FERC on Thursday ordered Transcontinental Gas Pipe Line and affiliate Williams Gas Processing – Gulf Coast Co. (WGP) to show cause why the agency should not reverse an August 2001 ruling that found part of Transco’s pipeline network located onshore and offshore Louisiana to be unregulated gathering and eligible to be spun down to WGP.

The Commission said its decision in Transco, which was upheld by a federal appeals court, “has been called into question” by a subsequent decision in which the agency held that an offshore system owned and operated by Jupiter Energy Corp. provided transmission service that was subject to agency jurisdiction. In a November 2003 order on rehearing of the Jupiter ruling, which was sought jointly by Jupiter, Williams and Transco, FERC noted it learned for the first time that Jupiter’s system was situated upstream of the Transco pipeline facilities that were previously ruled to be non-jurisdictional.

The trio argued at the time that Jupiter’s upstream facilities should be declared exempt gathering since Transco’s downstream pipe facilities were determined by the agency to be gathering. But FERC in the rehearing order said the opposite was the case. “The presence of upstream transmission facilities [Jupiter’s] determines the classification of downstream facilities, not the opposite.”

Based on the developments in the Jupiter case, “it appears that the previous gathering determination for Transco’s downstream facilities was made on the basis of incomplete information,” the latest order said [CP01-368-004, CP01-369]. “Also, there may be other upstream jurisdictional facilities that Transco did not identify” to the Commission when it sought to spin down its facilities to WGP.

It ordered Transco and Williams to show cause within 60 days why the Commission should not rescind its prior gathering determination for the Louisiana onshore and offshore pipeline facilities. It also directed the two companies to name any other previously unidentified jurisdictional transmission facilities that are located upstream of the Transco pipe facilities.

Commissioner Nora M. Brownell dissented from the FERC majority, saying she saw “no need to reopen a determination that was made three years ago and has already been through the judicial process.”

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