NGI The Weekly Gas Market Report
If the new route variation that Millennium Pipeline Co. L.P. hasproposed for its facilities in Westchester, NY, were a Broadwayshow, it probably would open and close on the same night, criticscontend.
Although it’s an improvement over the original one, the proposednew route still doesn’t eliminate the “troublesome risk” to thereliability of New York’s electric system that would be posed bythe gas pipeline sharing Consolidated Edison’s right-of-way (ROW),according to the New York State Reliability Council (NYSRC) and ConEdison.
Con Edison suggested that Millennium forego its proposedWestchester facilities altogether, and instead consider using thefacilities of Iroquois Gas Transmission System. “By relying onanother pipeline for downstream transportation, Millennium couldaccess the New York City market, while avoiding approximately $77.5million of construction costs associated with the proposed HudsonRiver crossing and pipeline facilities in Westchester County.” EvenFERC staff has raised the possibility that Iroquois’ EastchesterExpansion Project may be a workable alternative to Millennium’sproject in Westchester County.
On the plus side, Con Edison conceded that Millennium’s proposedroute alternative “would reduce…..the length of co-location ofgas and electric facilities along [Con Edison’s] right-of-way,” andit would establish “mitigation measures for designated areas wherethe gas pipeline crosses or runs within 1,500 feet of [ConEdison’s] electric transmission lines.” However, it still presents”troublesome and seemingly avoidable” risks to Con Edison’sfacilities that serve the electric loads of New York City andWestchester County, the utility noted. Likewise, the NYSRC said ithad “continuing concerns” with Millennium sharing Con Edison’s ROW.
In contrast, Chairman Frank Murkowski (R-AK) of the SenateEnergy and Natural Resources Committee has urged FERC to quicklyissue a final environmental review on the project, which he saidwill bring “significant new supplies of competitively pricednatural gas to the Northeast.” Rep. Benjamin A. Gilman (R-NY),whose district includes Westchester, also asked for expeditedconsideration of Millennium, which is sponsored by Columbia GasTransmission, MCN Energy Group and TransCanada PipeLines Ltd. Bothlawmakers made their pleas to FERC before Millennium filed itsproposed route variation in late June.
Even with its proposed route changes, Millennium pipelineproject “would cross Con Edison’s right-of-way six times and wouldrun adjacent to or within as little as 100 feet from theright-of-way for two to three miles…..Approximately half of theoverall length of the proposed [route] alternative would be locatedwithin 1,500 feet of the electric right-of-way,” according to ConEdison. “Millennium provides less than full assurance that [its]alternative would eliminate the electric reliability concerns”raised by its sharing Con Edison’s ROW.
If Millennium were to be sited along Con Edison’s ROW and therewas a major explosion involving the pipeline, several substationsserving electricity to large parts of Westchester County and NewYork City would be damaged and would create major blackouts, warnedthe NYSRC, which added that it could take many days to restorepower “depending upon the severity of the physical damage sustainedby the facilities.” Moreover, it said gas deliveries for generationin New York City may be interrupted also.
There’s another reason Con Edison isn’t eager to jump on theMillennium bandwagon. The combination utility said it would have toexpand its distribution system significantly to accept the 350,000Dth/d that Millennium proposes to deliver to an interconnectionwith Con Edison in Mount Vernon, NY. Con Edison noted it isn’tabout to shell out $50-$100 million for an expansion without anycommitments from customers. So far, “no party has committed to useand pay for Con Edison’s reinforcement facilities, and Con Edisonis not prepared to build reinforcements for the Millennium projecton speculation.”
Millennium has said it would assume the risk of relying on ConEdison for takeaway capacity and service to consumers in theutility’s service territory, Con Edison said. Con Ed wasn’tconvinced and said, in addition, Millennium hasn’t demonstratedthat the future of its pipeline project depends on supplying”substantial” firm deliveries of gas in Westchester County. Iturged FERC to consider the Iroquois expansion alternative.
Iroquois said Millennium dismissed its Eastchester ExpansionProject as a partial alternative on the grounds that it wouldn’t beable to serve International Business Machines Inc. (IBM) inYorktown, NY, and other customers in Westchester County, andwouldn’t be in service by the fall of 2001.
According to Millennium’s most recent list of potentialshippers, IBM has executed a precedent agreement for only 1,000Dth/d of firm transportation capacity, which represents less than0.2% of the proposed pipeline’s throughput, Iroquois noted. It alsohas executed agreements with North East Heat & Light Co. (asmall LDC in northwest Pennsylvania) for 7,500 Dth/d; and withmarketing companies that have no specified end-user markets.
“No other customers in Westchester County are identified; itappears that approximately half of Millennium’s throughput isproposed to be delivered to Consolidated Edison at the proposedMount Vernon delivery point, which is less than two miles fromIroquois’ proposed delivery point to Consolidated Edison,” saidIroquois.
Moreover, Iroquois argued Millennium hasn’t demonstrated that itmust have its facilities in service by Nov. 1, 2001. Iroquois saida study it submitted along with its Eastchester Expansionapplication revealed the bulk of the gas demand for generationfacilities in New York City will not occur until a year later -Nov. 1, 2002. Also, Iroquois believes Millennium’s targetedNovember 2001 in-service date is “optimistic” in light of therecent decision by the National Energy Board’s Joint Review Panelto delay consideration of Millennium’s upstream Canadian facilitiesuntil November.
©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 2577-9877 | ISSN © 1532-1266 |