The Pennsylvania Commonwealth Court has upheld a state commission order that allowed Pennsylvania Power & Light Co. (PP&L) to convert 35 miles of an 84-mile-long oil pipeline owned by a subsidiary (Interstate Energy Co.) to transport natural gas to the utility's own generating plant, despite objections that a PP&L affiliate might be able to use the new gas pipeline facilities to expand gas services.
The court dismissed concerns about possible self-dealing among affiliates, explaining that such problems were best resolved through rate or contract proceedings (em not in the pipeline certification case.
UGI Utilities, Inc., a gas utility serving consumers located in the area traversed by the converted pipeline, had appealed the PUC decision. UGI, which questioned whether the new gas pipeline might be used to provide competing gas service, argued that the state commission had failed property to consider the fact that the owner of the pipeline, Interstate Energy Co., was a wholly owned subsidiary of PP&L, and might use the pipeline facilities to provide gas service.