01-7105. El Paso Natural Gas Company; Notice of Amendment

March 16, 2001.

Take notice that on March 15, 2001, El Paso Natural Gas Company (El Paso), Post Office Box 1492, El Paso, Texas 79978, filed in Docket No. CP00-422-001 an amendment to its pending application filed in Docket No. CP00-422-000, to (1) issue an order by March 31, 2001, permitting El Paso to initiate the cleaning and modification of its Line 2000, (2) delete the portion of the application to abandon the six existing mainline compressor facilities comprising a total of 119,750 horsepower, and (3) authorize by April 15, 2001, the proposal to expand the design capacity of El Paso's interstate transmission system by approximately 230,000 Mcf per day, all as more fully set forth in the application to amend which is on file with the Commission an open to public inspection. This filing may be viewed on the web at http://www.ferc.fed.us/​online/​htm (call 202-208-2222 for assistance).

El Paso states that the requested authority will facilitate an in-service date of August 31, 2001, which will enable El Paso to place an expansion of its system into service in a time frame that would help this year to ameliorate the California energy crisis. El Paso also states that it will accept the full risk for the Line 2000 Project by agreeing to place the Line No. 2000 Project in service as a loop to the existing system and to continue to operate the existing South System compression without additional contracts to cover its operating and investment costs.

El Paso indicates that on July 31, 2000, it filed its Section 7 application in Docket No. CP00-422-000 for the Line 2000 Project, a project to acquire and convert a crude oil transportation pipeline to natural gas transportation service. El Paso states that the essence of the Line No. 2000 Project as originally filed was to replace old horsepower on its South System with pipeline, but with no increase in the existing transportation capacity of its transmission system.

El Paso now states that, since the time El Paso reformulated and prepared its original application, there has been a radical change in the dynamics of the natural gas market in California, with California experiencing greatly increased prices in both the gas and electricity markets, and consumers being subjected to power alerts and, on occasion, rolling blackouts. It is stated that electric power supplied by surrounding states has been inadequate to resolve the crisis that continues in California, which is expected by many to peak during the upcoming summer season. It is indicated that much of the power generated within California and the surrounding states depends on the availability of natural gas as fuel for the generation facilities.

El Paso states that on December 13, 2000, El Paso Corporation addressed publicly the dramatic changes in the energy use of the Western United States in a letter from Williams A. Wise, its President and Chairman, to the Commissioners of the FERC, and committed to pursue the addition of pipeline capacity into the California market over the next few years.

El Paso believes that the Commission has also been actively exploring ways in which it can assist in ameliorating the power crisis in California, pointing out, for example, a January 3, 2001, letter from the Office of Energy Projects sent to El Paso inquiring as to the feasibility of modifying the Line 2000 Project in manner that could assist the difficult situation now confronting the California gas market. El Paso indicates that it responded to the letter by stating that it would be willing to expand its system if there is sufficient support for such expansion.

El Paso submits that the energy crisis in California remains unabated, and the market has sent signals indicating a need for additional volumes of gas to serve growing electric generation needs in the Southwest. El Paso states that, against this backdrop, it has further evaluated the steps it can take today to improve the conditions for all parties operating in the California market. With the primary goal in mind of providing market relief as quickly as possible, El Paso has developed a multi-part plan, listing as the heart of the plan the immediate conversion of the Line 2000 Project from a compression replacement project to an expansion project.

El Paso describes in plan as follows:

Part One—Recontracting Existing Capacity

El Paso states that it has approximately 1.22 Bcf per day of capacity under contracts to El Paso Merchant Energy Company (EPME) which expires on May 31, 2001, subject to EPME having right of first refusal on that capacity. El Paso indicates that, in recognition of the current California energy crisis, it held an open season for this capacity from January 12, through February 12, 2001. El Paso states that it received 148 bids for a total of 14.4 Bcf per day of capacity, but awarded 121 bids pending the February 22, 2001, deadline of EPME matching the bids. It is indicated that the 121 bids fully subscribed the 1.22 Bcf per day of capacity at the posting, at terms ranging from 17 months to 15 years and at the maximum California reservation rate. El Paso advised that EPME did not match any of the bids, and El Paso entered into the transportation service agreements for the total 1.22 Bcf per day of capacity.

Part Two

El Paso advises that the authorization requested in this amendment constitutes Part Two. El Paso advises that as soon as the Line 2000 Project is placed into service, including the 230,000 Mcf per day of incremental capacity in the daily scheduling of gas on the system. El Paso states that this increment of capacity will be utilized as system flexibility capacity and would serve to reduce daily allocations of capacity on the system in times of maintenance, outages, and force majeure events. El Paso also states that it would not require specific new firm transportation service agreements for such capacity but instead would use it as a cushion to meet the demands for gas in the California market in the markets east of California where natural gas is used to generate power that is exported to California. El Paso also submits that the additional capacity would offset the reduction in capacity that could otherwise be experienced as a result of the extraordinary maintenance activities planned for the coming summer months.

Part Three

El Paso has posted on its electronic bulletin board an open season for further system expansion projects timed to meet the needs of potential shippers. El Paso indicates that this open season, which closes on March 23, 2001, provides potential shippers an opportunity to express their non-binding interest in firm transportation service to support additional expansions of the El Paso system.

Any questions regarding the amendment should be directed to Robert T. Tomlinson at [phone].

Any person desiring to be heard or to make any protest with reference to said application should on or before March 30, 2001, file with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 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 and 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 in any proceeding herein 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 Secretary of the Commission and will receive copies of all documents filed by the applicant and by every one of the 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. Commenters 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 intervenor status.

Take further notice that, pursuant to the authority contained in and subject to the jurisdiction conferred upon the 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 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 El Paso to appear or to be represented at the hearing.

Also, comments, protest, or interventions 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.

Linwood A. Watson, Jr.,

Acting Secretary.