Judge Endorses FGT’s Gas Composition Standards in AES v. FGT Complaint Proceeding

Yesterday, FERC Administrative Law Judge Herbert Grossman issued an Initial Decision in a complaint proceeding intended to determine the appropriate gas quality and interchangeability standards necessary to accommodate the introduction of revaporized LNG into the Florida Gas Transmission pipeline system from LNG terminals proposed for the Bahamas. The ALJ approved FGT’s proposed gas composition standards as the best proposal put forward by any of the parties. Specifically, concluding that the LNG suppliers’ proposal of an upper Wobbe limit of 1400 was too broad, the ALJ found that FGT’s proposal of Wobbe Index limits of 1340 minimum and 1396 maximum “will permit the safe operation of the turbines on [FGT’s] system, will do so without their violating environmental emissions standards …, and will not void their manufacturers warranties, while at the same time permitting the importation of a substantial amount of LNG.” The judge also considered the applicability of the recent industry white paper on interchangeability to the proceeding and held that the interim guidelines adopted in the white paper “were intentionally conservative and were inherently intended to be expanded,” thus rejecting the request of certain Florida generators for very narrow standards. The ALJ’s 65-page Initial Decision is available in the FERC e-Library in Docket No. RP04-249.