Columbia Gas System Expands into New Era
Columbia Gas Transmission Corp. and Columbia Gulf Transmission Co., the interstate natural gas pipeline subsidiaries of The Columbia Gas System, Inc., have a new chief executive officer (CEO), Catherine Good Abbott, as well as plans for an ambitious expansion. The project and the CEO mark the beginning of a new era for a once-troubled pipeline system that recently emerged from bankruptcy.
On February 28, the companies filed an application at the Federal Energy Regulatory Commission (FERC) proposing a three-year, $350-million expansion of Columbia's pipeline and storage system. Via 15-year agreements, the project would provide about 507,000 dekatherms per day of additional firm storage and transportation service (em an increase of 7 percent over current levels. Eighty-five percent of the new services are for storage and storage-related transportation, for periods ranging from 20 to 90 days.
Columbia has asked the FERC for permission to roll the expansion cost into existing rates. It estimates the rate impact on existing customers at about 1 to 2.5 percent (em well below the 5-percent threshold the FERC recently projected for new projects. Specific rates increases would run as follows:
s Firm Transportation Service 0.70%
s Storage Service Transportation 1.75%
s Firm Storage Service 2.50%
Columbia claims that rolled-in rate treatment is appropriate because the new system will offer 1) greater storage flexibility, 2) enhanced operational flexibility, 3) another high-pressure pipeline system to serve Eastern markets, 4) greater access to Appalachian gas supplies, and 5) increased offpeak transportation capacity.
Overall, Columbia plans to improve performance at 14 of its 44 storage fields, increase operating pressure on about 282 miles of existing transmission pipeline, replace 8.5 miles of transmission pipeline, install or upgrade an additional 65,000 horsepower at 16 existing and two new compressor stations, install new points of delivery, and construct about 88 miles of new pipeline.
According to Abbott, "The reason customers selected our project over competing proposals is simple: We were able to formulate an expansion proposal that tailors services to customer needs at an attractive price."
If the FERC gives its approval, Columbia plans to start construction in Spring 1997, and begin deliveries November 1, 1997.
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