Newspaper article THE JOURNAL RECORD

Judge Halts Interim Use of Natural Gas Pipeline

Newspaper article THE JOURNAL RECORD

Judge Halts Interim Use of Natural Gas Pipeline

Article excerpt

A state judge Monday found that the pipeline going to Smith Cogeneration Inc. in Oklahoma City cannot deliver natural gas while an appeal is made on a May ruling that a franchise in required.

Oklahoma County District Judge David M. Cook issued an order Monday that negated an order he issued June 23 to allow operation of the pipeline pending appeal of a May 19 order. The May 19 order granted a permanent injunction against operation of the pipeline without a franchise.

Williams Natural Gas Co., a subsidiary of The Williams Companies Inc. of Tulsa, owns the completed $2.5 million pipeline that runs to the cogeneration plant. The $79 million cogeneration plant has contracted to supply steam to the Firestone Tire & Rubber Co. at 2500 S. Council Rd. this summer. Oklahoma Gas & Electric Co. has signed a power sales agreement to purchase electricity generated at the plant.

Oklahoma Natural Gas Co., a subisidiary of ONEOK Inc. of Tulsa, initiated the lawsuit in state court and had requested Cook reconsider the stay, asserting it was inconsistent with the permanent injunction.

Cook agreed, ruling Monday, "To stay the injunction in this case pending an appeal would give Williams the opportunity to proceed with the operation of its pipeline and thus complete a fait accompli (factor deed accomplished, presumably irreversible) by the time the appeal can be determined - thus presenting issues which might be moot."

Williams had been prepared to post a bond to cover potential losses to ONG should the Oklahoma Supreme Court appeal fail. The amount of the bond was never decided.

"What's at stake here," said Smith Cogeneration president Don Smith, "is the 1,600 jobs and $75 million payroll at Firestone and increasing the natural gas consumption of Oklahoma to the tune of four times the City of Stillwater.

"Additionally, this will also impact the economic development image of the state of Oklahoma."

Cook noted the potential damage to Smith Cogeneration and Williams, but found that the potential damage to ONG and its ratepayers outweighed any injury to Williams and Smith.

"If PowerSmith (parent company of Smith Cogeneration) finds itself on the horns of a financial dilemma, it is of its own making," the judge found. …

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