This Wednesday’s FERC meeting promises to be a blockbuster. Forone, the Commission has placed the hotly contestedSupplyLink-Independence Pipeline-MarketLink projects on the agenda,essentially thumbing its nose at New Jersey Gov. Christine ToddWhitman’s request for at least a 60-day delay [CP97-319, CP97-315,CP98-540].

And in the spirit of even-handedness, FERC has scheduled ahighly charged issue on the electric side — regional transmissionorganizations (RTOs). The Commission sees RTOs, which would overseethe transmission assets of utilities, as being the “logical nextstep” in restructuring the electric industry. In the notice ofproposed rulemaking issued last May, FERC said it hoped to see RTOsin place and operational nationwide by Dec. 15, 2001 [RM99-2]. RTOscan take the form of non-profit independent system operators,for-profit transmission companies (transcos), or a combination ofthe two.

The FERC meeting also will be notable for what’s missing fromthe agenda: a final rule addressing some of the post-Order 636natural gas issues. The industry had hoped the Commission at leastwould come out with a scaled-down rule dealing with lesscontroversial issues, such as term-differentiated and seasonalratemaking, changes in penalty procedures and increased pipelinereporting requirements. Most agreed the stickier issues involvingdaily capacity auctions and negotiated terms and conditions ofservice should be left for a later day [RM98-10]. It now appearsthe “NOPR issues” will be put off until next year.

If FERC should award certificates for the disputed pipelineprojects into the Northeast, which appears likely (possibly by a3-2 vote), fireworks are certain to erupt after the meeting. Therewas some talk that sponsors would be given clear title to someportions of the project, while contested segments might be heldback. The New Jersey governor has vowed to bring a lawsuit to stopany work on MarketLink, a proposed expansion of TranscontinentalGas Pipe Line’s (Transco) facilities in Pennsylvania and NewJersey. She has urged President Clinton to intercede at FERC on NewJersey’s behalf, but has received no reply yet. Congressionalofficials, such as Rep. William J. Pascrell (D-NJ), have promisedto do whatever is necessary to block MarketLink.

“Now we wait until Wednesday to see what happens,” said JoeWaks, press aide for Pascrell. In the meantime, “we’re marshalingour forces here in New Jersey. We’re coordinating with otherelected officials, the governor, the senators, the other members ofthe New Jersey congressional delegation and local officials, andare plotting our strategy if things don’t go our way,” he noted.

“We’re not putting up the white flag today because it’s listed[on the agenda] for Wednesday. And if they rule against us onWednesday, we’re not going to put up the white flag then. We’regoing to keep fighting.” Waks said Pascrell would probably attendthe Dec. 15 FERC meeting, but he wasn’t sure if other New Jerseyofficials would be there.

If the Commission approves a certificate or certificates forIndependence/Marketlink, the pipelines can begin using eminentdomain to acquire right-of-way. They cannot dig, however, until theCommission issues a final rehearing order on the decision. At thatpoint also, opponents can file suit and/or seek court injunctionsto delay the project.

Also, Texas Eastern Transmission (Tetco) still is clinging toits system alternative under which it proposes to lease turned-backcapacity to Independence and MarketLink customers, thus mooting theneed for the proposed pipelines. The final environmental impactstatement (FEIS) on the SupplyLink-Independence-MarketLink projectsrejected Tetco’s alternative, saying it was based on “speculative”turnback numbers.

But Tetco now contends the quantity of capacity that will beturned back to its system between 2000 and 2004 is greater thaninitially anticipated. It estimates more than 950,000 Dth/d ofturnback capacity will be available, enough to replace the newconstruction of the proposed greenfield Independence line andMarketLink expansion.

If approved, the $678 million Independence Pipeline would runabout 400 miles from Defiance, OH, to the hub in Leidy, PA. Projectsponsors are ANR Pipeline, National Fuel Gas Supply and Transco.From Leidy, Transco — the sole sponsor of MarketLink — proposesto loop about 154 miles of its existing system to carry the gas toPennsylvania, New Jersey and other eastern markets. TheANR-sponsored SupplyLink project, which is associated withIndependence, would entail about 72 miles of looping on ANR’sexisting system between Joliet, IL, and Defiance.

Susan Parker

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