Because of a shortfall in the level of in-state pipeline capacity to accommodate natural gas deliveries to southern California, FERC Commissioner Linda Breathitt thinks the Commission should think twice before it approves anymore applications for expanded interstate pipeline capacity to that market.
“Without adequate intrastate take-away capacity, actions on FERC’s part to approve interstate pipeline expansions into California may not have the desired effect of increasing natural gas supplies in the California markets where they are needed. Indeed, uncoordinated interstate pipeline expansions could serve to exacerbate congestion at California delivery points and result in higher prices for consumers,” she said.
Breathitt made the statement in a separate opinion in early July concurring with the Commission’s decision to approve a 150 MMcf/d expansion on the western end of Transwestern Pipeline’s system near the California border [CP00-115]. While several commissioners have cited concern about the disparity between California in-state and interstate pipeline capacity, Breathitt has been the most vocal on the issue.
She believes the level of take-away capacity is an “appropriate factor” to be included in the “public benefits analysis” that the Commission conducts when determining whether to issue a certificate. “I am wary of our ability to fulfill our responsibilities under the Natural Gas Act if we do not take into account the potential for unused facilities, stranded costs and unwarranted disruption of the environment,” Breathitt said.
FERC formally hasn’t taken any steps in this direction, although it concedes there’s a serious shortfall of in-state capacity at the California border. “I’m considering it [the in-state capacity level] in orders. I don’t know that they [the other commissioners] will. I hope that they will,” Breathitt told NGI last week. “Whether or not it would cause us not to issue a certificate, I don’t know that.”
She noted she first raised her concerns about California’s in-state pipeline capacity in the Kern River expansion case this year, but at the time she couldn’t get any “takers” from Chairman Curt Hebert and Commissioner William Massey. Since then, she said Hebert and Massey, as well as new Commissioners Pat Wood and Nora Brownell, have come to “agree this is an important issue.”
Breathitt said she brought up the issue again in the Transwestern expansion order primarily to “get the attention of state regulatory and policymakers” since California’s pipeline infrastructure problems “can only be solved by them.”
While the availability of take-away capacity at Transwestern’s delivery point at Needles, CA, is “undoubtedly limited” now, Breathitt said she supported the pipeline’s proposed expansion because “sufficient” intrastate capacity is expected to be in place by June 1, 2002, when Transwestern’s expansion goes into service (See NGI, July 16).
Nevertheless, she noted, “I remain concerned…about future constraints at Needles in the event of further interstate pipeline expansion at that point.” Without much-needed expansion of California’s pipeline system, Breathitt said she fears that Needles and Wheeler Ridge could become as congested as Topock.
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