FERC has approved a $6 million expansion of Pacific GasTransmission Northwest’s (PG&E GT-NW) system that will increasecapacity between Kingsgate, BC, and Stanfield, OR, by 56,000 Dth/dand provide additional systemwide winter capacity of 20,000 Dth/d.

The project is designed to relieve a transportation bottleneckat Stanfield, where PG&E GT-NW has a major interconnect withNorthwest Pipeline. Currently PG&E GT-NW has underutilizedcapacity from Stanfield south to Malin, OR, primarily becausecapacity north of Stanfield to Canadian supply sources isconstrained.

PG&E GT-NW proposes to add a total of 9,700 hp ofcompression at four stations on its system. The pipeline companysigned agreements for a total of 38,392 Dth/d of year-roundcapacity and 20,000 Dth/d of winter-only service with fourshippers: Avista Energy (20,000 Dth/d Kingsgate to Malin winteronly service for 15 years), Duke Energy (5,000 Dth/d Kingsgate toMalin three years and 10,000 Dth/d Kingsgate to Stanfield threeyears), Montana Power Trading (10,000 Dth/d from Kingsgate to Malinfor three years) and Poco Marketing (13,392 Dth/d from Kingsgate toStanfield for seven years).

The California Public Utility Commission, DEK Energy andPanCanadian charged that the pipeline did not sign up sufficientdemand to justify the expansion, and PanCanadian requested PG&EGT-NW be put at risk for the cost of the project. But FERC saidsubscriptions were in line with those of other recently approvedexpansions. “The portion of the expansion capacity under contracttotals 72% for years 1 though 3, 32% for years 4 though 7 and 11%through year 10. PG&E GT-NW’s market showing here is comparableto market showings determined by the Commission to be sufficient inrecent cases,” FERC said. “In addition projected revenues from theproject will recover the costs of the facilities on a long-termbasis.” As a result, the Commission decided placing the pipelinecompany at risk for the costs of the expansion was not warranted.

PG&E GT-NW plans to charge new shippers the general systemrate for service under its rate schedule FTS-1, as well as aCompetitive Equalization Surcharge (CES). PG&E GT-NW said thesurcharge is necessary to ensure new shippers pay the same rate asexisting shippers, who are paying a surcharge related to asettlement in the company’s last rate case. The pipeline companysaid the impact of the expansion costs on its annual cost ofservice and revenues will be insignificant and rolling in the costswill produce a systemwide rate decrease. The Commission agreed toallow the pipeline company to roll in the cost of the expansion inits next rate case.

The CPUC said there was reason to believe the costs wereunderstated because the pipeline company understated the costs ofits last expansion project, but the Commission disagreed, sayingthere was no evidence to support such a claim.

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