Existing shippers on Transcontinental Gas Pipe Line haveshredded the pipeline company’s $529 million MarketLink expansionproject, saying it should be rejected by the Commission, or Transcoshould be put at risk for the cost. The project would add 154 milesof pipeline looping and 62,400 hp of compression along Transco’sLeidy Line, which extends from the Leidy hub in westernPennsylvania to New York City.

Protesters said the project lacks binding market commitments,fails to report its reliance on the upstream Independence andSupplyLink projects, threatens to create redundant capacity to NewYork City and fails to provide firm service to the Mid-Atlantic andSoutheast region markets it is designed to serve.

Consolidated Edison, Public Service Electric and Gas, WashingtonGas Light and Delmarva Power and Light, as well as Transcocompetitor Consolidated Natural Gas decried Transco’s attempt topush a project through the Commission with contracts that allow theshipping parties, mostly marketers affiliated with Transco andIndependence sponsors, to walk away without paying a penny if theycan’t find markets for the gas they ship on the expansion. CNGnotes the only precedent agreement without a “market out” provisionis that of LFG Energy for 5,000 Dth/d for 15 years. “To allowconstruction of a pipeline facility to be supported by a singlecontract evidencing less that 1% [of the 700 MMcf/d] of proposedcapacity would certainly set a new precedent for the acceptablethreshold of market support.”

ConEd noted the project will add 472,000 Dth/d of capacity toprimary delivery points in the New York City area (a 30% increasein deliverability) when New York’s LDCs project demand to increaseonly 3% by Nov. 1, 2000, the proposed in-service date of theproject. “Indeed, there is no projected need for peak-day capacityadditions into the New York City area until after 2005. Even then,it would take nearly two decades at the present growth rate for theMarketLink capacity to New York to be fully needed. No peakcapacity additions, moreover, are required to meet forecastedgrowth. The largest market segment forecasted for growth in gas useis power generation, for which peak capacity is generally notrequired.” As a result, the project would create a large amount ofexcess capacity to the region, devaluing capacity contracts held byexisting Transco shippers.

Furthermore, ConEd said, Transco proposes to provide access tothe Mid-Atlantic and Southeast region markets through backhaulservices, which depend “on the existence of ‘at least theequivalent amount of forward haul volumes flowing simultaneouslywith the backhaul volumes.’ Thus, it will not always be possible toperform firm primary path backhaul service. The Commission shouldnot certificate a half billion dollar project in order tofacilitate non-firm service.”

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