[Federal Register Volume 65, Number 144 (Wednesday, July 26, 2000)]
[Notices]
[Pages 45970-45972]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-18852]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. CP00-404-000


Texas Eastern Transmission Corporation; Notice of Application

July 20, 2000.
    Take notice that on July 13, 2000, Texas Eastern Transmission 
Corporation (Texas Eastern), 5400 Westheimer Court, Houston, Texas 
77056-5310, filed an application in Docket No. CP00-404-000 pursuant to 
Section 7(c) of the Natural Gas Act (NGA) seeking a certificate of 
public convenience and necessity (i) to uprate the maximum allowable 
operating pressure (MAOP) of its existing Line No. 1-A in the 
Philadelphia area, and to construct, own, operate, and maintain certain 
facilities to render a firm lateral transportation service for up to 
84,000 Dekatherms per day (Dth/d) of natural gas for PG&E Energy 
Trading--Power; L.P. (PGET), and Liberty Electric Power, LLC (LEP), and 
(ii) to establish a Section 7(c) initial recourse rate for the 
incremental facilities proposed herein, all as more fully set forth in 
the application which is on file with the Commission and open to public 
inspection. This filing may be viewed on the web at http://www.ferc.us/online/rims.htm (call 202-208-2222 for assistance).
    Texas Eastern states that the name address, and telephone number of 
the person to whom correspondence and communication concerning this 
application should be addressed is: Steven E. Tillman, Director of 
Regulatory Affairs, Texas Eastern Transmission Corporation, P.O. Box 
1642, Houston, Texas 77251-1642, (713) 627-5113, (713) 627-5947 (FAX).
    In addition, Texas Eastern requests, pursuant to Section 4 of the 
NGA and Section 29 of the General Terms and Conditions (GT&C) of its 
FERC Gas Tariff, approval of the negotiated rates for the services 
described more fully herein.
    Texas Eastern states that it intends to provide firm transportation 
for PGET and LEP at the Liberty electric generating plant (Columbia 
Liberty Plant), which is a 567.7 megawatt gas-fired electric power 
plant being developed by, and to be owned by, LEP in the Borough of 
Eddystone, Delaware County, Pennsylvania. In order to provide this 
service, Texas Eastern proposes to expand its existing Philadelphia 
Lateral system to make available 84,000 dth/d of firm transportation 
capacity required to fuel the Columbia Liberty Plant. Texas Eastern 
proposes to install one 4,000 horsepower (hp) electric compressor at 
its existing Eagle Compressor Station site (Eagle Station), replacing, 
in situ, various segments of the existing 20-inch Line No. 1-A 
pipeline, uprating the operating pressure of the 20-inch Line No. 1-A, 
and constructing approximately 0.6 miles of 12-inch pipeline and 
associated metering facilities, to establish the connection with the 
Columbia Liberty Plant.
    According to Texas Eastern, the 0.6 mile lateral pipe will extend 
from milepost (MP) 3.2 on Texas Eastern's 16-inch Line No. 1-A to a 
proposed tie-in point within the Columbia Liberty Plant (Liberty 
Lateral). Texas Eastern also proposes to construct a meter station at 
the interconnection between the proposed Liberty Lateral and the 
Columbia Liberty Plant. In addition, at the interconnection of the 
proposed Liberty Lateral and Texas Eastern's 16-inch Line No. 1-A, 
Texas Eastern proposes to construct new aboveground valve and piping 
facilities to be located within the existing rights-of-way (ROW). The 
new facilities will also include a 4,000 hp electric driven compression 
unit at Texas Eastern's existing Eagle

[[Page 45971]]

