As a group of protesters from Mount Vernon, NY, and several Millennium Pipeline Co. LP executives anxiously looked on last Wednesday, FERC voted out a “compromise” interim order that awarded conditional approval to Millennium to build all but the last two miles of the U.S. leg of the pipeline that would run through the city of Mount Vernon.

The Commission gave elected officials from Mount Vernon, the town’s residents and Millennium’s sponsors 60 days in which to “reach a compromise on a small, but highly urbanized routing” for the last two miles of the pipeline, which would interconnect with Consolidated Edison Co. of New York’s high-pressure line in the area. After the end of the period, FERC said it would then issue a final order to authorize the construction of the pipeline, and the specific route to the termination point (CP98-150). If the two sides are unable to reach a settlement, the Commission said it will decide the route through Mount Vernon.

There was a “tremendous amount of behind-the-scene negotiations” on the Millennium certificate at FERC in the two days leading up to last Wednesday’s meeting, said a knowledgeable source.

Regardless of what happens on the Mount Vernon routing issue, FERC last week indicated its support for the U.S. segment of the Millennium project that would extend from Lake Erie to New York State. It would bring both U.S. and Canadian gas to the metropolitan New York City area and other growth markets in the Northeast.

If Millennium and Mount Vernon should ultimately decide on a route that is a major variation from the one already on the table, FERC could be required to conduct a supplemental review of the new route in compliance with the National Environmental Policy Act, which would drag out the process even further. The Millennium pipeline project has been pending at the Commission for four years.

Although only a very small part of Millennium’s proposed 425-mile pipeline, the two-mile stretch through Mount Vernon is critical, given that shippers have designated delivery points in Mount Vernon for approximately half of the contracted-for capacity — 230,000 Dth/d. However, elected officials and residents in Mount Vernon are opposed to the Millennium-favored route through their city because, as one source told NGI, “basically the pipeline would be running down their Main Street.”

But routing isn’t Millennium’s only problem. FERC last week said construction on the U.S. leg of Millennium can’t begin until the National Energy Board issues all the necessary approvals for the Canadian portion. That may be a little difficult, given that Canadian sponsors TransCanada PipeLines Ltd. and St. Clair Pipeline Ltd. withdrew their applications last August due to continued regulatory delays on the U.S. side (See NGI, Aug. 27). In addition, Millennium must meet New York State’s coastal zone consistency requirements, as well as address certain concerns with an aqueduct in the state, before construction on the pipeline can begin.

Nevertheless, “this pipeline is needed for the common good,” said Commissioner William Massey. “We’re eight-ninths of the way there,” noted Chairman Pat Wood.

“We believe that the benefits of the Millennium’s proposed project are clear and significant. Millennium has entered into firm, long-term, binding precedent agreements for two-thirds of the pipeline’s capacity” of 700 MMcf/d, the order said. “In addition, general market demand projections in the region lend support to the need for this project.”

Moreover, the New York Public Service Commission has repeatedly asked FERC to speed up the approval process because of the need for additional gas supplies for power generation and others in the state, the agency noted last week.

The group of Mount Vernon protesters, who traveled to Washington by bus, also met with Rep. Nita Lowey (D-NY) on Capitol Hill to discuss the pipeline project. Other lawmakers who have weighed in heavily at FERC on behalf of Mount Vernon include New York Sens. Hillary Rodham Clinton and Charles Schumer.

The Millennium pipeline would bring about 700 MMcf/d of natural gas from Canada under Lake Erie to the New York metropolitan area. The proposed 425-mile pipeline is sponsored by Columbia Gas Transmission, TransCanada PipeLines, Westcoast Energy (St. Clair affiliate) and MCN Energy Group.

Meanwhile, FERC struck Independence Pipeline from the meeting’s agenda last Wednesday. Some Capitol Hill legislators and landowners have asked the Commission to withdraw its final certificate for Independence in light of the pipeline’s inability to show market support for its capacity.

Independence would run about 442 miles from Defiance, OH, to the hub in Leidy, PA. Project sponsors are ANR Pipeline, National Fuel and Transcontinental Gas Pipe Line.

©Copyright 2001 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.