Message-ID: <9712969.1075857802745.JavaMail.evans@thyme> Date: Mon, 30 Apr 2001 03:20:00 -0700 (PDT) From: suzanne.calcagno@enron.com To: mark.breese@enron.com, john.hodge@enron.com, chris.germany@enron.com, judy.townsend@enron.com, ruth.concannon@enron.com, robert.superty@enron.com, rebecca.cantrell@enron.com, victor.lamadrid@enron.com, maureen.smith@enron.com, gil.muhl@enron.com Subject: Transco MarketLink Phase III Rejected Mime-Version: 1.0 Content-Type: text/plain; charset=ANSI_X3.4-1968 Content-Transfer-Encoding: quoted-printable X-From: Suzanne Calcagno X-To: Mark Breese, John Hodge, Chris Germany, Judy Townsend, Ruth Concannon, Robert Superty, Rebecca W Cantrell, Victor Lamadrid, Maureen Smith, Gil Muhl X-cc: X-bcc: X-Folder: \Judith_Townsend_Jun2001\Notes Folders\All documents X-Origin: Townsend-J X-FileName: jtownse.nsf Following is from today's Inside FERC. The Commission rejected Phase III b= /c=20 Transco filed contracts for 210,000dth/d, representing firm commitments, rather than for the 404,000/dth/d proposed in the original application. Th= e=20 delay in filing was caused by the protracted negotiations over siting=20 between Transco and the State of New Jersey. The rejection leaves a gap in= =20 the capacity needed to serve the NY/NJ market and may improve the=20 chances for success of the other proposed projects in the NYC area sponsore= d=20 separately by Duke, ElPaso, Iroquois and jointly by Duke/Williams/KeySpan. Please let me know if you need any additional information. ---------------------------------------------------------------------------= --- ---------------------------------------------------------------------=20 Transcontinental Gas Pipe Line Corp. will have to start the FERC approval= =20 process all over again for more than half of its originally anticipated MarketLink capacity. In an Apr= il=20 26 order, the commission said previously granted certificate authority for 404,000 Dt/day of capacity on= =20 the expansion into the New York City metro area has expired. Earlier this month, Transco tried to persuade FERC to allow it to build=20 sufficient facilities to move the gas it had under contract for the project=01,s phase three--only 210,000 Dt= /day=20 of the phase=01,s planned 404,000 Dt/day (IF, 23 April, 4). But that request doesn=01,t square with t= he=20 commission=01,s Dec. 13 approval of project phasing, said last week=01,s order (CP98-540). In the December ruli= ng,=20 the commission said that "should Transco desire to construct some configuration of the remaining=20 MarketLink facilities and services that differ[s] from what has been authorized (in the Dec. 13 order= ),=20 Transco will be required to file an application for a new certificate for those facilities." As a result, Transco now has authority to build only 166,000 Dt/day of=20 phase-one capacity, scheduled to be online Nov. 1, and 130,000 Dt/day of phase-two capacity, expected to = be=20 in service Nov. 1, 2002. "As the history of the MarketLink project amply demonstrates, we authorized= =20 Transco to construct this project on the basis that the capacity was fully subscribed. Now, almost=20 three years after Transco filed its application, one year after we certificated the project, and four months=20 after giving Transco more time to obtain contracts, Transco still does not have a market fully subscribing=20 phase three," said last week=01,s order. Transco was required to show contracts by April 13 for the full 404,000=20 Dt/day capacity of phase three, and when it couldn=01,t do so, certificate authority expired on that date, FERC= said. "Of course, Transco is free to file a new application requesting certificat= e=20 authority to construct and operate the facilities needed" to provide phase-three service, the order=20 added. In filings before FERC acted, the state of New York said Transco should be= =20 given the go-ahead for phase-three construction because "new capacity is needed to serve growth in= =20 the traditional core market as well as the rapidly increasing demand for gas to generate electricity in th= e=20 New York City area." While only a small percentage of the contracted phase-three volumes-- 25,000 Dt/day ou= t=20 of 210,000 Dt/day-- is designated for delivery to New York City, the shipments into the region=20 "should help to alleviate capacity constraints and bring down the high market prices that have been experience= d=20 over recent periods," the state went on to say. Expressing the contrary view, Rep. Bill Pascrell in a short but pointed=20 letter expressed his opposition to the proposal to build downsized facilities for phase three.