Station and associated piping, valves, and instrumentation facilities 
which will provide the compression necessary for the proposed service.
    Texas Eastern states that prior to developing the scope of work for 
the expansion proposed herein, Texas Eastern conducted an in-line 
inspection of its existing 20-inch Line No. 1-A. Based on the 
evaluation of that inspection, Texas Eastern proposes to replace 
certain pipeline anomaly segments identified on its existing 20-inch 
Line No. 1-A. Texas Eastern states that all of these replacements will 
be in-situ. Subsequent to the replacements, Texas Eastern states that 
it will perform a hydrostatic test of approximately 22.7 miles of the 
20-inch Line No. 1-A between Eagle Station located at MP 0.0 in Chester 
County, Pennsylvania, and Chester Junction located at MP 22.7 in 
Delaware County, Pennsylvania. According to Texas Eastern, this 
hydrostatic test will allow for an increase in the MAOP of the 20-inch 
Line No. 1-A from 400 psig to 656 psig. It is stated that this increase 
in MAOP, together with installation of the other proposed facilities, 
is required to accommodate deliveries to the Columbia Liberty Plant at 
LEP's required delivery pressure of 500 psig.
    Texas Eastern states that the cost of the proposed facilities is 
estimated to be approximately $21.5 million. Texas Eastern further 
states that the facilities proposed herein will be constructed in 
compliance with the Natural Gas Pipeline Safety Act of 1968, and 
operated in accordance with federal safety codes applicable to gas 
transmission pipelines.
    According to Texas Eastern, LEP will own and operate the Columbia 
Liberty Plant. To market the plant's electric output, LEP has entered 
into a Tolling Agreement with PGET, pursuant to which LEP will sell its 
energy output to PGET for a term of approximately 14.5 years subject to 
extension and early termination under certain circumstances. Texas 
Eastern states that under the Tolling Agreement, PGET has the right to 
purchase and market 100% of the electricity generated by the Columbia 
Liberty Plant except under certain limited circumstances. It is stated 
that for the term of the Tolling Agreement, PGET will also be the fuel 
manager for the Columbia Liberty Plant. Texas Eastern contends that 
following the expiration or other termination of the Tolling Agreement, 
LEP intends to procure its own gas supply for delivery to the Columbia 
Liberty plant under the Lateral Service Agreement to support its 
operation of the Columbia Liberty Plant as a ``merchant'' generating 
facility. Texas Eastern states that LEP is obligated under the Tolling 
Agreement to commence delivery of power to PGET by April 1, 2002.
    Texas Eastern states that the Lateral Service Agreement provides 
for the firm lateral transportation service of up to a maximum daily 
quantity (``MDQ'') of 84,000 Dth/d for a primary term of 25 years. It 
is stated that the proposed service will fully utilize the capacity 
that will result from the construction of facilities proposed herein. 
The primary receipt point under the Lateral Service Agreement will be 
at Texas Eastern's existing Eagle Station, and the primary delivery 
point will be at the downstream terminus of the proposed Columbia 
Liberty Lateral at the interconnection with the Columbia Liberty Plant. 
Texas Eastern states that the Lateral Service Agreement is a lateral-
only service; PGET and LEP will have no rights under this FT-1 service 
agreement to receive service on any portion of Texas Eastern's system 
other than the Philadelphia Lateral facilities. Texas Eastern further 
states that service under the Lateral Service Agreement will be 
provided at a negotiated rate. According to Texas Eastern, the executed 
precedent agreement and Lateral Service Agreement demonstrate that the 
Columbia Liberty Project is being built for a specific new market and 
