FERC yesterday approved an amended certificate for SouthernNatural Gas (Sonat) to build a controversial mainline extension tooffer competing transportation services to customers in northernAlabama and Georgia. The fate of the project, however, still hangsin the balance given that Interior Department’s Fish and WildlifeService (FWS) hasn’t issued Sonat a permit yet to build through aprotected public refuge.

Nevertheless, the Commission decision was a major win for Sonatand other supporters of the pipeline project, but a big, yetexpected, blow for landowners and environmental activists who hadfought tooth and nail against the project for nearly three years.”We’re very pleased” with the draft order, said David Hendrickson,assistant general manager of Sonat. However, GASP CoalitionChairman Anne Marie Mueser, who represents landowner interests,called it a “bad” decision all around.

By a majority vote, the Commission denied rehearing of its May1997 order certificating the Sonat extension, and approved anamendment to the original certificate that would permit thepipeline to build along the existing Interstate 65 corridor in theWheeler National Wildlife Refuge [CP96-153-002]. Sonat doesn’t haveFWS authority to build along the I-65 corridor yet, but Hendricksonsaid the pipeline believes it will be forthcoming within 60 days.Sonat initially had proposed building the extension along a “new”corridor in the refuge, but the FWS denied it a permit.

In a final environmental impact statement issued Wednesday, theCommission staff found that the amended Sonat extension would have”limited adverse environmental impact” if constructed as plannedand additional mitigation measures are followed.

The Sonat case, which has been contentious from the verybeginning, had been scheduled as a discussion item at Wednesday’smeeting, but at the last minute it was pulled and voted on as aconsent agenda item, which raised some eyebrows. “I find it veryinteresting that they didn’t have the guts to discuss this thing inpublic before rubber-stamping it,” Mueser complained. “Certainlythere are issues that were worthy of discussion. There has beennothing straightforward about this process since day one.”

A Commission staff member, however, dismissed such a notion.”…The Commission decided there was no need to talk about it. Thatsometimes happens with regular agenda items. So it was simplycalled with the consent agenda.”

Mueser, who has been at the forefront of the effort to halt theSonat project, sees a bright side to FERC’s decision not to discussthe case. “…[W]e now can go into court and hopefully get a fairhearing on the issues and the merits.” She noted that the originalcertificate and the original route “up to the amendment” are nowripe for court review. “I expect to be getting this into [the D.C.Circuit Court] before Christmas.” In addition, Mueser plans to seekrehearing of the amended route at the Commission. Once in court,”…I think that we’re going to be able to raise the whole issue ofeminent domain in a deregulated industry using this project,” shesaid. “I think we have a constitutional issue here involvingprivate property rights, and I think we also have majorenvironmental issues.” As part of this process, Mueser said GASPintends to ask the court to prevent construction of the Sonatextension until all issues are settled.

More immediately, “we’ll be spending a lot of effort in the nextfew weeks to make sure they [Sonat] don’t get a permit” from FWSthat would allow building along the I-65 route in the refuge. Thisis a “major hot-button issue,” she noted. “Should Fish and Wildlifeissue a permit to cross the refuge…we will have them in court aswell.”

The 120-mile mainline extension would start at Tuscaloosa, AL,and would extend in a northeasterly direction ending west ofHunstville, AL. Sonat proposed the project mainly to providetransportation competition to two Alabama utilities, DecaturUtilities and Huntsville Utilities, who are existing customers ofMidcoast Interstate Transmission. It also would serve three of thepipeline’s existing customers. The pipeline said it hopes to beginconstruction on the extension by spring 1999, and complete it intime for deliveries to start Nov. 1.

In a related filing, the Commission denied rehearing ofMidcoast’s application to build what the pipeline believed to be anenvironmentally preferable alternative to the northern leg ofSonat’s extension through the refuge [CP97-343-002]. It also deniedMidcoast’s request to combine its proceedings with Sonat’s becauseMidcoast failed to demonstrate market support for its alternative -Decatur and Huntsville Utilities both opposed it, and Sonat’s threeexisting customers in that region had executed service agreementson Sonat’s extension. The Commission, however, left open the doorfor Midcoast to re-file its application in the event it can showmarket need.

But acknowledging “continued uncertainty” over whether the Sonatextension will be built – it still doesn’t have a permit from FWS -FERC in another related proceeding granted Midcoast a one-yearextension to operate two compressors at its Sheffield CompressorStation in order to serve growing demand for capacity in northernAlabama [CP97-699-001]. Midcoast asked for the extension followinga June 1997 open season in which customers elected 25,343 Dth/d ofnew capacity. The Commission called this an “interim solution”until the fate of the Sonat project is known.

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