[Federal Register Volume 62, Number 60 (Friday, March 28, 1997)]
[Notices]
[Pages 14897-14898]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-7848]


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DEPARTMENT OF ENERGY
[Docket No. CP97-291-000]


Southern Natural Gas Company, Destin Pipeline Company, L.L.C.; 
Notice of Application

March 24, 1997.
    Take notice that on March 14, 1997, Southern Natural Gas Company 
(Southern), P.O. Box 2563, Birmingham, Alabama 35202-2563, and Destin 
Pipeline Company, L.L.C. (Destin), P.O. Box 2563, Birmingham, Alabama 
35202-2563, filed in Docket No. CP97-291-000 a joint application 
pursuant to Sections 7(c) and 7(b) of the Natural Gas Act for a 
certificate of public convenience and necessity to construct and 
operate certain pipeline measurement and related facilities in 
Franklin, Attala and Jefferson Counties, Mississippi; approval of 
Southern's abandonment of capacity by lease to Destin and Destin's 
acquisition thereof and pregranted abandonment and reacquisition of 
such capacity; and approval of rolled-in rate treatment for the 
capacity lease payments and revenues and cost-of-service of the 
proposed facilities, all as more fully set forth in the application 
which is on file with the Commission and open to public inspection.
    Destin states that in related Docket No. CP96-655-001, et al., 
Destin is seeking authorization to construct, own and operate one 
offshore platform, 76 miles of 36-inch offshore pipeline facilities, 
134 miles of 36-inch and 30-inch onshore pipeline facilities, two miles 
of 16-inch onshore pipeline facilities, two onshore compression 
facilities and related pipeline interconnection, measurement and 
appurtenant facilities, designed to transport large quantities of 
natural gas from deepwater areas and production along the Destin 
Corridor to downstream pipeline interconnections in southern and 
central Mississippi. Destin states that the Destin Pipeline will extend 
in a northerly direction from Main Pass Block 260, Gulf of Mexico, to 
an onshore terminus at its interconnection with Southern near 
Enterprise, Mississippi. In addition to Southern, Destin states that it 
will physically interconnect with four other interstate pipelines: 
Florida Gas Transmission Corporation, Transcontinental Gas Pipe Line 
Corporation, Tennessee Gas Pipeline Company and Koch Gateway Pipeline 
Company. In addition, related Docket No. CP96-655-001, et al., provides 
for two additional delivery points to Texas Eastern Transmission 
Corporation (Texas Eastern) in Mississippi. Accordingly, in Docket No. 
CP97-291-000, Southern and Destin propose for Southern to lease 
capacity on its pipeline system to Destin to enable Destin to offer 
Texas Eastern as a delivery point on its system.
    It is stated that Southern has agreed to lease to Destin, capacity 
on its pipeline system to the extent necessary to permit Destin to 
deliver up to 200 MMcf per day of natural gas (MMcfd) from an 
interconnection to be constructed between Destin's proposed pipeline 
system and Southern's pipeline at Southern's existing Enterprise 
compressor station in Clarke County, Mississippi to Texas Eastern (a) 
on a firm basis at a new meter station to be constructed by Southern at 
an interconnection with Texas Eastern on Southern's Cranfield-Gwinville 
Line in Franklin County, Mississippi (Union Church meter station) or 
(b) on an interruptible basis at Southern's existing interconnection 
with Texas Eastern downstream of Southern's Pickens compressor station 
on Southern's North Main Line in Attala County, Mississippi (Kosciusko 
meter station). Southern states that while it does not currently have 
an agreement with Texas Eastern for the proposed interconnection at the 
Union Church meter station, Southern will request such interconnection 
upon receipt of the authorization requested herein. It is stated that 
although Southern will continue to own and operate the facilities, 
Destin proposes to render open access transportation services to 
Destin's shippers by means of its leased capacity in Southern's system 
under the terms and conditions of Destin's FERC Gas Tariff, thus 
providing Destin with a seamless transportation service to its shippers 
without constructing duplicative facilities.
    Southern requests authorization to construct and install the Union 
Church meter station in Franklin County, Mississippi, which will 
consist of one measurement station with dual 8-inch rotary meters, 
including tap, metering and appurtenant facilities, sized to handle 200 
MMcfd on Southern's Cranfield-Gwinville Line; to modify its existing 
Gwinville compressor station on Southern's Franklin-Gwinville Lines in 
Jefferson County, Mississippi, to allow 200 MMcfd to flow west from 
Gwinville to the Union Church meter station; and to modify to its 
existing Kosciusko meter station on Southern's Second North Main Line, 
Attala County, Mississippi, to expand the delivery capacity into Texas 
Eastern to 200 MMcfd. It is stated that the total estimated cost of the 
facilities to be constructed is $1.7 million.