will not rely on subsidies from existing customers. Texas Eastern 
states that these agreements are submitted as evidence of the benefits 
of this project pursuant to the Commission's Statement of Policy on 
Certificating New Interstate Pipeline Facilities \1\ (``Policy 
Statement'').
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    \1\ Certification of New Interstate Natural Gas Pipeline 
Facilities, 88 FERC para. 61,227 (1999) and, Order Clarifying 
Statement of Policy, 90 FERC para. 61,128 (2000).
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    Texas Eastern states that in conjunction with the Lateral Service 
Agreement, PGET, LEP and Texas Eastern have entered into, as an 
essential component of this transaction, the Mainline Service 
Agreement, which is a Rate Schedule FT-1 service agreement for mainline 
service in Market Zone M3 on a secondary basis. This mainline Zone M3 
service allows for secondary firm transportation rights in Texas 
Eastern's Zone M3 at a negotiated rate. It is stated that this service 
was required by PGET and LEP and is intended for utilization only 
during those periods and to the extent that the Columbia Liberty Plant 
is not operating at full load. According to Texas Eastern, this service 
will allow LEP and PGET to have secondary access to other Zone M3 
markets in order to have the opportunity to sell gas that is not needed 
at the Columbia Liberty Plant. It is stated that this service applies 
to gas that already is being transported on the mainline and would be 
subsequently transported down the lateral under the Lateral Service 
Agreement, absent the Columbia Liberty Plant not operating at full 
load. Since the Mainline Service Agreement provides secondary only 
transportation rights, Texas Eastern states that there is no firm 
capacity reserved for the Mainline Service Agreement. Because no firm 
capacity is reserved for this service agreement, Texas Eastern contends 
that it did not award this contract under its net present value 
allocation mechanism included in Section 3.12 of the GT&C of Texas 
Eastern's FERC Gas Tariff. Although Texas Eastern does not believe it 
is required, to the extent the Commission deems necessary, Texas 
Eastern requests a waiver of Section 3.12 of the GT&C of Texas 
Eastern's FERC Gas Tariff for the award of the Mainline Service 
Agreement.
    Texas Eastern states that a separate negotiated rate agreement was 
executed for the Mainline Service Agreement, and is designed to reflect 
the purpose for which the parties entered into the agreement which is 
solely to mitigate demand charge costs at times when the Columbia 
Liberty Plant is not operating at full load. Specifically, the 
negotiated rate for the Mainline Service Agreement is limited to a 
total aggregate quantity of 84,000 Dth/d being delivered under the 
Mainline Service Agreement and the Lateral Service Agreement. According 
to Texas Eastern, this is designed to ensure that on any given day not 
more than 84,000 Dth/d (the MDQ of the Lateral Service Agreement) is 
transported at the negotiated rates for the lateral service and/or the 
secondary mainline service. These secondary rights will allow PGET and 
LEP to utilize secondary transportation rights only in Zone M3 after 
existing customers' primary firm transportation entitlements have been 
scheduled and will not have an adverse impact on Texas Eastern's 
ability to meet its primary firm service obligations.
    Texas Eastern states that PGET and LEP will obtain its own gas 
supply. Through the Texas Eastern system, PGET and LEP will have access 
to gas supplies attached to the North American pipeline grid. Texas 
Eastern states that natural gas will be delivered to the Columbia 
Liberty Project facilities at the upstream terminus of the Philadelphia 
Lateral facilities, by acquisition of capacity through capacity 
release, by utilizing interruptible capacity or by

