Atlanta Gas Light Co. (AGL) plans to battle a bypass order issued by the Federal Energy Regulatory Commission.
The dispute stems from a FERC order to Southern Natural Gas Co. (SNG) to bypass AGL, a local distribution company (LDC), and provide direct gas transportation service to Arcadian Corp.'s Augusta, Ga., fertilizer plant. The latest order reversed an earlier FERC decision.
"We intend to seek rehearing from FERC and, if that is unsuccessful, appeal the decision to the courts," said Charles W. Bass, AGL senior vice-president for government and regulatory affairs.
FERC's decision could spawn a nationwide trend in which large industrial customers bypass LDCs and connect with interstate pipeline companies, AGL said. Those actions could have a "serious impact" on the rates of remaining utility customers.
AGL said removal of its largest industrial customer will wipe out revenues of about $4 million/year, equal to 1% of its base revenue. AGL emphasized that fact in its opposition to Arcadian's request for the bypass because fixed costs formerly recovered from Arcadian will now have to be divided among remaining customers of the utility.
In her opposition to Arcadian's request, Nancy Gibson, Georgia Consumers' Utility Counsel (GCUC), said, "The loss of Arcadian will have serious ramifications on service to residential and small commercial consumers.
AGL views the FERC order as an infringement by the federal government on state utility regulation.
Arcadian currently benefits from the lowest rates on AGL's system, the utility said.
Arguing against the latest order were the Georgia Public Service Commission, National Association of Regulatory Utility Commissioners, SNG, GCUC, and AGL.
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