[Federal Register Volume 66, Number 28 (Friday, February 9, 2001)]
[Notices]
[Pages 9697-9699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-3349]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. CP01-76-000, CP01-77-000, and RP01-217-000]


Cove Point LNG Limited Partnership; Notice of Application and 
Notice of Rate Settlement

February 5, 2001.
    Take notice that on January 30, 2001, Cove Point LNG Limited 
Partnership (Cove Point), P.O. Box 1396, Houston,

[[Page 9698]]

Texas 77251, filed applications pursuant to Section 7(c) [Docket No. 
CP01-76-000] and Section 3(a) [Docket No. CP01-77-000] of the Natural 
Gas Act (NGA) seeking approval to construct certain new facilities, and 
to reactivate and operate certain existing facilities at Cove Point's 
liquefied natural gas (LNG) terminal located in Calvert County, 
Maryland. Cove Point proposes to provide open access LNG tanker storage 
services to customers with waterborne supplies of LNG. Cove Point also 
filed in Docket No. RP01-217-000, a Stipulation and Agreement (Rate 
Settlement) pursuant to Rule 602 of the Commission's Rules (18 CFR 
385.602) which was reached among itself, certain existing LNG peaking 
and transportation customers, and the new proposed waterborne LNG 
customers. The Rate Settlement would set initial rates for proposed new 
customers pursuant to Section 7(c) of the NGA, and would change 
existing rates for existing customers pursuant to Section 4 of the NGA. 
Take notice of the special Rule 602 comment procedures in this case, as 
set forth below.
    The filing may be viewed at http://www.ferc.fed.us/online/rims.htm 
(call 202-208-2222 for assistance). Questions regarding the details of 
this proposed project and Rate Settlement should be directed to 
Virginia C. Levenback, Senior Counsel, Cove Point LNG Limited 
Partnership and Williams Cove Point LNG Company, L.L.C., P.O. Box 1396, 
Houston, Texas 77251-1396; Telephone: (713) 215-2810.
    In the late 1970's and through 1980, the LNG facilities now owned 
by Cove Point were used for waterborne, imported LNG, but LNG imports 
ceased and the facilities were ``mothballed''. In 1994, Cove Point was 
authorized by the Commission to reactivate the mothballed onshore LNG 
facilities and to construct an LNG liquefaction unit for the purpose of 
storing domestic natural gas during the summer for use at peak times 
during the winter. Now Cove Point seeks to reactivate the offshore LNG 
facilities and build additional onshore facilities in order to provide 
waterborne LNG tanker services once again. These waterborne shipments 
of LNG will in all likelihood be imported, but the importation of LNG, 
per se, is subject to the jurisdiction of the Department of Energy 
under Section 3 of the NGA (10 CFR 590).
    Cove Point requests Commission approval to repair, improve, 
upgrade, or replace various existing unloading, control, LNG flow, 
vaporization, and safety systems. Cove Point is seeking a certificate 
under Section 7(a) of the NGA, and Part 157 of the Commission's 
regulations, (18 CFR Part 157) to reactivate, repair or replace the 
following existing facilities:

Refurbishment/Replacement of unloading arms;
Refurbishment of offshore control building;
Refurbishment/upgrade of hazard detectors;
Refurbishment/upgrade of fire detectors;
Refurbishment/upgrade of electrical systems;
Refurbishment/upgrade of offshore fire water systems;
Refurbishment/upgrade of second stage send out pumps;
Refurbishment of cold blowers;
Refurbishment of insulator systems;
Upgrade and expand office buildings;
Refurbishment of fuel gas system and heaters;
Upgrade fire protection on all LNG storage tanks; and
Refurbishment of vaporizers (including the replacement of tube 
bundles).

Cove Point is also seeking a certificate to construct the following new 
facilities:

Installation of a fifth new 850,000-barrel LNG storage tank (2,800,000 
Dth vapor equivalent);
Installation of Btu reduction facility; and
Installation of a Cove Point metering station.

Cove Point states that the proposed reactivation of the LNG 
terminalling operation is estimated to cost about $65 million, and the 
construction of the fifth storage tank is estimated to cost about $38 
million.

