[Federal Register Volume 64, Number 52 (Thursday, March 18, 1999)]
[Notices]
[Pages 13418-13419]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6559]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket No. CP99-238-000]
Granite State Gas Transmission, Inc.; Notice of Petition for A
Declaratory Order
March 12, 1999.
Take notice that on March 5, 1999, Granite State Gas Transmission,
Inc. (Granite State), 300 Friberg Parkway, Westborough, Massachusetts
01581, filed a Petition for Declaratory Order (Petition) pursuant to
Rule 207(a)(2) of the Commission's Rules of Practice and Procedure (18
CFR 385.207(a)(2)) requesting the Commission to confirm that Granite
State may charge its local distribution company affiliate, Northern
Utilities, Inc. (Northern Utilities), a contractually authorized exit
fee. This fee would be in consideration for releasing Northern
Utilities from its contractual obligation for a liquefied natural gas
(LNG) storage and vaporization service which would be provided by
Granite State's proposed LNG facility in Wells, Maine, all as more
fully set forth in the Petition which is on file with the Commission
and open to public inspection. This filing may be viewed at http://
www.ferc.fed.us/online/rims.htm. (Call (202) 208-222 for assistance.)
Granite State says that it received a certificate of public
convenience and necessity (certificate) in Docket No. CP96-610-000 on
May 27, 1998 (83 FERC Sec. 61,194), to construct and operate a 2 Bcf
LNG storage and vaporization facility in Wells, Maine (Wells) which was
designed to provide peaking gas deliveries exclusively for Northern
Utilities' distribution systems in Maine and New Hampshire for a 20-
year term. Granite State asserts that it undertook the LNG project in
accordance with a Precedent Agreement (Agreement) with Northern
Utilities to which had attached a LNG Storage Contract (Contract) that
Northern Utilities was obligated to execute after Granite State
received the certificate. According to Granite State, the Maine and New
Hampshire Public Utilities Commissions (PUCs) had approved Northern
Utilities' plans to acquire peaking gas supplies from the
[[Page 13419]]
LNG facilities pursuant to the provisions of the Agreement and
Contract, and that the PUCs supported Granite State's application in
Docket No. CP96-610-000.
Granite State further states that prior to the issuance of the
certificate, Northern Utilities surveyed potential alternate suppliers
for sources of peaking gas deliveries and the proposals it received
were less advantageous than the Granite State LNG peaking service on
the basis of cost, supply security, contract flexibility and supplier
viability. Granite State says that after it accepted the certificate,
Northern Utilities conducted another survey for potential alternate
suppliers of peaking gas service. According to Granite State, Northern
Utilities had made commitments to the state regulatory commissions that
it would undertake further solicitations from alternate peaking
suppliers after the certificate was issued.
Granite State says that Northern Utilities' post-certificate
solicitations for peaking service from other potential suppliers and
sources resulted in proposals for pipeline deliveries by marketers
having capacity on the joint pipeline facilities owned and operated by
Portland Natural Gas Transmission Systems (PNGTS) and Maritimes &
Northeast Pipeline LLC (Maritimes) which, on a cost basis, were more
advantageous than the projected cost of the Granite State LNG service.
Granite State also says that Northern Utilities negotiated two
contracts with Distrigas of Massachusetts Corporation (DOMAC) for
supplemental LNG, delivered either in the form of vapor or by tanker
truck to Northern Utilities' markets. According to Granite State,
Northern Utilities concluded that the combination of the post-
certificate proposals for pipeline deliveries of peak shaving supplies
and the supplemental LNG supplied by the two DOMAC contracts would
provide an alternative to the granite State LNG storage and
vaporization service that would better meet Northern Utilities' cost
and non-cost requirements for peaking services.
Granite State requests the Commission in this Petition to confirm
that Granite State may charge Northern Utilities an exit fee for
releasing Northern Utilities from the Contract. This fee will recover
the costs of land purchases, facilities engineering, environmental
engineering, non-engineering consulting, legal representation,
allowance for funds used during construction (AFUDC) and the
Commission's outside environmental contractors totaling $11,589,138
which will be amortized over a 10-year period with carrying costs.
These costs are estimated through May 31, 1999. The exit fee will be
based on actual costs.
Granite State asserts that the alternatives to peak shaving service
provided by the Granite State LNG facility were so much more
advantageous to Northern Utilities' customers that Northern Utilities
requested to be released from its obligation to execute the Contract,
acknowledging that the Contract obligated that Northern Utilities to
reimburse Granite State for the costs it incurred with respect to the
Wells LNG project and in obtaining the various regulatory approvals,
including the Certificate.
Granite State further says that Northern Utilities has advised
Granite State that the cost savings accruing to its customers from the
alternate peak shaving supplies and contracts for supplemental LNG will
amount to approximately $17-18 million over a ten-year period on a net
present value basis, after reimbursing Granite State for $11.6 million
over the same period.
Granite State says that NO TANKS, INC. (NO TANKS), a citizens group
opposed to the location of the LNG facility in Wells, has petitioned
the U.S. Circuit Court for the D.C. Circuit to review the Commission's
order issuing the Certificate. Granite State and NO TANKS have agreed
to a settlement, contingent upon Commission approval of Granite State's
Petition. Granite State further says that in the settlement, NO TANKS
agrees to support Granite State's Petition request and also to withdraw
its appeal, and granite State agrees to forego the project in its
entirety if the Commission acts favorably on this Petition by June 1,
1999.
Any person desiring to be heard or to make any protest with
reference to said Petition should on or before April 2, 1999, 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 385.211 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. Any person wishing to
become a party in any proceeding herein must file a motion to intervene
in accordance with the Commission's rules.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 99-6559 Filed 3-17-99; 8:45 am]
BILLING CODE 6717-01-M
