01-2066. Trailblazer Pipeline Company; Notice of Application

January 18, 2001.

On January 10, 2001, Trailblazer Pipeline Company (Trailblazer), 747 East 22nd Street, Lombard, Illinois 60148, filed in Docket No. CP01-64-000 an application pursuant to section 7 of the Natural Gas Act (NGA) and the Commission's Rules and Regulations for a certificate of public convenience and necessity authorizing Trailblazer to construct and operate facilities that would expand its transportation capacity from Colorado to Nebraska in order to provide 324,000 Dth/d of new firm, long-term transportation service commencing July 2002.^[1] Trailblazer is proposing that incremental rates be established for the proposed expansion facilities and is seeking approval for pro forma tariff provisions that would establish a fuel tracker applicable to any volumes charged the expansion rates, all as more fully set forth in the application which is on file with the Commission and open to public inspection. The filing may be viewed at http://www.ferc.fed.us/​online/​rims.htm (call 202-208-2222 for assistance).

Trailblazer proposes to: (1) Install two new 10,000 site-rated horsepower gas-fired compressor units at a site specified as Compressor Station 601 in Logan County, Colorado, (2) install two new 10,000 horsepower electric compressor units at a site specified as Compressor Station 603 in Kearney County, Nebraska, (3) expand one existing electric compressor unit from 5,200 horsepower to 10,000 horsepower, and (4) install one new electric 10,000 horsepower unit at existing Compressor Station 602 in Lincoln County, Nebraska. Trailblazer estimates that the compression will cost approximately $58.5 million.

Trailblazer asserts that the proposed expansion is a result of the growth in demand for Rocky Mountain natural gas supplies from existing market centers served by Natural Gas Pipeline Company of America (Natural) and Northern Natural Gas Company (Northern) and other pipelines connected to those two interstate pipeline systems. Based on an open season that was held from August 7 to August 18, 2000, Trailblazer has signed binding precedent agreements for service on Trailblazer between its existing receipt point at Rockport and its delivery point at Beatrice with the following expansions shippers:

Shipper name	Quantity (Dth/d)
Western Gas Resources, Inc	57,500
Enron North America Corp	41,000
CMS Energy Marketing Services and Trading Company	100,000
Barrett Resources Corp	70,000
Devon Energy Production Co	33,000
Pennaco Energy, Inc	22,500
Total	324,000

Trailblazer discloses that the six expansion shippers have signed agreements that call for fixed rates for the entire term of their respective agreements. According to Trailblazer such fixed-rate contracts constitute negotiated rates pursuant to General Terms and Conditions (GT&C) section 38 of Trailblazer's FERC Gas Tariff. As required by the Commission's regulations, Trailblazer proposes separate recourse rates for firm services along the expansion facilities. For the reservation rate, Trailblazer proposes a rate of $3.5931/Dth and a commodity rate of $0.0038/Dth. Trailblazer based its firm recourse rate on a cost of service of $14.4 million and the expansion volume of 324,000 Dth. Trailblazer states that it utilized a 5.0 percent depreciation rate and a pre-tax return of 13.99 percent. Trailblazer noted that it is not proposing any change to the rates charged for interruptible transportation service under Rate Schedule ITS. Additionally, Trailblazer proposes an initial fuel retention factor of 3.2 percent for the expansion shippers. Trailblazer submitted pro forma tariff provisions in the certificate proceeding proposing a separate fuel tracker mechanism for the expansion shippers. This fuel tracker mechanism would adjust the 3.2 percent retention factor on an annual basis.

Trailblazer proposes an in-service date of July 2002 and requests that a certificate be issued by July 2001. According to Trailblazer the proposed timing will allow sufficient time for the pouring of concrete foundations and the construction of the compressor buildings prior to the start of the winter season.

Questions regarding the details of this proposed project should be directed to Mr. James J. McElligott, at [phone], or in writing to his attention at Trailblazer Gas Transmission Company, 747 East 22nd Street, Lombard, Illinois 60148.

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 February 8, 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 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 a certificate will be issued.

David P. Boergers,

Secretary.

Footnotes

1.  Trailblazer is a general partnership consisting of Kinder Morgan Trailblazer, LLC, CGT Trailblazer (both subsidiaries of Kinder Morgan Operating, L.P.) and Enron Trailblazer Pipeline Company, a subsidiary of Enron Corp. Trailblazer indicates that if the requested certificate authority in Docket No. CP01-64-000 is granted and accepted then CIG Trailblazer Gas Company will join the Trailblazer partnership.