Atlanta Gas Light’s plea for limited waivers of FERC’scapacity-release regulations and other rules has drawn a howl ofprotests from producers. The Georgia-based LDC is seeking thewaivers to “facilitate” its application to unbundle itsdistribution services, which currently is pending before thestate’s Public Service Commission.

Indicated Shippers urged FERC to hold a technical conference tocarefully weigh AGL’s request, noting that it “raises issues offirst impression regarding how the Commission will deal with stateunbundling efforts on a generic basis,” and, as such, “willestablish a template for whether, and to what extent, theCommission will depart from its capacity-release and other relatedtransportation policies for each entity affected by a stateunbundling program.”

Even more importantly, the Commission – if it allows the waivers- would be giving regulatory control over released interstatecapacity to the Georgia Public Service Commission (GPSC), IndicatedShippers cautioned. That would mean that “the rights to Atlanta’sreleased capacity would be governed by GPSC’s rules, not theCommission’s.” Producers also urged FERC to carefully scrutinizeAGL’s request seeking authority to transport gas that it doesn’town to marketers selling gas in its service territory [RP98-206].For this, AGL is seeking a waiver of the “shipper must have title”policy.

“These matters raise serious jurisdictional questions even ifGeorgia were the only state seeking to unbundle distributionservices,” Indicated Shippers noted. “But similar efforts arelikely in other states, thereby raising the specter of amultiplicity of potentially conflicting capacity-release andassignment rules. A hodgepodge of state rules governing interstatecapacity [would run] counter to the Commission’s general policygoals” for an integrated pipeline grid.

Producers further faulted AGL for failing to reveal how itsmarketing affiliates “will figure into the unbundled market.” FERCshould ensure that the waivers, if granted, don’t give unduepreferences to AGL’s affiliates. They also believe the proposalcould potentially discriminate against other shippers that wouldwant to buy AGL’s pipeline capacity to compete with existingmarketers in AGL’s service territory.

Causing all the fury is AGL’s proposal to directly release orassign its Part 284 transportation and storage capacity on upstreampipelines to marketers on a monthly basis, with the amount basedupon each marketer’s share of the end-use market that month. Sincethe releases will be done monthly, AGL has asked FERC for a waiverof its posting and bidding requirements for an existing discountedtransportation service. As for its individually certificated Part157 capacity, which can’t be released under the Commission’scapacity-release rules, AGL proposes to combine these services intoits new Incremental Bundled Storage Service (IBSS) and distributeit to marketers on the same basis as distribution and upstream Part284 capacity.

Transcontinental Gas Pipe Line, which provides Part 157services to AGL, said it didn’t object to FERC allowing the Georgiadistributor to include the individually certificated services inits new IBSS package. But it asked the Commission to “affirm thatTransco’s contractual relationships with Atlanta under [certain]rate schedules…remain intact and that inclusion of any or all ofthose services under Atlanta’s IBSS will not alter in any respectthe rights and duties of Transco and Atlanta…, or create anycontractual or other relationship, right or duty between Transcoand any third party using Atlanta’s IBSS.”

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