[Federal Register Volume 61, Number 203 (Friday, October 18, 1996)]
[Notices]
[Pages 54430-54432]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26768]


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DEPARTMENT OF ENERGY
[Docket No. CP96-809-000]


Maritimes & Northeast Pipeline, L.L.C.; Notice of Application

October 11, 1996.
    Take notice that on September 23, 1996, Maritimes & Northeast 
Pipeline, L.L.C. (Maritimes & Northeast), c/o M&N Management Company, 
1284 Soldiers Field Road, Boston, Massachusetts, 02135, filed an 
application in Docket No. CP96-809-000. The application seeks authority 
under Section 7(c) of the Natural Gas Act (NGA) to construct, install, 
own, operate, and maintain a large-diameter natural gas pipeline which 
would connect to Maritimes & Northeast's proposed Phase I facilities 
near Wells, Maine and extend about 230 miles to a point near Woodland, 
Maine. Maritimes & Northeast also proposes to construct certain natural 
gas compression stations and other smaller diameter natural gas 
pipeline laterals and spurs. Maritimes & Northeast has also filed an 
application in Docket No. CP96-810-000 for a Presidential Permit and 
authority under Section 3 of the NGA to construct and operate certain 
international border facilities near Woodland, Maine and St. Stephen, 
New Brunswick, Canada. The details of Maritimes & Northeast's proposal 
are more fully set forth in the application which is on file with the 
Commission and open to public inspection.
    Specifically Maritimes & Northeast proposes to construct about 
229.6 miles of 24-inch and 1.8 miles of 30-inch mainline pipeline and 
two new mainline compressor stations. Each of the two proposed 
compressor stations will have a horsepower rating of 15,580. One is 
proposed to be located near Richmond, Sagadahoc County, Maine and the 
other is near Woodland, Washington County, Maine. Maritimes, & 
Northeast also proposes to build 154 miles of various pipeline laterals 
and meter stations in Maine near Cousins Island, Westbrook, Skowhegan, 
Bucksport, Oldtown and Millinocket, and Woodland. The total cost of 
these facilities is estimated to be $404 million.\1\
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    \1\ As part of the 1998 and 1999 Facilities discussed above, 
Maritimes & Northeast proposes to construct, install, own, operate 
and maintain ancillary above-ground appurtenant facilities, 
including but not limited to, mainline crossover and blowoff piping 
and valving, pressure regulating devices, gas metering equipment, 
cathodic protection devices, and launchers, receivers and associated 
piping and valves for internal inspection instruments and cleaning 
devices.
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    Maritime & Northeast is a limited liability company, organized and 
existing under the laws of the state of Delaware. Maritimes & 
Northeast's members are M&N Management Company, a wholly-owned 
subsidiary of PanEnergy Corp; Westcoast Energy (U.S.) Inc., a wholly-
owned subsidiary of Westcoast Energy, Inc. and Mobile Midstream Natural 
Gas Investment, Inc., a wholly-owned subsidiary of Mobile Oil 
Corporation.
    Maritimes & Northeast proposes to construct the facilities in two 
stages; the 42.1 miles of 24-inch pipeline from Wells, Maine to a point 
near Cumberland Center, Maine, the Cousins Island Lateral and the 
Westbrook Lateral would be constructed in 1998 (these facilities would 
cost about $63 million), and the remainder of the proposed facilities 
would be constructed in 1999 (these facilities would cost about $341 
million). Maritimes & Northeast says that the facilities will have a 
design delivery capacity of 440,000 MMBtu per day.
    Maritimes & Northeast says that the proposed facilities constitute 
Phase II of the Maritimes & Northeast Pipeline Project, a natural gas 
transportation facility for the Sable Offshore Energy Project (Sable 
Island). The Sable Island project is being developed by a consortium of 
United States and Canadian energy companies and is scheduled to make 
significant offshore supply available to eastern Canada and the 
northeastern United States in 1999. Maritimes & Northeast Pipeline 
Limited Partnership, a New Brunswick, Canada limited partnership 
consisting of Canadian affiliates of the members of Maritimes & 
Northeast, has filed an application with the Canadian National Energy 
Board requesting regulatory authorizations necessary to construct the 
Canadian portion of the Phase II facilities.
    Maritimes & Northeast says that the need for firm natural gas 
transportation capacity from Sable Island to the Maine, New Hampshire, 
Massachusetts and other northeastern markets is evidenced by the 
precedent agreements executed by the parties and included as Exhibit I 
to the application. Maritimes & Northeast says that these precedent

