[Federal Register Volume 61, Number 94 (Tuesday, May 14, 1996)]
[Notices]
[Pages 24299-24300]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11986]
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DEPARTMENT OF ENERGY
[Docket No. CP-96-385-000]
Columbia Natural Resources, Inc.; Notice of Petition for
Declaratory Order
Take notice that on April 29, 1996, Columbia Natural Resources,
Inc. (CNR),\1\ P.O. Box 6070, Charleston, West Virginia 25362-0070,
filed in Docket No. CP96-385-000 a petition pursuant to Section 16 of
the Natural Gas Act (NGA) and Rule 207(a)(2) of the Commission's Rules
of Practice and Procedure (18 CFR 385.207(a)(2)), for a declaratory
order disclaiming Commission jurisdiction over certain facilities,
operations, rates and the services provided through the facilities, all
as more fully set forth in the petition which is on file with the
Commission and open to public inspection.
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\1\ CNR is a wholly-owned subsidiary of the Columbia Gas System,
Inc.; headquartered in Charleston, West Virginia; and incorporated
in Texas and licensed to do business in the States of Illinois,
Indiana, Kentucky, Maryland, Michigan, New York, Ohio, Pennsylvania,
Virginia and West Virginia. CNR performs all the oil and gas
drilling and production operations of The Columbia Gas System, Inc.,
in the Eastern United States. CNR owns an interest in over 6,500 oil
and gas wells and has total acreage holdings of more than 2.3
million acres. Approximately two-thirds of CNR's natural gas
production flows through the facilities subject to CNR's petition.
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CNR seeks a declaratory order from the Commission finding that
certain certificated and uncertificated natural gas gathering
facilities, and the ownership and operation of those facilities,
proposed to be acquired from Columbia Gas Transmission Corporation
(Columbia) would not be subject to the jurisdiction of the Commission
under the NGA upon transfer of the facilities.\2\ CNR seeks a
determination that the Commission's authority to regulate rates under
Sections 4 and 5 of the NGA does not extend to CNR's gathering system
as it is proposed to be operated.
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\2\ A companion application was filed by Columbia in Docket No.
CP96-386-000 for authorization to abandon the certificated portion
of the facilities by sale to CNR.
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CNR states that the facilities are located in Fayette and Somerset
Counties, Pennsylvania; Dickenson, Tazewell and Buchanan Counties,
Virginia; Pike, Knott, Breathitt, Magoffin, Floyd, Johnson, Lawrence,
Letcher and Martin Counties, Kentucky; and Kanawha, Boone, Cabell,
Logan, Putnam, Wyoming, Raleigh, Fayette, Mercer, McDowell, Mingo,
Wayne and Lincoln Counties, West Virginia. CNR describes the facilities
as eighteen gathering systems composed of ``web-type'' or ``backbone''
configurations of lines that are of a size and operated at pressures
consistent with the gathering function, located in a production area,
upstream of processing facilities, and gather gas from receipt points
for subsequent delivery to Columbia's transmission lines or to other
points of delivery on the gathering system.
CNR asserts that the individual elements of the ``Modified Primary
Function'' Test, when applied to these
[[Page 24300]]
eighteen gathering systems, demonstrate that these Facilities would
perform a gathering function in CNR's possession. The following
statements are those of CNR.
(1) Length and Diameter of the Lines--Although it is difficult to
generalize about so many lines, it is clear that the great majority of
these lines are small diameter, short lines, consistent with the
configuration of gathering area lines. While some lines are larger than
the 2.375'' to 8.625'' lines which predominate, or greater than a mile
in length, such lines do not exceed a size or a length appropriate for
a gathering function in similar circumstances, e.g., to transport gas
gathered from other lines either directly or indirectly to transmission
lines.
(2) Extension Beyond a Central Point in the Field--Unlike other
production areas such as those in the Southwest, the ``central point in
the field test'' is not generally applicable to those systems, given
the unique geography and development of the Appalachian gathering area.
Therefore, this test provides little guidance in determining the
primary function of Appalachian gathering systems such as those under
consideration here.
(3) Location of Compressors and Processing Plants--There are no
processing plants upstream of these Facilities, and only twelve
compressors on these eighteen gathering systems. Those twelve
compressors are either field boosters which are necessary to move gas
over these low pressure systems, or compress the gas for entry into
transmission lines.
