Midcoast Interstate Transmission’s efforts to continue itsmonopoly control of the pipeline transportation market in northernAlabama fell by the wayside last week when FERC rejected its twocontroversial project proposals citing disinterest on the part ofshippers.

In the first proposal, Midcoast, formerly Alabama-TennesseeNatural Gas, sought authority to build and operate two compressorunits and associated facilities in northern Alabama to compete withSouthern Natural Gas Co.’s proposed pipeline extension into thatarea. As a second option, it proposed the so-called HartselleAlternative, which called for Sonat and Midcoast to combine theirtwo projects-Sonat would build the first 98 miles of its northernAlabama extension, and the final leg would be built by Midcoast (aneight-mile line) to its existing Hartselle Lateral. A key problemwith the latter was that Sonat was an unwilling partner.

Both projects were last-ditch efforts by Midcoast to keep itstwo biggest customers, Huntsville Utilities of Huntsville, AL, andDecatur Utilities of Decatur, AL. The two customers, whichaccounted for almost half of Midcoast’s system load, opposed theprojects, and instead favored the Sonat extension because it wouldprovide competition into their region for the first time.

In the initial project, the Commission chose to dismiss theapplication rather than put Midcoast at risk for the unsubscribedcapacity. “We feel this is the most appropriate course of actionunder the circumstances of this case since the intended shippershave protested the proposal, and state their firm commitment totheir contracts with Southern for capacity on its North AlabamaPipeline Project facilities,” the order said [CP97-343]. FERC notedMidcoast could refile its application when it could show evidenceof executed contracts or precedent agreements.

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