FERC Friday denied Florida Gas Transmission’s (FGT) request for a three-year delay in abandoning existing pipeline facilities while it seeks to resolve a dispute over relocation costs with the Florida Department of Transportation (DOT). It further chided the pipeline for attempting to use the FERC process to bypass the state courts.

In May 2006, the Federal Energy Regulatory Commission (FERC) granted FGT authorization to abandon a portion of its East Leg mainline system in Broward County, FL, and to build a replacement 36-inch diameter pipeline to accommodate a widening project of State Road 91 by the Florida DOT. In May of this year, however, FGT sought FERC approval to delay, for a period of up to 36 months, the abandoning of the East Leg facilities until the conflict related to DOT’s planned highway construction is resolved.

FGT has completed construction of its new replacement pipeline and placed it in service. But it not says that uncertainty regarding easement claims may require the relocation of the newly constructed line. As a result, FGT said it must keep the portion of the East Leg facilities — 18-inch and 24-inch pipelines — in operation to provide ongoing service.

“Florida DOT states that a resolution of the…easement issues would not require relocation of the 36-inch diameter pipeline and that the objective of Florida Gas’ amendment application is to delay the highway projects in order to gain leverage against Florida DOT with respect to state court litigation regarding Florida Gas’ claim against Florida DOT for reimbursement of the pipeline relocation costs,” the order said [CP06-9]. FGT estimates the abandonment and relocation costs at $110.24 million.

Granting FGT’s request to maintain its 18- and 24-inch pipeline facilities for up to three more years “would create a shield against Florida DOT’s efforts to force Florida Gas to undertake depressurization and other steps to ensure that State Road 91 can be safely widened, potentially giving Florida Gas leverage in its pending state court proceedings against Florida DOT for reimbursement of the pipeline relocation costs,” the FERC order said.

“While the Commission’s May 3 order anticipated that Florida Gas would seek to recover relocation costs from Florida DOT, delaying the abandonment of the 18- and 24-inch diameter lines in an attempt to delay or circumvent state court resolution of the cost recovery issue would be an inappropriate use of Commission process,” it noted.

“So that the Commission can ensure that Florida Gas is not unnecessarily delaying undertaking the necessary actions to abandon these facilities, we will require that Florida Gas submit biweekly status reports until the abandonment has been completed.”

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