From today's Gas Daily:

***FERC gives Kern River project speedy approval

     Only three weeks after receiving the certificate application, FERC 
Friday granted Kern River Gas Transmission authority to proceed 
with a 135 million cfd expansion of its system that will move new 
gas supplies from Wyoming to California. The unprecedented speed in 
which FERC completed its review of the $81 million project grew out 
of the commission's desire to address the energy crisis in 
California, which is expected to worsen this summer in light of 
forecasts for continued high gas prices and shortages of power 
generation capacity.
     FERC typically takes several months to complete the review 
process of a pipeline project application of similar size to Kern 
River's, a FERC spokeswoman said. But the commission said its staff 
was able to successfully coordinate regulatory efforts with 
federal and state agencies to ensure Kern River's application 
process moved expeditiously.
     "We are pleased the FERC has fast-tracked this application," said 
Kirk Morgan, director of business development for Kern River. "We 
are looking at every option to bring additional supplies of natural 
gas to the California market in time for the summer cooling 
season," he said.
     The expansion will include three new "emergency" compressor 
stations: the Elberta Compressor Station in Utah County, Utah; the 
Veyo Compressor station in Washington County, Utah; and the 
Daggett Compressor Station in San Bernardino County, Calif. The 
installation of these new facilities -- which have been approved by 
various permitting agencies in Wyoming, Utah, Nevada and California 
-- will boost capacity on the system by 19%, Kern River said.
     The proposal also included upgrades at three existing 
compressor stations: the Muddy Creek Compressor Station in 
Lincoln County, Wyo., the Fillmore Compressor Station in Millard 
County, Utah; and the Goodsprings Compressor Station in Clark 
County, Nev. The plan also included an upgrade of the existing 
Wheeler Ridge Meter Station in Kern County, Calif. Kern River said 
Friday that the expansion's expected in-service date is July 23.
     "Our rapid certification of these facilities is evidence that we 
are prepared to do whatever we can to rush supplies to the West 
Coast markets," FERC Chairman Curt Hebert said in a statement 
Friday. "My fellow commissioners, William L. Massey and Linda K. 
Breathitt, pulled together, with staff's assistance, to give priority 
to the West's energy needs."
     Although she voted to approve the certificate, Breathitt wasn't 
completely happy with the process involved in permitting. "[I]t has 
been somewhat difficult for me to view Kern River's 'California 
Action' project as being one that necessarily merits the kind of 
extraordinary regulatory treatment that we have granted the 
applicant in this case," Breathitt wrote in a partial dissent. "My 
hesitation does not come only from the fact that Kern River has 
pending before this commission a very similar proposal in which 
the parties have raised valid concerns that would pertain to any 
expansion of Kern River."
     In a separate proceeding, Kern River, a subsidiary of Williams, 
filed an application with FERC last year for permission to add 
124,500 dth/d of firm transportation service, which is scheduled 
to go into service May 1, 2002. Breathitt argued that it would have 
made more sense for the commission to have considered the two 
applications at the same time.
     But she also stressed that, because of capacity constraints at 
the Wheeler Ridge, Calif., interconnections with the intrastate 
distribution systems of Southern California Gas and Pacific Gas and 
Electric, the Kern River expansion may not benefit its intended 
beneficiaries -- power plant operators. "[T]he record of this 
proceeding is inadequate for the commission to independently 
assess the congestion issues at Wheeler Ridge," she said. "I am very 
uncomfortable that this order does not take the opportunity for a 
fuller airing of this issue."
     Breathitt argued that FERC's order will not necessarily result 
in any net increase of gas in the California marketplace because of 
the congestion at Wheeler Ridge.
     Intervenors in the case, she noted, have alleged that insufficient 
take-away capacity at Wheeler Ridge and the resulting degradation of 
firm shippers' rights will place them in a situation analogous to 
the type of capacity rights controversy that FERC recently 
addressed at the Topock delivery point.
     She praised FERC staff for meeting the compressed deadlines in 
the order, but she also said, "The precedent we have created could 
be a double-edged sword. What signals does this order really send? 
Will the commission be able to keep up this pace on other pending 
'emergency' expansion applications?" (CP01-106)     MH/CD