[[Page 45972]]

third-party deliveries under other service agreements.
    Texas Eastern proposes to establish an NGA Section 7(c) initial 
recourse rate, which is a cost based and separately stated incremental 
reservation rate equal to $4.461 per Dth per month under Texas 
Eastern's Rate Schedule FT-1 for the lateral only service to PGET and 
LEP. Texas Eastern contends that this rate has been designed using 
Texas Eastern's incremental cost-of-service for this project and is 
shown on the Pro Forma Rate Schedule FT-1 tariff sheets. Texas Eastern 
states that it will maintain a separate record of capital costs for 
this project in its book of accounts.
    Notwithstanding the foregoing, PGET, LEP and Texas Eastern have 
agreed to negotiated rates for both of the services described herein, 
in accordance with and pursuant to the negotiated rate authority 
contained in Section 29 of the GT&C of Texas Eastern's FERC Gas Tariff. 
Texas Eastern states that included in Exhibit P to its application are 
tariff sheets which identify the negotiated rate agreements. In 
addition, Texas Eastern states that it included a copy of each 
negotiated rate agreement in Exhibit I to its application. Texas 
Eastern requests that the proposed tariff sheets detailing the 
negotiated rate transactions with PGET and LEP be approved as part of 
the certificate issued in this proceeding. Texas Eastern requests 
waiver of Section 154.207 of the Commission's regulations to allow for 
this effective date. Texas Eastern submits that good cause exists for 
granting this waiver, as the negotiated rate agreements are integral 
components of this proposal. According to Texas Eastern, the tariff 
sheets filed herewith affirm that the actual negotiated rate agreements 
do not deviate in any material respect from the form of service 
agreement. Finally, Texas Eastern states that the accounting treatment 
for negotiated rates will be consistent with Section 29 of the GT&C of 
Texas Eastern's FERC Gas Tariff.
    Since the costs of the proposed facilities will be recovered 
through the proposed incremental rate, Texas Eastern states that the 
project will have no adverse impact on existing customers. Texas 
Eastern states that the project is financially viable without subsidies 
from Texas Eastern's existing customers, thus meeting the threshold 
requirements established in the Commission's Policy Statement.
    Texas Eastern states that the Columbia Liberty Plant is currently 
being constructed and is scheduled to take initial test gas commencing 
September 1, 2001. Texas Eastern requests that the Commission issue a 
Preliminary Determination on the non-environmental aspects of its 
proposal by January 1, 2001 and that a final certificate be issued on 
before March 1, 2001. Texas Eastern stated that LEP has informed it 
that since the Columbia Liberty Plant is currently under construction, 
significant capital commitments for long lead-time construction items 
have been made and that receipt of a final certificate by March 1, 2001 
is critical. According to Texas Eastern, Issuance of a Preliminary 
Determination and the authorizations requested herein by January 1, 
2001 and March 1, 2001, respectively, will provide LEP with assurance 
regarding connection to the gas grid, which is necessary to fuel the 
Columbia Liberty Plant and enable LEP to continue to pursue 
construction and related activities required to meet the September 1, 
2001 schedule for test gas for the Columbia Liberty Plant.
    Any person desiring to be heard or to make protest with reference 
to said application should on or before August 10, 2000, file with the 
Federal Energy Regulatory Commission, 888 First Street, NE, 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 385.211 or 385.214) 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. The 
Commission's rules require that protestors provide copies of their 
protests to the party or parties directly involved. 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.
    A person obtaining intervenor status will be placed on the service 
list maintained by the Commission and will receive copies of all 
documents issued by the Commission, filed by the applicant, or filed by 
all other intervenors. An intervenor can file for rehearing of any 
Commission order and can petition for court review of any such order. 
However, an intervenor must submit copies of comments or any other 
filing it makes with the Commission to every other intervenor in the 
proceeding, as well as 14 copies with the Commission.
    A person does not have to intervene, however, in order to have 
comments considered. A person, instead, may submit two copies of 
comments to the Secretary of the Commission. Commeters will be placed 
on the Commission's environmental mailing list, will receive copies of 
environmental documents and will be able to participate in meetings 
associated with the Commission's environmental review process. 
Commenters will not be required to serve copies of filed documents on 
all other parties. However, commenters will not receive copies of all 
documents filed by other parties or issued by the Commission and will 
not have the right to seek rehearing or appeal the Commission's final 
order to a federal court.
    The Commission will consider all comments and concerns equally, 
whether filed by commenters or those requesting intervener status.
    Take further notice that, pursuant to the authority contained in 
and subject to jurisdiction conferred upon the Commission by Sections 7 
and 15 of the NGA 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 Texas Eastern to appear or be represented at 
the hearing.

David P. Boerger,
Secretary.
[FR Doc. 00-18852 Filed 7-25-00; 8:45 am]
BILLING CODE 6717-01-M