Second gas pipeline proposal for county in court|[01/16/07]

Published 12:00 am Tuesday, January 16, 2007

As a regulatory deadline looms for landowners to comment on one natural gas pipeline proposed for south Warren County, another pipeline project has found its way into county court.

The public comment period on the application filed with the Federal Energy Regulatory Commission to build a 270-mile pipeline from Delhi, La. to Mobile, Ala., ends Friday.

By mid-March, federal regulators are also expected to issue an initial environmental review on the pipeline, which, if completed, will pass through Warren County between the Yokena and Cedars communities.

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The natural gas transmission arm of one of the companies in the joint venture to build it, Duke Energy Gas Transmission, split off from its parent company and became Spectra Energy Corp. Jan. 1.

&#8220We are focused especially on assets that are natural gas-related,” said Gretchen Krueger, spokesman for Houston-based Spectra, which will continue the original joint venture with CenterPoint Energy Gas Transmission.

The planned size of the first 115 miles of the pipeline has also been expanded from 36 inches to 42 inches, resulting in an agreement reached before Jan. 1 by Duke Energy to jointly own the segment with El Paso-based Southern Natural Gas, the owner of the largest natural gas pipeline system in North America.

A separate pipeline, the East Texas to Mississippi Expansion Project, proposed by Houston-based Gulf South Pipeline LP, is slightly ahead of schedule in its approval process with FERC.

An initial environmental review is expected &#8220sometime this month,” said Gulf South’s director of certificates, J. Kyle Stephens, adding a final report on the pipeline’s environmental impact is due in March.

The company plans to build a 42-inch line from a hub at Keatchie, La., just south of Shreveport, to one in Harrisville in Simpson County, passing through central Warren County in the process.

It would cross into Vicksburg just south of the Baxter Wilson Power Plant and continue across U.S. 61 South near Grange Hall Road and run across the county line with Hinds near the southern edge of Bovina Cut-Off Road.

Records filed in Warren County Court show seven eminent domain suits have been filed by Gulf South against landowners along that stretch to persuade them to sell land or easements for the pipeline’s construction.

Meanwhile, Warren County supervisors briefly considered voting on the details of their already-approved resolution of support to give a tax break to the Spectra project in the form of a fee-in-lieu of property taxes.

Before supervisors agreed in principle to grant the fee-in-lieu in April 2006, company representatives said the amount paid to the county and the school district would be $125,000 in each of the first 10 years, then $375,000 per year in subsequent years. Also, the number of temporary construction jobs was estimated at 3,000 and 15 permanent jobs.

In the latest communication with supervisors, those estimates have dropped to 2,000 and 10, respectively.

Superintendent of Education Dr. James Price has voiced objection to the deal, saying supervisors have shortchanged schools and likely set the stage for a general property tax increase by supporting the exemption. The vote was unanimous, but District 4 Supervisor Carl Flanders later said the board should have had more time to weigh the issue.

In August, officials with the Gulf South project told county supervisors and municipal officials in Vicksburg they will also ask for a fee-in-lieu along the same lines, but the board has not followed through on a resolution of support since eminent domain litigation began.

In the agreement that hit Warren County supervisors’ desks last week, the company said its investment in the 12 Mississippi counties it will cross will top $600 million, with $18.5 million in Warren County alone.

However, it was likely this morning the county board would take up the issue until the value of the land through which the pipeline will run becomes clearer.

&#8220I don’t believe everyone has a clear grasp of the facts of the matter,” District 5 Supervisor and board president Richard George said. &#8220We’ll discuss it at some point in time.”

Flanders, whose district portions of both pipelines would cross, said last week he was now hesitant to vote for fees-in-lieu, despite his previous vote.

&#8220I will never support a taxing system that short-changes our education system,” said Flanders, a former middle-school teacher.

Flanders also voiced only tepid support for a possible fee-in-lieu for expansion at Ergon, and voted against exemptions the company won for inventory and warehousing.

George has reflected most of the business community’s stance that the opposite is true, and having a pipeline &#8220that doesn’t have to come here” is a financial plus to county coffers.

&#8220One thing about that pipe is you don’t have to teach it and you don’t have to feed it,” George said to supervisors, saying the projects generate revenue, but not expenses.

In December, the Vicksburg Warren School District voted to begin negotiations on a 25-year lease with Gulf South for use of 16th Section land that would be crossed by the project.

Tentative negotiations are for the company to pay the school district three lump sums totaling $125,525 for tracts on Halls Ferry Road, Dana Road and along the Big Black River, monies that would include timber damage compensation as well.

George and board attorney Paul Winfield, who was to present the agreement to the board, indicated supervisors may wait until the Mississippi State Tax Commission can weigh in on the exact value of the property involved.

Public utilities are assessed at 30 percent, whereas homestead parcels are assessed at 10 percent and all other property, including commercial, rental and agricultural are assessed at 15 percent.

Gulf South has estimated the East Texas to Mississippi Project will cost $780 million. If the tax commission assesses the land value at the company estimate, $40.5 million, the potential fee-in-lieu over 10 years will be $477,852, according to calculations by Warren County Tax Assessor Richard Holland.

If completed, the two pipelines are set to run less than 10 miles apart from each other once they cross the Mississippi River. However, the Gulf South project would cover more property in Warren County than the proposed Spectra line, thus making for a larger potential tax break.

Construction is not expected to begin until late this year. Even if so, full service through both lines would not begin until mid-2008.

According to FERC, applications to begin regulatory processes were received for 35 different pipeline and liquefied natural gas projects in 2006. Of those, only one, a CenterPoint project in northeastern Texas and northern Louisiana, has been issued a certificate.