Authority

The Bush administration has turned a deaf ear to Sen. Jeff Bingaman’s (D-NM) recommendations on how the president can use his existing authority to cut high-flying natural gas prices and bolster supply.

Chattanooga Gas Co. (CGC), which serves 60,000 customers in southeast Tennessee, has asked the Tennessee Regulatory Authority (TRA) to adjust its rates beginning in March to cover rising costs of providing natural gas to its customers. CGC last increased its rates nine years ago. If the rate hike is approved, a typical residential customer would pay about $3.20 more per month. The total rate increase requested is approximately $4.5 million. However, a reduction in gas costs of over $1 million dollars will be put into effect in the spring of 2004; this change will reduce the amounts charged for gas on customers’ bills. CGC’s new proposed rate plan will provide relief to low-income elderly customers and align customer rates to more accurately reflect CGC’s costs of maintaining its natural gas pipeline system. It will also enable the company to replace 100 miles of aging pipe, consistent with CGC’s goal of continually modernizing the gas infrastructure that has served customers for almost a century. Lindsey cited other pressures that have lead to CGC’s decision to request a rate adjustment, including growing employee benefits costs and bad debt, or uncollectible customer bills. CGC also asked the TRA to approve a cost tracking mechanism for additional expenditures to permit the replacement of a 100-mile segment of its over 1400-mile pipeline system. Some of the pipeline is almost 100 years old and needs to be replaced. Construction is expected to begin during 2004.

FERC issued an order Monday vacating certificate authority previously granted to NE Hub Partners in 1998 for a 6 Bcf high deliverability storage project in Pennsylvania (see Daily GPI, April 16, 1998). In April, NE Hub, which is now owned by Dominion Resources, requested that its certificate be vacated because the storage project is uneconomic and has no customers.

FERC issued an order Monday vacating certificate authority previously granted to NE Hub Partners in 1998 for a 6 Bcf high deliverability storage project in Pennsylvania (see Daily GPI, April 16, 1998). In April, NE Hub, which is now owned by Dominion Resources, requested that its certificate be vacated because the storage project is uneconomic and has no customers.

Even though the Federal Energy Regulatory Commission has direct authority to impose its proposed “code of conduct” only on pipelines and LDCs and their affiliates by attaching it to blanket sales certificates, the California Public Utilities Commission (CPUC) believes “this is a sufficiently large group of sellers of natural gas to warrant adoption of the rules…since many of the affiliates of interstate pipelines or LDCs are among the largest natural gas marketers in the nation” (RM03-10).

Even though the Federal Energy Regulatory Commission only has direct authority to impose its proposed “code of conduct” on pipelines and LDCs and their affiliates by attaching it to blanket sales certificates, the California Public Utilities Commission (CPUC) believes “this is a sufficiently large group of sellers of natural gas to warrant adoption of the rules…since many of the affiliates of interstate pipelines or LDCs are among the largest natural gas marketers in the nation” (RM03-10).

Sen. Dianne Feinstein (D-CA) on Friday asked FERC to strip Reliant of its authority to sell energy at market-based rates, saying that recently released transcripts of traders at the energy company show evidence of “fraud and manipulation” of the Western power markets during the region’s energy crisis of 2000-2001.

The U.S. Supreme Court last Monday declined to hear a recent challenge to a lower court’s ruling affirming that transfers of electric generating facilities between public utilities are not subject to FERC’s review under section 203 of the Federal Power Act (FPA).

The Long Island Power Authority (LIPA) is developing two new power generation projects for completion by next summer and will announce a third project in December, officials said Thursday. FPL Energy and PSEG Power have been selected to build the two facilities, which would add a combined total of 134.9 MW to enhance Long Island’s ability to introduce competition to its service territory.