[[Page 54431]]

agreements were signed as a result of an open season it held on a non-
discriminatory basis from March 18, 1996 through April 17, 1996. From 
April 17, 1996 to June 30, 1996, Maritimes & Northeast says that it 
clarified the service requests and negotiated the terms and conditions 
of such services. In addition, Maritimes & Northeast continued to 
aggressively market to potential customers who did not participate in 
the open season with the understanding that open season participants 
returning executed precedent agreements by June 30, 1996, had first 
call on U.S. Facility capacity, and any remaining capacity would be 
contracted on a first-come, first-served basis. Thus, as of June 30, 
1996, seventeen shippers have now executed binding Precedent Agreements 
for long-term firm transportation service with Maritimes & Northeast, 
thus fully subscribing the propose design capacity of 440,000 MMBtu/d.
    The precedent agreements were filed as privileged and confidential 
under Section 388.112 of the Commission's regulations. Maritimes & 
Northeast however announced the names of its proposed shippers and 
volumes assigned to each shipper. Finally, Maritimes & Northeast says 
that Mobil Natural Gas Inc. (Mobil), an affiliate of Mobil and one of 
the major Sable Island producers, has executed a twenty-year backstop 
Precedent Agreement for all capacity that is not subject to service 
agreements entered into by other parties from the date of commencement 
of Phase II service. This includes all capacity made available in the 
future because of the termination of the precedent agreements or 
service agreements prior to the end of the period of twenty years from 
the date of commencement of Phase II service. However, Maritimes & 
Northeast will continue to try to market any and all capacity that 
becomes available in spite of Mobil's backstop agreement.
    Maritimes & Northeast says that the Phase II shippers will be 
ultimately responsible for obtaining the gas supplies to be transported 
through the Maritimes & Northeast facilities. Gas supplies needed for 
service through the 1998 Facilities will be available from the North 
American pipeline grid at negotiated prices. Maritimes & Northeast says 
that commencing November, 1999, all of the Phase II Facilities will be 
in service providing customers access to natural gas from Sable Island. 
Maritimes & Northeast also says that it has concurrently filed a 
request for blanket import and export authorization on behalf of its 
shippers and for itself for operational purposes with the Department of 
Energy, Office of Fossil Energy.
    Maritimes & Northeast says that the precise method of financing 
Phase II has not been determined, but that no financing impediments are 
anticipated. Maritimes & Northeast anticipates that 25% of the required 
capital will be furnished by the Members as equity and that 75% will 
consist of non-recourse or limited recourse debt, initially raised 
during the construction period primarily from commercial banks and/or 
insurance companies. Maritimes & Northeast assumes that both the 
construction and long-term debt will bear interest at the rate of eight 
percent (8.0%) and be retired over 20 years. Maritimes & Northeast also 
proposes that its equity investment earn at the rate of fourteen 
percent (14.0%).
    Maritimes & Northeast says that the proposed rates are straight-
fixed-variable (SFV) rates and reflect a roll-in of the Phase I costs. 
The rates are designed to recover the costs of the facilities proposed 
herein over the life of those facilities. Maritimes & Northeast says 
that the rates for interim service utilizing the 1998 Facilities will 
be rates negotiated at a level at or below the maximum rates for Phase 
I. The cost of all 1998 Facilities will be deferred and rolled into 
total system costs, after a credit (if any) for net revenues received 
from shippers using the 1998 Facilities, and will be used to develop 
the U.S. Facilities rates to be effective when the 1999 Facilities are 
placed in service.
    The proposed rates and charges for services proposed to be rendered 
by Maritimes & Northeast are set forth in its pro forma FERC Gas 
Tariff, included in Exhibit P of the application. Maritimes & Northeast 
requests authorization to charge the rates referenced above as its 
initial rates. Services proposed to be offered by Maritimes & Northeast 
include a 365-day firm transportation service (MN365), 151-day and 90-
day firm seasonal services (MN151 and MN90) and firm off-peak service 
(MNOP). Interruptible service will be available under Rate Schedule 
MNIT.
    Maritimes & Northeast says that the Phase II tariff, First Revised 
Volume No. 1, is based upon the Phase I tariff, with certain 
modifications to reflect the interconnection of the facilities of 
Maritimes & Northeast with the Canadian facilities at the international 
border and to reflect certain changes required by the Commission's July 
31, 1996, Preliminary Determination for Phase I.
    Maritimes & Northeast proposes that Rate Schedule MN365 be a 
recourse rate schedule for Phase II. Costs have been allocated to 
service under Rate Schedule MN365. Maritimes & Northeast proposes that 
Rate Schedules MN151, MN90 and MNOP be treated as negotiated rates, 
subject to the treatment accorded in Shell Gas Pipeline Company.\2\ 
Maximum and minimum rates are stated on the tariff rate sheets for each 
such rate schedule in accordance with Shell. Maritimes & Northeast will 
record each volume transported, billing determinant, rate component, 
surcharge, and revenue associated with its negotiated rates so that 
these may be filed and separately identified, and separately totaled, 
in all future rate case filings.
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    \2\ See Order Issuing Blanket Certificate in Docket No. CP96-
159-002 on July 31, 1996 at 76 FERC para. 61,126.
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    Finally, Maritimes & Northeast says that a uniform incremental 
lateral line rate has been developed for transportation on the laterals 
commencing in 1999. The lateral line rate is designed to ensure that 
customers regarding service on lateral lines will pay separate rates 
for that service reflecting certain of the costs of that service in 
addition to the mainline rate.
    Maritimes & Northeast says that the pipeline and lateral routes are 
environmentally sound and utilize existing rights-of-way corridors for 
approximately 64% of the route. Further, Maritimes & Northeast says 
that the environmental information provided in Exhibits F-I through F-
IV meets the technical requirements necessary for Commission Staff to 
begin an environmental analysis as defined in the Commission's August 
1995 ``Guidance Manual for Environmental Report Preparation''. However, 
Maritimes & Northeast has not provided the exact locations of the two 
compressor stations and the various above-ground facilities proposed in 
the application. The Commission Staff cannot establish a schedule for 
completion of the environmental impact statement until that information 
is received. Furthermore, the Draft Environmental Impact Statement can 
not be issued until after the cultural resources field investigation 
report, and the major river crossing plans (including the St. Croix 
River importation point proposed in Docket No. CP96-810-000) are filed 
and analyzed.
    Maritimes & Northeast also filed certain exhibits describing a 30-
inch single-pipe alternative that it seeks to construct from Dracut, 
Massachusetts to a proposed interconnection with the Portland Natural 
Gas Transmission System (PNGTS) near Portland Maine. Maritimes & 
Northeast says that its 30-inch single-pipe alternative is designed

