VCE Weekly Update

Pipelines Move Forward, Power Plants Face Obstacles

by Annette Smith (Executive Director of Vermonters for a Clean Environment, Inc.)

Providing support for the idea that the Federal Energy Regulatory Commission [FERC] has never seen a pipeline it doesn't like, last week FERC approved the construction of the Transcontinetal natural gas pipeline in New Jersey that is opposed by the Governor, U.S. Representatives to Congress, and all 30 plus towns along the route. The route runs through environmentally sensitive areas, private property, and close to residences, including the parking lot of a college dormitory.

» 04/26: Federal approval given to controversial pipeline - Boston Globe
» 04/27: Federal Panel Clears Plans for Gas Pipeline in New Jersey - New York Times
» 04/28: New Jersey Residents Support Battle against Proposed Pipeline - energy.com
» 05/01: Big gas pipeline clears a hurdle - New Jersey Online : Star-Ledger News

STOP! "...A coalition of municipalities, organizations and citizens formed to stop the proposed WILLIAMS/TRANSCO pipeline in New Jersey and to promote safer gas pipeline standards for the benefit of the public and the environment."

The New Jersey pipeline project was originally part of a larger project to deliver Western Canadian natural gas from a hub near Chicago to the east coast, but this was subsequently split into two separate projects applied for separately. The western project, the Independence Pipeline Co.'s pipeline through Ohio and Pennsylvania, was put on hold until promoters prove that there is a market for for the natural gas. If the promoters cannot document their market within 60 days their application will be dismissed.

After issuing this decision, FERC commissioners were pushed to explain their decision:

Sen. Frank Murkowski, R-Alaska, on Thursday questioned why FERC placed burdensome requirements on Independence Pipeline Co., which would ship gas to the Northeast. FERC on Tuesday required Independence sponsors to show market support within 60 days or face dismissal of their application. "I will want an explanation from each of you as to why you are not doing everything you can to get this pipeline built as fast and cheaply as possible," Murkowski told the four FERC commissioners appearing before the Senate Energy and Natural Resources Committee. Commissioner William Massey denied that FERC wants to see the Independence project die. "If we wanted to kill the project we would not have approved it" in a heavily conditioned interim order in December, he responded. Nevertheless, Murkowski maintained that "the commission's actions in the Independence Pipeline case seem to indicate that you really don't want this pipeline built."
... 04/28: FERC Members Grilled on Independence Case - McGraw-Hill Energy Online/Natural Gas Alert

The Independence pipeline would run through farmland in Ohio and Pennsylvania. Dairy farmers learned that an application with FERC had been filed when they saw surveyors on their land without their permission. When they investigated, they learned that the comment period had already expired.

» See the Ohio Pennsylvania Landowners Association (OPLA) website for access to information.

In other FERC pipeline decisions last week, two gas pipelines that would run under the Gulf of Mexico to Florida were approved.

» 04/28: Federal Officials Tentatively Approve Two Gas Pipelines for Florida - energy.com

The "need" for the natural gas is to fuel new merchant power plants. However the recent Florida Supreme Court decision that found that merchant power plants cannot be approved under current Florida law does not seem to have been taken into consideration by FERC. The following article discusses the connection between merchant power plants and gas pipelines, but neglects to factor in the need to change Florida law before new merchant power plants can be built.

» 04/28: New Electric Plants Wield Power over Gas Pipeline Projects - Energy.com

In Iowa, power plant developers have withdrawn plans to build merchant power plants because efforts to change the law failed in the legislature:

LCG, April 26, 2000 -- Mid-American Energy Co., Iowa's largest electric utility, said yesterday it was planning to build two new power plants with a combined capacity of 575 megawatts, but the plants would be built in a state more congenial to competition in the electric power industry.

What Iowa is missing out on are a four-unit 350 megawatt combustion turbine peaking facility and a two-unit combined-cycle intermediate load plant. The state is beginning to need the power, recovering at last from an economic downturn that began in the late 1980s.

Earlier this month, with electric restructuring bills pending in both the House and Senate of the Iowa Legislature, Mid-American said it would build two plants in Iowa at a cost approaching $300 million if the deregulation measures passed. The electric industry legislation died in committee in the waning days of the legislative session.

"Iowa took itself out of the running," said Ron Stepien, Mid-American president. His company had contributed heavily to groups supporting the legislation, but "We don't plan on participating in restructuring legislation next year," he said.

"The main issue is a predictable environment," Stepien added. "This isn't the case for Iowa, so I don't see us changing our view."

Mid-American will be limited in its search for nearby states. Of the 25 states that have approved retail electric competition, only Illinois abuts Iowa. Mid-American is currently building a 550 megawatt natural gas-fired, combined-cycle facility in Cordova, Ill., not far from Commonwealth Edison Co.'s Quad Cities nuclear power plant. It is scheduled to begin commercial operation in about a year.

Stepien said his company would like to begin development of the two plants this year in anticipation of a need for their power around the time of their completion. "We have normal load growth and need to add capacity during that period," he said. He also noted "We do need to build or buy for delivery into Iowa."

... 04/26: Dereg failure costs state two power plants - Energy Online

Efforts to change the Vermont law that affects power plants, Act 248, also failed in this year's legislature. Until the law is changed, merchant power plants cannot be approved, according to the Public Service Board.

And a merchant power plant proposed for Washington State has run into opposition from neighboring British Columbia, citing concerns about pollution.

» 04/29: B.C. taking steps to stop Sumas plant - Bellingham Herald

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