Washington (Platts)--21Feb2008

The US Federal Energy Regulatory Commission on Thursday affirmed its
November decision authorizing construction and operation of a gas pipeline
expansion designed to serve power plants in Arizona.

Transwestern Pipeline intends to bulk up to serve the fast-growing
Phoenix metropolitan area by adding 500,000 Mcf/d of capacity to its existing
interstate system in New Mexico and Arizona. Currently, the Phoenix area
relies solely on the El Paso Natural Gas system, which has struggled to keep
up with rapidly increasing demand, FERC noted.

Gas to be transported on the Transwestern expansion would come from Rocky
Mountain and San Juan Basin production regions and would be used primarily to
fuel power plants around Phoenix. The expansion also is designed to increase
gas supply reliability and flexibility for customers in central and southern
Arizona.

Thee town of Buckeye, Arizona, and various developers challenged the
project, arguing that it would cause irreparable harm to landowners. Noting
that the expansion will follow existing rights or way, the commission rejected
the arguments and upheld the earlier certificate order.