NGI The Weekly Gas Market Report
A number of utility and industrial customers in Wisconsincontinue to register their support for the proposed GuardianPipeline, which — if built — would offer the state its firstglimpse of gas pipeline competition.
The expressions of support have come from a variety of sources,including the Wisconsin Utilities Association, the WisconsinRestaurant Association, Community Advocates in Milwaukee, theWisconsin Paperboard Corp., Weyauwega Milk Products and FroedtertMalt, a division of International Malting Co. LLC.
The Wisconsin Utilities Association’s members, who provideelectric and gas services to nearly 90% of the state’s population,”express our strong support for introducing pipeline competitioninto the state of Wisconsin…,” said Kenyon C. Kies, president.The group urged FERC to make a “timely decision” to approveGuardian.
“As one of only three states in the nation without natural gaspipeline competition, it is time that Wisconsin realizes thebenefits competition can provide,” said Ramon Wagner, director ofthe Community Advocates, which represent low-income households andfamilies in Milwaukee. “It is estimated that Wisconsin natural gascustomers will receive in excess of $100 million in savings overthe next ten years” if Guardian is constructed. “In addition,natural gas cost savings could eventually result in lowerelectrical costs for customers and help stimulate our state’seconomy and provide more jobs,” he told FERC [CP00-38].
The proponents, which include Wisconsin Gov. Tommy Thompson, arebanking on the proposed 149-mile, $230 million interstate pipelinecreating competition with ANR Pipeline’s existing system, which hashad a lock on the Wisconsin market for years. ANR not surprisinglyhas been a sharp critic of the Guardian project. The Coastal Corp.pipeline knocked the Guardian sponsors — CMS Energy, WICOR andViking Gas Transmission — for a loop earlier this month when itannounced that it and Peoples Energy were teaming up to build a130-mile pipeline into Wisconsin (See NGI Dec. 13, 1999). Theapplication for Guardian has been filed already at FERC, giving ita slight edge.
By introducing competition into Wisconsin, the Guardian Pipelinewould “lead to stable or even reduced [gas] prices — an essentialelement for restaurants to thrive and to be able to providereasonably priced food to their customers,” said Edward L. Lump,CEO and executive vice president of the Wisconsin RestaurantAssociation, which represents about 7,000 restaurant units in thestate. “Electricity is also vital for restaurants. We needuninterrupted service and low rates for this energy as well. Thereare 10 new gas-fired power plants projected for the near future. Anew pipeline will ensure adequate supplies of electricity as wellas gas.”
Nearly all of the industrial gas users cited the need foradditional gas supplies to support new generation capacity in theMidwest. “Electric usage, at peak times, is near capacity. Newgeneration needs to be brought on line to meet current and futureresidential and industrial growth in southeastern Wisconsin. Whatbetter fuel is there to support this new growth than clean-burningnatural gas?” said Robert F. Domrois, controller for WisconsinPaperboard Corp.
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