The Federal Energy Regulatory Commission has defended its decision to reject a requirement by Transcontinental Gas Pipe Line that converting firm transportation (FT) customers must take and pay for service on production area supply laterals. FERC’s order on (its second) remand Wednesday (RP92-137-052) explained to a court that the decision was not inconsistent with other orders regarding Transco.

The case involved an attempt by Transco to force former sales customers, converting in 1991 to FT service, to sign on for service on the supply laterals (firm to the wellhead [FTW] service). The Commission denied the tariff change, saying this would improperly require the FT conversion customers to contract for additional service not included in their existing service agreements.

The Court of Appeals for the District of Columbia Circuit remanded the decision, saying FERC had failed to reconcile its decision in this case with decisions in other cases regarding Transco proposals to change how it provides service on its production area laterals.

FERC restated its previous decision, explaining to the court that while its policy holds that changes in primary rights entail an impermissible contract change, changes in secondary point rights are considered simply a tariff change, which does not affect service contracts.

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