[Federal Register: March 18, 1999 (Volume 64, Number 52)] [Notices] [Page 13418-13419] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr18mr99-67] ----------------------------------------------------------------------- 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