Federal

In upholding the rolled-in rate settlement of PG&E GasTransmission Northwest Corp., the Federal Energy RegulatoryCommission ruled last week that replacement shippers who receivedpermanent releases of older, pre-expansion capacity were similarlysituated to the system’s expansion shippers and, therefore, shouldbe charged similar rates.

The Federal Energy Regulatory Commission last week announced itwill hold a symposium later this month to address reform of itscomplaint procedures.

The U.S. Environmental Protection Agency has found some missingelements in the draft environmental impact statement (DEIS)prepared by the Federal Energy Regulatory Commission on theAlliance Pipeline project which is in competition with Voyaguer tocarry western Canadian supplies to the Chicago area.

Energy guru and Pulitzer-prize winning author Daniel Yergin toldFederal Energy Regulatory Commission staffers there will still be aplace for the agency in the next millennium despite the fact themarketplace is taking “The Commanding Heights” away fromgovernments.

In a “Freddie Krueger-style” wipeout, a federal district courton Friday the 13th dealt a crippling blow to a major producergroup and two producers when it denied their motions dealing withroyalty treatment of take-or-pay settlement payments. U.S. DistrictCourt Judge Royce Lamberth upheld his earlier ruling that theIndependent Petroleum Association of America (IPAA) lackedjurisdiction in a lawsuit challenging the Interior Department’scollection of royalties on lump-sum payments made by producers toget out of their gas contracts with pipelines. The IPAA lawsuit ledto a 1996 ruling by the D.C. Circuit Court of Appeals in favor ofgas producers

With all regulatory approvals in place at both Federal andProvincial levels, sponsors of the Sable Island Offshore EnergyProject last week signed both their key commercial agreements andthe Facilities Alliance Agreement to engineer, construct andinstall production and gathering facilities to handle delivery of 3.5 Tcf of gas from offshore Nova Scotia. This formally commits theowners to the $2 billion first phase, which will deliver the firstgas in late 1999.