In its latest attack on the competing Guardian Pipeline project,Coastal Corp. affiliate American Natural Resources (ANR) maintainsdata from the Wisconsin Public Service Commission show Guardian’stransportation rate would be more than 30% higher than the rateoffered by ANR.

Contrary to claims made by Guardian Pipeline proponents thatGuardian’s proposed pipeline will lead to lower rates for gasusers, the effective transportation rate charged by Guardian wouldbe 23 cents/Dth/d versus the ANR effective rate of 16 cents, ANRsaid.

“This information, which we obtained under an open recordsrequest, flatly refutes Guardian’s unsubstantiated claim that itsproposed pipeline would lead to lower costs for natural gas usersin Wisconsin and northern Illinois,” said Dan Gunderson, ANRdirector of corporate affairs. “Guardian’s public relationscampaign statements claim $100 million in savings. In fact,Wisconsin Gas Co. customers in the Milwaukee area will pay at least$150 million more in transportation costs for this proposedpipeline than would otherwise be paid for service on the existingAmerican Natural Resources pipeline system.”

A Wisconsin Gas spokesman refuted ANR’s claims. “ANR’s cost/rateclaims are confusing as it is not known what they mean by the term,quote unquote, ‘effective rate,'” said David Fantle. “We do knowthat the 16-cent per dekatherm rate they use does not reflect thefull cost to Wisconsin gas for taking service from ANR under theirtariff. ANR’s 16-cent per therm rate for off services is not a rateANR has ever offered to Wisconsin Gas. We do know that the 16-centrate is the 100% load factor rate for one ANR service, and that’sits enhanced transportation service. The threat of Guardian isforcing ANR to price its services competitively. Just thecompetition looming on the horizon has already been a benefit tonatural gas users.”

Wisconsin PSC spokeswoman Annemarie Newman said the commissionhas reviewed the economics of a lateral from the Guardian Pipelineto the Wisconsin Gas system and determined it would be aneconomical way for the LDC to meet its supply needs.

“We don’t know where [ANR] got those figures from, so I don’thave any kind of direct comment on the figures. What the commissionhas done so far is approved an amendment to Wisconsin Gas’ supplyplan, and that was approved based on a commission analysis that wasnot a simple rate-to-rate comparison. Rather, we took into accountall of the costs to Wisconsin Gas customers for all of theservices, and that includes firm transportation, firm storage,no-notice contracts and the cost of fuel on ANR. ANR had theopportunity to put in a bid with their whole portfolio.”

The Wisconsin PSC has not received an application forconstruction of the Guardian lateral and has not made anydetermination on the construction aspect of the project, she said.

Gunderson also noted the results of the most recent statewideopinion poll by the Wisconsin Trends research organization. Whenasked to rank issues of most importance when weighing two pipelineproposals, 38% of those surveyed said regulators should be mostconcerned about environmental disruption that the new pipelinemight cause. Another 31% ranked landowner rights as their primaryconcern. Significantly, only 8.7% of the respondents in the pollactually ranked competition in the pipeline industry as mostimportant. (The survey of 600 had a 3.97% margin of error.)

“This poll shows that the citizens of our state are moreconcerned – by 69% to 8.7% – about landowner rights andenvironmental disruption than they are with competition in thepipeline industry.”

ANR which is the monopoly interstate pipeline in Wisconsin,operates more than 1,700 miles of pipeline in the state. Guardianis backed by WICOR, CMS Energy and Viking Gas. WICOR subsidiaryWisconsin Gas, the state’s largest LDC, has signed a long-termcontract for 650 MMcf/d of capacity on Guardian.

Joe Fisher, Houston

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