Guardian Pipeline filed with the FERC for a certificate toconstruct, own and operate its proposed 149-mile pipeline. Thepartnership is made up of three midwestern energy companies-CMSEnergy of Dearborn, MI; WICOR of Milwaukee, WI; and Viking Gas, awholly owned subsidiary of Northern States Power Co. of St. Paul,MN.

“The filing with the FERC brings the project one-step closer tocompletion,” said George Hass, Guardian project manager. “Thefiling brings the region also one step closer to lower natural gascosts that will result from competition and upstream choice fortransportation, storage and related services. Guardian will alsoprovide additional capacity to meet substantial projected futuregrowth needs and bring pipeline competition to one of the lastpockets of the country that does not enjoy the benefits of a robustcompetitive natural gas market.”

Several factors contribute to the increase in demand for gas,including the growth in the use of gas for power generation, thecontinued economic expansion in Wisconsin and Illinois andincreased use of gas for space heating.

In September a host of Wisconsin businesses, labor unions and stateand local government officials rallied behind Guardian as their last,best hop of creating gas competition in the state (see Daily GPI, Sept. 8). To date, ANR is the only companysupplying gas to Wisconsin. In October ANR placed Phase I of itscurrent expansion efforts – 11.8 miles of looping line creating anadditional 190 MMcf/d of capacity – into service. That additionalcapacity cost about $24 million. Phase II is planned for in-service inNovember. “We have already received a favorable environmentalassessment from the FERC staff and have not yet heard on thecertificate yet” said spokesman Joe Martucci. “That projectprincipally involves adding horsepower at existing compressionstations and just three miles of loop line.” Phase II is projected tocost about $37.5 million.

“Guardian, as we’ve said all along, is redundant capacity,”Martucci said. “It’s basically trying to duplicate a portion of theANR system that’s been there for many years to serve a part of thesame market we already serve and at higher cost.”

In a related development, Wisconsin Gas, a WICOR company, filedan application with the Public Service Commission of Wisconsin(PSCW) for a certificate to construct, own and operate a 35-milelateral to run from Ixonia east to connect Guardian to its existingdistribution facilities in Germantown and Brookfield, WI.

Guardian will transport gas from interconnections with Alliance,Northern Border, Midwestern Gas Transmission, and Natural GasPipeline of America at the Chicago hub near Joliet, IL, to northernIllinois and southern Wisconsin markets. The project will consistof about 25,000 horsepower of compression and 140 miles of 36-inchpipe extending from Joliet to the Ixonia area, with an additional8.5 miles of 16-inch lateral pipe extending from the main Guardianline to Eagle, WI.

Guardian’s proposed in-service date is Nov. 1, 2002. It’s FERCapplication asserts targeted markets “…want and need additionalpipeline capacity to meet growth in traditional gas markets andgrowth in gas-fired electric generation. These markets also wantand need an alternative interstate pipeline to provide customerchoice and competition.”

The filing leaves no question that Guardian is a direct attackon the ANR franchise. As customer contracts with their existingpipeline (ANR) expire… “and as the market grows, Guardian’spresence will mean that captive customers of the existing pipelinewill no longer have to be captive. Even customers that do not electto contract with Guardian at this time will benefit.”

Project backers assert they pass the Commission’s “no subsidies”threshold as Guardian would bear all capital and operating cost andvolume risk for its project. “To date, Guardian has executedbinding precedent agreements with four (4) shippers for 702,500 Dthper day of firm transportation service.”

Guardian also is promising its project will offer shippersgreater flexibility than other alternatives. “For example, as anadded benefit… all of Guardian’s Rate Schedule FT-1 shippersreceive Guardian’s Limited Notice service as part of their standardfirm transportation service. This feature will provide Guardian’sfirm shippers with additional flexibility — the ability to changenominations at a designated receipt point upon one hour’s noticethroughout the gas day. Another enhanced service Guardian offersshippers is the right to change primary receipt and primarydelivery points on two days notice.”

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