FERC Denies Waiver for Long-Term Capacity Release

By letter order issued September 17, 2012, FERC denied Columbia Gas Transmission, LLC’s (“Columbia”) request for a waiver of FERC’s regulations restricting long-term capacity release transactions at rates exceeding the maximum applicable rate.  Columbia requested the waiver on behalf of one of its shippers, Northeast Natural Energy LLC (“NNE”), in order to effectuate the release of a portion of NNE’s capacity to EXCO Resources (PA), LLC (“EXCO”) for a period of three years at a rate exceeding Columbia’s maximum recourse rate.  In denying Columbia’s request, FERC acknowledged that it had previously waived its maximum rate requirement, but only for permanent transfers of capacity to which the pipeline was, ultimately, financially indifferent.  FERC distinguished such permanent transfers from the long-term but nevertheless temporary release for which Columbia requested waiver, concluding that prior FERC orders granting waivers for permanent transfers were inapplicable to Columbia.  FERC also found that Columbia failed to adequately describe the nature of the proposed capacity release or explain why the requested waiver was necessary to consummate the release.

Visit the FERC’s website for the full text of the letter order.

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