    Cove Point seeks approval to provide the LNG tanker services on a 
firm and interruptible basis pursuant to Part 284 of the Commission's 
regulations and under proposed new Rate Schedules LTD-1 and LTD-2, 
respectively. Cove Point proposes to offer open-access, non-
discriminatory LNG tanker services, which would include the receipt of 
waterborne LNG, LNG storage, LNG vaporization, and pipeline 
transportation of vaporized LNG into the interstate pipeline grid 
through Cove Point's pipeline's existing interconnections with Dominion 
Transmission Inc., and Columbia Gas Transmission Company in Loudoun 
County, Virginia.
    Cove Point says that it had an open season in early 2000 to offer 
LNG tanker services and as a result it executed binding precedent 
agreements for one hundred percent (100%) of the firm LNG tanker 
services that was offered at the maximum rate and for twenty year 
primary terms with three customers. The three customers are BP Energy 
Company, Shell NA LNG, Inc., and El Paso Merchant Energy, L.P. Cove 
Point states that a firm LNG tanker services customer will contract for 
and pay a monthly reservation fee based upon its Maximum Daily Delivery 
Quantity (MDDQ). The total available MDDQ offered by Cove Point in its 
open season was 750,000 Dth per day, and the three winning bidders were 
awarded the entire available delivery quantity, each receiving 250,000 
Dth per day. Cove Point states that the customers are allocated LNG 
storage capacity based on fixed ratio of storage capacity to contracted 
MDDQ.
    Cove Point currently provides 10-day, 5-day and 3-day firm LNG 
peaking services under Rate Schedules FPS-1, FPS-2, and FPS-3, 
respectively, and firm and interruptible transportation services under 
Rate Schedules FTS and ITS. The peaking services now consist of the 
receipt and liquefaction of domestic natural gas during a summer 
injection season (April 16-December 14), storage of the LNG, 
vaporization of the LNG and delivery of the natural gas during a winter 
withdrawal season (December 15-April 15).
    After approval of the waterborne LNG reactivation and the firm and 
interruptible LNG tanker services under proposed new Rate Schedules 
LTD-1 and LTD-2, Cove Point will continue to provide 3-day, 5-day and 
10-day peaking services to its peaking customers under existing Rate 
Schedules FPS-1, FPS-2 and FPS-3. With the commencement of waterborne 
LNG receipts, however, Cove Point will operate its facilities on an 
integrated basis, which will enable Cove Point to serve existing 
peaking and transportation customers at lower rates due to the expected 
discontinued operation of its LNG liquefaction facilities. Those 
reduced rates will be placed into effect upon the commencement of the 
proposed LNG tanker services pursuant to the terms of a Stipulation and 
Agreement (Rate Settlement) among Cove Point, certain of the existing 
peaking and transportation customers and three new LNG tanker services 
customers, all as identified in the Rate Settlement. The Rate 
Settlement is submitted pursuant to Rule 602 of the Commission's Rules 
of Practice and Procedure (18 CFR 385.602).
    Cove Point states that the Rate Settlement resolves certain non-
environmental issues related to this application, including agreed-upon 
rates for both LNG tanker services, peaking services, and 
transportation services. The Rate Settlement addresses how Cove Point's 
existing and proposed tanker discharge, storage and

[[Page 9699]]