[[Page 54432]]

to accommodate service to PNGTS (or other arrangements such as a joint 
pipeline or common right-of-way) and to meet the 1997 in-service 
requirements for Maritimes & Northeast's Phase I facilities. Maritimes 
& Northeast requests the Commission consider its 30-inch single-pipe 
alternative from Dracut to Portland in a timely manner in order that it 
may be approved, if selected as the most desirable alternative, in time 
for the 1997 Phase I commencement of service. However, the Commission 
has docketed as Docket No. CP96-178-002, the Dracut to Wells part of 
this request as an amendment to Maritimes & Northeast's Phase I 
application.\3\ The Commission Staff is unable to establish a schedule 
for this request unless Maritimes & Northeast files additional pipeline 
certificate exhibits concerning the amendment and further information 
about the specific nature of the shared use of a single pipeline or 
right-of-way.
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    \3\ The amendment was included in parts of the text and exhibits 
filed by Maritimes and Northeast in this filing, (Docket No. CP96-
809-000). The Commission will sever those parts of the text and 
exhibits and treat them as an amendment to Phase I. Hereafter, 
filings concerning the 30-inch single pipeline alternative for the 
distance from Dracut to Wells should be filed under Docket No. CP96-
178-002. Filings concerning the 30-inch pipeline alternative from 
Wells to Cumberland/Portland, Maine will be considered in this case, 
(Docket No. CP96-809-000).
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    Any person desiring to be heard or to make any protest with 
reference to said application should on or before November 4, 1996, 
file with the Federal Energy Regulatory Commission, 888 First Street, 
N.E., Washington, D.C. 20426, a motion to intervene or a protest in 
accordance with the requirements of the Commission's Rules of Practice 
and Procedure (18 CFR 385.214 or 385.211) and the regulations under the 
Natural Gas Act (18 CFR 157.10). All protests filed with the Commission 
will be considered by it in determining the appropriate action to be 
taken but will not serve to make the protestants parties to the 
proceeding. Any person wishing to become a party to a proceeding or to 
participate as a party in any hearing therein must file a motion to 
intervene in accordance with the Commission's rules.
    Take further notice that pursuant to the authority contained in and 
subject to the jurisdiction conferred upon the Commission by Sections 7 
and 15 of the Natural Gas Act and the Commission's Rules of Practice 
and Procedure, a hearing will be held without further notice before the 
Commission or its designee on this Application if no petition to 
intervene is filed within the time required herein or if the Commission 
on its own review of the matter finds that a grant of the application 
is required by the public convenience and necessity. If a petition for 
leave to intervene is timely filed, or if the Commission, on its own 
motion, believes that a formal hearing is required, further notice of 
such hearing will be given.
    Under the procedure herein provided for, unless otherwise advised, 
it will be unnecessary for Maritimes & Northeast to appear or be 
represented at the hearing.
Lois D. Cashell,
Secretary.
[FR Doc. 96-26768 Filed 10-17-96; 8:45 am]
BILLING CODE 6717-01-M