Letter

Daniel Adamson, FERC director of the Office of Energy Projects,fired off a letter of rejection to Millennium Pipeline last week,regarding an amendment application for a proposed route changealong the highly controversial power transmission right of way inWestchester County, NY. He also told Millennium officials toconsider substituting a proposed extension of the Iroquois GasTransmission system for the Millennium project.

Daniel M. Adamson, director of the office of energy projects atthe Federal Energy Regulatory Commission, sent a letter to ColumbiaEnergy’s David Pentzein this week requesting a status report on the$650 million Millennium Pipeline project in light of all the recentcriticism from New York regulators and the impact of theColumbia-NiSource merger. The 442-mile project would bring about714 MMcf/d of gas from Canada under Lake Erie to the New Yorkmetropolitan area.

El Paso Energy Partners LP, formerly Leviathan Gas PipelinePartners LP, said it has entered into a letter of intent with asubsidiary of El Paso Energy Corp. to buy El PasoIntrastate-Alabama Inc. (EPIA) for $24.5 million in cash. EPIA ownsand operates 450 miles of gathering and transmission pipelines andrelated compression facilities in the Black Warrior Basin inwestern Alabama.

El Paso Energy Partners LP, formerly Leviathan Gas PipelinePartners LP, said it has entered into a letter of intent with asubsidiary of El Paso Energy Corp. to buy El Paso Intrastate -Alabama Inc. (EPIA) for $24.5 million in cash. EPIA owns andoperates 450 miles of gathering and transmission pipelines andrelated compression facilities in the Black Warrior Basin inwestern Alabama.

Mitchell Energy & Development Corp. announced it enteredinto a letter of intent to purchase Conoco’s 50% interest in theJameson processing plant and an associated 2,600-mile West Texasgas gathering system for an undisclosed sum. The Permian Basinplant and facilities currently are owned evenly by Conoco andMitchell.

Mitchell Energy & Development Corp. announced it enteredinto a letter of intent yesterday to purchase Conoco’s 50% interestin the Jameson processing plant and the associated 2,600-mile gasgathering system for an undisclosed sum. The plant, located in WestTexas, is currently owned evenly by Conoco and Mitchell.

In a letter to U.S. Interior Secretary Bruce Babbitt this weekSen. Dianne Feinstein (D-CA) urged Interior’s Minerals ManagementService to shutdown exploration on 40 offshore California leases,for which producers paid $1.25 billion initially.

FERC is not doing its job if it hides behind the letter of thelaw and refuses to recognize abuses of market power merely becausethe abusers are staying within the bounds of maximum lawful rates.That was the decision on April 9 of the D.C. Court of Appeals,which found an order by the Federal Energy Regulatory Commission ina case involving rates charged by Southern California Gas”arbitrary and capricious.” (Southern California Edison v. FERC,No. 97-1699). Now Exxon Co. U.S.A. has asked FERC to reopen a caseinvolving Dynegy’s long-term leasing of unsubscribed capacity on ElPaso Natural Gas (RP97-287-010), saying the two cases are directlyrelated.

In a terse letter to FERC recently, Cuba Wadlington Jr.,Transcontinental Gas Pipe Line’s senior vice president and generalmanager, became the first pipeline representative to formallycriticize the Commission’s recent departure from its long-standingpolicy of issuing preliminary determinations on pipeline expansionapplications.