On September 29, 2023, the Federal Energy Regulatory Commission (FERC) granted approval to Tennessee Gas Pipeline Company, L.L.C. (TGP) for its proposal to lease intrastate capacity from Kinder Morgan Texas Pipeline LLC (Kinder Morgan). This decision enables TGP to initiate a new hourly transportation service branded as “PowerServe”.
According to the joint application submitted by TGP and Kinder Morgan, the new service aims to provide increased flexibility to shippers predominantly serving gas-fired power generation facilities giving an alternative to renewable energy sources. However, the response from FERC’s Commissioner Danly wasn’t entirely positive, as he found reasons for both concurrence and dissent.
The PowerServe rate schedule comes as a significant move in the energy sector, essentially impacting numerous power generators who rely primarily on the gas supply. Given the volatility of renewable energy sources, gas-fired power generation often acts as a safety valve to ensure uninterrupted power supply.
Additional details on the deal remain limited. The full extent of Commissioner Danly’s dissent and concurrence as well as further disclosures on the specifics of the PowerServe service and lease agreement between TGP and Kinder Morgan haven’t been publicly disclosed as of yet.
For more comprehensive report on FERC’s approval of TGP’s proposal, please visit here.