(4) Geographic Configuration--An examination of the maps contained
in Exhibits Z and Z1 of Columbia's abandonment application shows that
these Facilities form a ``web-type'' or ``backbone'' configuration and
are located in a production area where they function as a production
area gathering network.
(5) Location of Wells--Each of these eighteen gathering systems
collects gas from wells at production area receipt points located along
or throughout each system.
(6) Operating Pressure of the Lines--The operating pressure of the
lines is low, typically less than 100 psig, and in all cases entirely
consistent with a gathering facility characterization in these low
pressure production areas.
(7) Purpose, Location and Operation of the Facilities--The
facilities are located in a production area, and used to provide
gathering service by their present owner and operator. Even the few
facilities functionalized on Columbia's books of account as
transmission either now perform a gathering function or would do so
when owned and operated by CNR.
(8) The Owner's General Business Activity--CNR, the proposed owner
of these Facilities, would be a gatherer, not an interstate
transporter, of gas. It intends to have no jurisdictional transmission
facilities. Therefore, these Facilities would be gathering facilities
after the proposed transfer.
CNR states that it would operate the facilities as an independent
gas gatherer to provide gas gathering and related services on an open
access, nonjurisdictional, nondiscriminatory basis to all customers.
CNR states that no existing shipper on any of these eighteen gathering
systems would be faced with any reduction or loss of gathering service.
CNR explains that it intends to provide substitute nonjurisdictional
alternatives to the service provided by Columbia in connection with its
transportation service under certain rate schedules in Columbia's
Second Revised Volume No. 1 FERC Gas Tariff. Further, CNR would attempt
to negotiate new gathering agreements with Columbia's shippers.
However, if CNR is unable to reach agreement with an existing gathering
shipper, CNR would offer such existing shippers a default contract
under which they would continue to be able to receive gathering service
for a two-year period, under rates, terms and conditions consistent
with those under which Columbia currently provides these gathering
services. Proposed default gathering contracts would be submitted if
the parties were unable to negotiate mutually agreeable arrangements.
CNR advises that Columbia currently utilizes certain of the
Facilities to deliver gas scheduled under Rate Schedules FTS, NTS,\3\
and SST to Mountaineer Gas Company (Mountaineer) and Columbia Gas of
Kentucky, Inc. (CKY), at Town Border Stations. CNR plans to provide
nonjurisdictional direct delivery service to Mountaineer and CKY, after
the proposed sale. Negotiations are progressing with these two local
distribution companies for the development of agreements for such
service by CNR.
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\3\ Only Mountaineer receives NTS service.
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CNR advises that, in addition to direct delivery service at Town
Border Stations, Columbia utilizes many of the Facilities to also
deliver gas to certain Mainline Tap Consumers served by these local
distribution companies and by Columbia Gas of Pennsylvania, Inc. These
Mainline Tap Consumers are attached directly to Columbia gathering
lines and, typically, are found in areas which are remote from the
nearest measured distribution system and may own land over which
Columbia's gathering lines have been laid. Upon the transfer of the
Facilities to CNR, deliveries to these Mainline Tap Consumers would be
continued by CNR on a nonjurisdictional basis.
CNR further advises that, in the companion application filed in
Docket No. CP96-386-000, Columbia proposes to abandon two Points of
Delivery at exchange points on the Facilities with CNG Transmission
Corporation under Columbia's Rate Schedule X-35 and X-84. However, the
remaining exchange points under these rate schedules would not be
affected by the proposed transfer of the Facilities to CNR and exchange
services would continue to be provided under Rate Schedules X-35 and X-
84.
CNR also advises that Ashland Exploration, Inc., delivers gas from
its own production into Columbia's Canada (P-28) Gathering System. Some
of that gas is delivered to approximately 170 customers of Ashland
located on that system. CNR intends to work with Ashland to develop an
appropriate replacement, if necessary, for the service currently
provided by Columbia.
Any person desiring to be heard or to make any protest with
reference to said petition should on or before May 20, 1996, 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 384.214 or
385.211) 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 to a proceeding or to participate as a party in any
hearing therein must file a motion to intervene in accordance with the
Commission's Rules.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 96-11986 Filed 5-13-96; 8:45 am]
BILLING CODE 6717-01-M