system along the coast of Louisiana that the two pipelines jointly maintain.

The July order and the latest rehearing order, issued on Nov. 22, stem from a March 2004 complaint filed by El Paso Corp.’s Tennessee, accusing Columbia Gulf of engaging in a “pattern of anticompetitive conduct and practices” by denying its request to construct an interconnect from its Muskrat line to the Columbia Gulf-operated side of the Blue Water Pipeline at Egan, LA [RP04-215-002]. The complaint was set for trial before a presiding ALJ. Columbia Gulf has responded by filing a counter-complaint against Tennessee.

The ALJ in its initial decision rejected Tennessee’s claims of anticompetitive behavior by Columbia Gulf, but found that Tennessee had satisfied the five conditions necessary under FERC’s regulations (the 2000 Panhandle ruling) for obtaining an interconnection. The Federal Energy Regulatory Commission upheld the ALJ’s ruling, and directed Columbia Gulf to allow the construction of the receipt point at Egan by Tennessee “as soon as [is] operationally possible.”

In seeking rehearing, Columbia Gulf argued that new evidence of Tennessee’s alleged anticompetitive conduct, which it submitted in its counter-complaint proceeding against Tennessee, should be considered in this proceeding; the Commission wrongly concluded that the Mobile-Sierra doctrine was not implicated in this case; the Commission lacked the statutory authority to order an interconnection in this case; and that three of the five conditions for obtaining an interconnection were not met. FERC rejected all four of Columbia Gulf’s arguments. FERC also dismissed as “moot” Columbia Gulf’s motion for a stay of the July 25 order.

The Commission granted Columbia Gulf clarification on a single point — that it, not Tennessee, will be operator of the Egan complex.

The two pipelines have coordinated operations and shared capacity on the offshore Blue Water system for more than 30 years, with Columbia Gulf operating the western shore line of the system that terminates at Egan, and Tennessee operating the eastern shore line of the pipe segment that extends to Cocodrie, LA.

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