[Federal Register Volume 62, Number 239 (Friday, December 12, 1997)]
[Notices]
[Page 65421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32506]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission
[Docket No. RP98-83-000]


Texas Eastern Transmission Corporation; Notice of Petition for 
Declaratory Order

December 8, 1997.
    Take notice that on December 3, 1997, Texas Eastern Transmission 
Corporation (Texas Eastern) tendered for filing a petition under Rule 
207 of the Commission's Rules of Practice and Procedure (18 CFR 
385.207) requesting that the Commission determine whether Public 
Service Electric and Gas Company (Public Service) is permitted to 
employ the Commission's capacity release regulations to abrogate its 
long-term contractual obligations to Texas Eastern by assigning those 
contracts to a wholly-owned, shell subsidiary where the assignment is 
for the express purpose of avoiding Public Service's contractual 
obligations.
    Texas Eastern states that Public Service recently filed a plan with 
the New Jersey Board of Public Utilities under which Public Service 
proposes to set up a new shell subsidiary with no assets and then to 
permanently assign all of its contracts with Texas Eastern to that 
subsidiary. Public Service will continue to control all of the 
activities of its new subsidiary and Public Service employees will 
perform all of the activities of its subsidiary. Texas Eastern quotes 
Public Service as having stated that the purpose of the new subsidiary 
is to ``reduce the potential fixed cost responsibility'' of Public 
Service under the contracts. Texas Eastern submits that Public Service 
has no contractual right to terminate its obligations to Texas Eastern 
by assigning them to a shell subsidiary.
    Texas Eastern states that Public Service's plan is based entirely 
upon Public Service's interpretation of the Commission's capacity 
release regulations, which Public Service alleges limit its obligations 
to three months worth of demand charges.
    Texas Eastern contends that the capacity release by Public Service 
is a sham transaction to abrogate its Texas Eastern contracts, which 
still have a total aggregate revenue stream in excess of $750 million 
during their remaining primary term. Texas Eastern argues that Public 
Service's plan will have serious consequences, both of Texas and for 
the interstate pipeline industry. Texas Eastern alleges that, if Public 
Service is allowed to avoid its existing obligations, other shippers 
who find a contract burdensome will assign that contract to an under-
capitalized subsidiary and allow the subsidiary to default on the 
contract.
    Texas Eastern states that it is not attempting to preclude Public 
Service form assigning its contracts to the new subsidiary. Texas 
Eastern says that it is only seeking to assure that Public Service will 
not be released from liability as a consequence of such an assignment.
    Texas Eastern states that this Commission has jurisdiction to grant 
this relief first because of the Commission's jurisdiction over 
capacity release as it applies to Texas Eastern and its tariff and 
second, because the Commission has direct jurisdiction over Public 
Service's capacity release activities.
    Any person desiring to be heard or to protest said filing should 
file a motion to intervene or protest with the Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC, 20426 in 
accordance with Sections 385.214 and 385.211 of the Commission's 
Regulations. All such motion or protests must be filed on or before 
January 5, 1998. All protests filed with the Commission will be 
considered by the Commission 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 this proceeding, 
must file a motion to intervene. Copies of this filing are on file and 
are available for public inspection in the Public Reference Room.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 97-32506 Filed 12-11-97; 8:45 am]
BILLING CODE 6717-01-M