01-20330. Kern River Gas Transmission Company; Notice of Application

August 8, 2001.

Take notice that on August 1, 2001, Kern River Gas Transmission Company (Kern River), 295 Chipeta Way, Salt Lake City, Utah 84158, filed in Docket No. CP01-422-000 an abbreviated application pursuant to Section 7(c) and 7(b) of the Natural Gas Act (NGA) and Part 157A of the Federal Energy Regulatory Commission's (Commission) regulations, for: (1) A certificate of public convenience and necessity authorizing Kern River to construct and operate the additional facilities needed to expand its transportation capacity from Opal, Wyoming to delivery points primarily in California by an additional 885,626 Mcf per day in order to provide up to approximately 906,626 Dth per day of long-term, incremental firm, year round transportation service commencing May 1, 2003 (2003 Expansion); (2) permission and approval to abandon certain facilities that will be replaced by the proposed expansion facilities; (3) approval of levelized, incremental 10-year and 15-year term transportation rates for the 2003 Expansion, associated incremental compressor fuel factors and surcharges, and related tariff sheets; and (4) approval of regulatory asset/liability accounting for differences between book and regulatory depreciation resulting from the proposed levelized rate design and approval of Kern River's proposed accounting treatment for a contribution in aid of construction (“CIAC”) integral to the 2003 Expansion design, all as more fully set forth in the application which is on file with the Commission and open to public inspection. Copies of this filing are on file with the Commission and are available for public inspection. This filing may also be viewed on the web at http://www.ferc.gov using the “RIMS” link, select “Docket#” and follow the instructions (call 202-208-2222 for assistance).

Specifically, Kern River states that it proposes to construct and operate:

(1) Approximately 634.3 miles of 36-inch pipeline to loop Kern River's existing Opal Lateral in Wyoming and about 92% of Kern River's existing mainline (in 11 loops) from Wyoming, through Utah and Nevada, to California;

(2) Approximately 82.4 miles of 42-inch pipeline to loop part of the existing mainline that Kern River jointly owns with Mojave Pipeline Company (Mojave) in California;

(3) Three new mainline compressor stations—the Coyote Creek Compressor Station in Uinta County, Wyoming; the Salt Lake Compressor Station in Salt Lake County, Utah; and the Dry Lake Compressor Station in Clark County, Nevada;

(4) Turbine-driven compressor unit additions, upgrades and/or modifications at four existing compressor stations—the Muddy Creek Compressor Station in Lincoln County, Wyoming; the Fillmore Compressor Station in Millard County, Utah; the Veyo Compressor Station in Washington County, Utah; and the Goodsprings Compressor Station in Clark County, Nevada;

(5) Replacement of the turbine-driven compressor units at the existing Elberta Compressor Station in Utah County, Utah;

(6) Reconfiguration of the existing Daggett Compressor Station to compress only Mojave volumes, with a consequent derating of the electric motor-driven compressor unit;

(7) An approximate 0.8 mile extension of the existing 12-inch Anschutz Lateral to establish an additional mainline tie-in point on the suction side of the proposed Coyote Creek Compressor Station;

(8) Upgrades and modifications of five meter stations—the Opal Meter Station in Lincoln County, Wyoming; the PG&E-Daggett and Daggett Meter Stations in San Bernardino County, California; and the Wheeler Ridge and Kern Front Meter Stations in Kern County, California; and

(9) Various mainline block valves, launcher/receiver facilities and other appurtenances.

Kern River states that the proposed compression additions, upgrades, replacements and modifications will add a net total of 163,700 (ISO rated) horsepower to the Kern River system and that the additional compression and pipeline loops will more than double Kern River's existing summer day design capacity, increasing it from 845,500 Mcf per day (upon completion of the amended 2002 Kern River Expansion Project approved in Docket No. CP01-31-001) to approximately 1,731,126 Mcf per day.

Kern River states that the estimated total cost of the proposed 2003 Expansion facilities, including a proposed $6.25 million CIAC, is approximately $1.26 billion and that for incremental rate design purposes, the 2003 Kern River Expansion Project is allocated approximately $12 million of costs attributable to the 21,000 Mcf per day of California Action Project and 2002 Kern River Expansion Project capacity that is incorporated into the design of the 2003 Expansion upon expiration of the short-term California Action Project service authorized in Docket No. CP01-106-000.

According to Kern River, the proposed initial daily incremental transportation rates for the 2003 Expansion, on a 100% load factor basis and exclusive of fuel, are $0.6997 per Dth for 10-year firm service and $0.5675 per Dth for 15-year firm service. Kern River states that in each case, the rate is comprised of a $0.0573 volumetric charge and a reservation charge for the remainder.

In addition, Kern River states that the 2003 Expansion shippers will be responsible for providing reimbursement of the incremental mainline compressor fuel, both gas and electric, attributable to the expansion. According to Kern River, the proposed initial incremental gas fuel in-kind reimbursement factors by compressor station aggregate to 3.05% for receipts for transportation from Opal to California, with lower aggregate rates for shorter transportation paths. Kern River states that the initial incremental electric fuel surcharge for 2003 Expansion deliveries to points downstream of Daggett is proposed to be $0.0042 per Dth.

Kern River states that it has executed eighteen long-term transportation service agreements under Rate Schedule KRF-1 with seventeen shippers, for a total of 902,626 Dth per day of expansion capacity from Opal, Wyoming to delivery points primarily in California, commencing May 1, 2003. According to Kern River, approximately 85% of the capacity is contracted for 15 years and the remainder for 10 years—over 95% of the capacity has primary delivery points in California, with the flexibility to access secondary delivery points upstream in Nevada and Utah. Kern River states that based upon representations made by the expansion shippers, nearly all of the capacity is projected to be used to serve existing and new power generation markets in California and Nevada.

Any questions regarding this application should be directed to Gary Kotter, Manager, Certificates, Kern River Gas Transmission Company, P.O. Box 58900, Salt Lake City, Utah 84158-0900, at [phone] or fax [phone].

There are two 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 August 29, 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 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.

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, protests and 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 under the “e-Filing” link.

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 a certificate will be issued.

David P. Boergers,

Secretary.