transportation capacity and the costs the facilities that create such 
capacity will be allocated between its existing and new customers. The 
specific rates for new and existing customers proposed in the Rate 
Settlement are listed as an appendix to the Rate Settlement (Exhibit U 
of Cove Point's application), and in Exhibit P of Cove Point's 
application. The Rate Settlement also allows for inclusion of the costs 
of for certain pipeline line enhancements listed as an appendix to the 
Rate Settlement, including the planned construction of an 
interconnection with Transcontinental Gas Pipe Line Corporation in 
Fairfax County, Virginia.
    Cove Point's application also includes a pro forma copy of the 
revised FERC Gas Tariff under which Cove Point will provide firm and 
interruptible LNG tanker services on an open access basis and the 
continuance of its LNG peaking and transportation services. The 
proposed pro forma tariff includes new rate schedules for firm and 
interruptible LNG tanker discharging services, minor conforming changes 
to the rate schedules of existing services, changes to the General 
Terms and Conditions and conforming changes to pro forma service 
agreements. Changes to Cove Point's currently effective tariff sheets 
are reflected in the redlined version of the proposed tariff which is 
included in Exhibit P of Cove Point's application.
    In addition, Cove Point seeks authorization to construct, site, and 
modify the import facilities at the terminal in Calvert County, 
Maryland under Section 3(a) of the NGA, and Part 153 of the 
Commission's regulations, 18 CFR Part 153.
    Cove Point requests that the Commission issue a final order 
granting the requested certificates, approvals and authorizations by 
July 25, 2001. Cove Point states that this proposed schedule will 
enable it to refurbish and reactivate the above listed LNG facilities 
by April 1, 2002, and to construct and place in service the proposed 
fifth LNG storage tank at the terminal by September 1, 2003.
    There are three ways to become involved in the Commission's review 
of this project. First, any person wishing to obtain legal status by 
becoming a party to the proceedings for this project should, on or 
before February 27, 2001, file with the Federal Energy Regulatory 
Commission, 888 First Street NE., Washington, DC 20426, a motion to 
intervene 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 NGA (18 CFR 157.10). A person obtaining party 
status will be placed on the service list maintained by the Secretary 
of the Commission and will receive copies of all documents filed by the 
applicant and by all other parties. A party must submit 14 copies of 
filings made with the Commission and must mail a copy to the applicant 
and to every other party in the proceeding. Only parties to the 
proceeding can ask for court review of Commission orders in the 
proceeding.
    However, a person does not have to intervene in order to have its 
comments considered. The second way to participate is by filing with 
the Secretary of the Commission, as soon as possible, an original and 
two copies of comments in support of or in opposition to this project. 
The Commission will consider these comments in determining the 
appropriate action to be taken, but the filing of a comment alone will 
not serve to make the filer a party to the proceeding. The Commission's 
rules require that persons filing comments in opposition to the project 
provide copies of their protests only to the party or parties directly 
involved in the protest.
    Persons who wish to comment only on the environmental review of 
this project should submit an original and two copies of their comments 
to the Secretary of the Commission. Environmental commenters will be 
placed on the Commission's environmental mailing list, will receive 
copies of the environmental documents, and will be notified of meetings 
associated with the Commission's environmental review process. 
Environmental commenters will not be required to serve copies of filed 
documents on all other parties. However, the non-party commenters will 
not receive copies of all documents filed by other parties or issued by 
the Commission (except for the mailing of environmental documents 
issued by the Commission) and will not have the right to seek court 
review of the Commission's final order.
    A third way to participate is to file initial and/or reply comments 
about the Rate Settlement under Rule 602 of the Commission's Rules of 
Practice and Procedure (18 CFR 385.602). However, in this case, because 
of the commonality of Cove Point's requests in the above referenced 
dockets, the prescribed time for such initial and reply comments under 
Section 385.602(f)(2) is hereby set such that initial comments on the 
Rate Settlement must be filed with the Secretary on or before February 
27, 2001, and reply comments must be filed with the Secretary on or 
before March 14, 2001. The date of March 14, 2001, should coincide with 
the date by which any appropriate answers to motions to intervene or 
other motions must be filed in accordance with the requirements of the 
Commission's Rules of Practice and Procedure (18 CFR 385.213).
    The Commission may issue a preliminary determination on non-
environmental issues prior to the completion of its review of the 
environmental aspects of the project. This preliminary determination 
typically considers such issues as the need for the project and its 
economic effect on existing customers of the applicant, on other 
pipelines in the area, and on landowners and communities. For example, 
the Commission considers the extent to which the applicant may need to 
exercise eminent domain to obtain rights-of-way for the proposed 
project and balances that against the non-environmental benefits to be 
provided by the project. Therefore, if a person has comments on 
community and landowner impacts from this proposal, it is important 
either to file comments or to intervene as early in the process as 
possible.
    Comments and protests may be filed electronically via the Internet 
in lieu of paper. See, 18 CFR 385.2001(a)(1)(iii) and the instructions 
on the Commission's web site at http://www.ferc.fed.us/efi/doorbell.htm.
    If the Commission decides to set the application for a formal 
hearing before an Administrative Law Judge, the Commission will issue 
another notice describing that process. At the end of the Commission's 
review process, a final Commission order approving or denying the 
certificate and authorization, and accepting or rejecting the Rate 
Settlement will be issued.

David P. Boergers,
Secretary.
[FR Doc. 01-3349 Filed 2-8-01; 8:45 am]
BILLING CODE 6717-01-M