[[Page 14898]]

    The applicants state that in exchange for Southern's lease of 
capacity to permit Destin's delivery of 200 MMcfd to Texas Eastern, 
Destin will pay Southern $246,500 per year, for a total of $4,930,000 
over the twenty-year term of the lease. The applicants also request 
pregranted abandonment and reacquisition authorization upon termination 
of the Capacity Lease Agreement, with the reacquisition to be at no 
cost to Southern.
    Southern proposes in its next Section 4 rate proceeding to roll-in 
its cost of service for the proposed facilities and the revenue from 
the capacity lease payments and requests that the Commission approve 
such rate treatment. Destin also requests authorization for its lease 
payments made to Southern to be treated on a rolled-in basis with its 
cost of service proposed in Docket No. CP96-655-001, et al. Southern 
states that there will be no rate impact on Southern's current shippers 
as a result of rolling-in the cost of service of the proposed 
facilities because the estimated revenues generated from the lease 
payments received from Destin will equal the estimated cost of service 
of the proposed facilities on a net present value basis. Destin 
estimates that the rate impact of rolling-in the lease payments to 
Southern will be less than 1 percent. In addition, the applicants state 
that there will be financial and operational benefits to be realized 
from the lease arrangements and proposed facilities.
    Specifically, the applicants request authorization for the 
following actions: (1) for Southern to construct, install and operate 
(a) a new meter station at an interconnection with Texas Eastern on 
Southern's Cranfield-Gwinville Line in Franklin County, Mississippi, 
(b) modification to Southern's existing Gwinville compressor station in 
Jefferson County, Mississippi, (c) modification to Southern's existing 
Kosciusko meter station in Attala County, Mississippi; (2) for Southern 
to abandon by lease, and Destin to acquire, capacity on Southern's 
system to the extent necessary to permit Destin to deliver 200 MMcfd of 
natural gas to Texas Eastern on a firm basis at the Union Church meter 
station or on an interruptible basis at the Kosciusko meter station; 
(3) authorization for Southern to charge Destin lease payments in an 
amount designed to collect the incremental cost of service of the 
proposed facilities over the 20-year term of the Lease Agreement on a 
present value basis; (4) a determination that the costs attributable to 
the proposed facilities and the revenues attributable to the lease 
payments received shall be included in Southern's cost of service and 
revenues on a rolled-in basis in any future rate proceedings; (5) a 
determination that in any rate proceeding concerning Southern's 
transportation rates, the revenue responsibility of the capacity lease 
services proposed in this application shall be limited to that 
collected by charging the lease payments authorized herein and no 
additional costs shall be allocated to these services during the term 
of the Lease Agreement; (6) a determination that the lease payments 
made by Destin to Southern shall be included in Destin's cost of 
service on a rolled-in basis in any future rate proceeding; and (7) 
pre-granted abandonment and reacquisition of the leased capacity upon 
termination of the Capacity Lease Agreement between the parties.
    The applicants request an order by June 1, 1997, which is the date 
by which Destin has requested a Preliminary Determination on Non-
environmental Matters in related Docket No. CP96-655-001, et al. so 
that the proposed pipeline project and the facilities proposed herein 
can be placed in service by July 1, 1998.
    Any person desiring to be heard or to make any protest with 
reference to said application should on or before April 14, 1997, file 
with the Federal Energy Regulatory Commission, 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 
18 CFR 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 jurisdiction conferred upon the Federal Energy 
Regulatory 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 motion to intervene is filed within the time 
required herein, if the Commission on its own review of the matter 
finds that a grant of the certificate is required by the public 
convenience and necessity. If a motion 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 duly given.
    Under the procedure herein provided for, unless otherwise advised, 
it will be unnecessary for Southern and Destin to appear or be 
represented at the hearing.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 97-7848 Filed 3-27-97; 8:45 am]
BILLING CODE 6717-01-M