[Federal Register Volume 64, Number 209 (Friday, October 29, 1999)]
[Notices]
[Pages 58387-58389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-28324]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
[Docket Nos. CP00-6-000, CP00-7-000, and CP00-8-000]
Gulfstream Natural Gas System, L.L.C.; Notice of Applications for
Certificates
October 25, 1999.
Take notice that on October 15, 1999, Gulfstream Natural Gas
System, L.L.C. (Gulfstream or Applicant), 500 Renaissance Center,
Detroit, Michigan 48243, filed an application in Docket No. CP00-6-000
pursuant to and in accordance with Section 7(c) of the Natural Gas Act
(NGA) and the optional certificate procedures of Part 157(E) of the
Federal Energy Regulatory Commission's (Commission) regulations, for a
certificate of public convenience and necessity authorizing the
construction and operation of natural gas pipeline facilities. On that
same date Gulfstream filed in Docket No. CPP00-7-000 for a blanket
certificate of public convenience and necessity to render firm and
interruptible transportation services on an open access basis pursuant
to Part 284(G) of the Commission's regulations and for approval of
initial rates. Also, Gulfstream requests in Docket No. CP00-8-000 the
issuance of a blanket certificate of public convenience and necessity
under Part 157(F) of the Commission's regulations authorizing certain
facility construction, operation and abandonment, all as more fully set
forth in the applications which are on file with the Commission and
open to public inspection. This filing may be viewed on the web at
http://www.ferc.us/online/rims.htm (call 202-208-2222 for assistance).
Any questions regarding the application should be directed to Mr.
Richard H. Leehr, Vice President, Gulfstream Natural Gas System,
L.L.C., 500 Renaissance Center, Detroit, Michigan 48243, or call (313)
496-3679.
Consistent with Section 157.102(b) of the Commission's regulations,
Gulfstream requests that its application be considered under the
optional procedures of part 157(E) and agrees to comply with all terms
and conditions specified in Section 157.103.
Gulfstream requests that the Commission issue a preliminary
determination on the non-environmental aspects of this proposal by
April 15, 2000, and a final order granting the authorizations requested
herein by February 2001. Gulfstream states that this timing is
necessary to allow construction of the project can commence no later
than June 2001 and be completed prior to June 2002, the proposed-in-
service date for this project.
Gulfstream states that it does not currently own pipeline
facilities and is not currently engaged in any natural gas
transportation operations. Upon acceptance of the certificate requested
in this application and commencement of operations, Gulfstream states
that it will become a ``natural gas company'' within the meaning of
Section 2(6) of the NGA and, as such, will be subject to the
jurisdiction of the Commission.
Gulfstream states that the State of Florida is experiencing a
substantial increase in the demand for electric power, which has led to
an increasing need for natural gas as the fuel of choice for generating
such power. Gulfstream contends that Florida will require more than
9,600 megawatts of generating capacity, equivalent to approximately 2
Bcf per day (Bcf/d) of natural gas demand, by the year 2007 to meet the
needs of its growing population. To meet this need for natural gas,
Gulfstream proposes to construct, own and operate approximately 744
miles of natural gas pipeline of varying diameter to transport up to
1.13 Bcf/d of natural gas from supply areas in Alabama and Mississippi
across the Gulf of Mexico to new incremental markets in central and
eastern Florida. It is stated that Gulfstream will serve electric
utilities, gas distribution companies, municipalities and independent
power generators. The project will include one compressor station, six
gas receiving and sixteen delivery meter stations, a pressure regulator
station, mainline valves, and other associated facilities, including
pig launching and receiving facilities. Gulfstream estimates that the
[[Page 58388]]
total capital cost of constructing the pipeline and appurtenant
facilities will be $1,653,934,142.
Gulfstream states that its system consists of three interrelated
geographic components: (1) Supply area facilities in Alabama and
Mississippi; (2) transmission facilities in the gulf of Mexico; and (3)
pipeline facilities located in and serving the State of Florida.
In the supply area, Gulfstream proposes several interconnections.
In Alabama, Gulfstream proposes to interconnect with the Dauphin Island
Gathering Partners (DIGP) 20-inch pipeline system, and with the Mobile
Bay Processing Partners' Plant (known as the ``DIGP Plant'').
Gulfstream also proposes Alabama interconnections with Mobil's Mary Ann
Plant, Williams' Mobile Bay Processing Plant, and Koch-Gateway Pipeline
Company. In Mississippi, Gulfstream proposes to interconnect with the
Pascagoula Gas Processing Plant (known as the ``Destin Plant'') which
is operated by Amoco. Through the Koch-Gateway Interconnection, and the
Destin and Williams' Plant connections, Gulfstream states that shippers
will have access to several interstate natural gas pipeline systems.
According to Gulfstream, the six receipt points are designed to
provide measurement capacity, in the aggregate, of approximately 2.2.
Bcf/d, thus creating substantial flexibility for shippers acquiring gas
supply to fully utilize the 1.13 Bcf/d of pipeline capacity. Gulfstream
states that this gas supply will be commingled and transported to a
central compressor station in Mobile County, Alabama (Station 100). It
is stated that the compressor station will consist of 120,000-ISO rated
horsepower (hp) of compression (three operating 30,000-ISO hp units
plus one stand-by unit \1\). Gulfstream states that once compressed,
the gas will be transported across the Gulf of Mexico using
approximately 429.6 miles of 36-inch pipeline (Line 200), ending
onshore at Station 200, a pressure regulator station in Manatee County,
Florida.
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\1\ Gulfstream intends to use the stand-by unit to enhance
system reliability. The stand-by unit will only be used for back-up
compression in the event of outages in other units.
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Downstream of Station 200, Gulfstream proposes to construct a
pipeline system that traverses Manatee, Hardee, Polk, Osceola,
Highlands, Okeechobee, Martin and St. Lucie Counties and terminates in
Palm Beach County, Florida. Gulfstream contends that the Florida
mainline totals 173.3 miles of pipe and consists of Line 300 (46.2
miles of 36-inch pipe), Line 500 (89.4 miles of 30-inch pipe), and Line
700 (37.7 miles of 24-inch pipe). It is stated that three delivery
meter stations (Nos. 505, 515, and 700) are located directly off of
this mainline. In addition, it is stated that the mainline feeds four
laterals, two of which include ``sublaterals'' that connect directly to
specific plant sites. Gulfstream states that these lateral total 70.8
miles of pipe and are comprised of Line 330 (9.1 miles of 24-inch
pipe), in Hardee and Polk Counties, Line 400 in Polk County (33.4 miles
of 30-inch pipe), Line 600 (22 miles of 24-inch pipe), in Martin and
St. Lucie Counties and Line 710 (6.1 miles of 16-inch pipe) in Palm
Beach County. Lastly, the sublaterals include 41.7 miles of pipe and
consist of: Line 320 (0.9 miles of 16-inch pipe) in Hardee County; Line
310 (0.7 miles of 16-inch pipe), in Polk and Hardee Counties; Line 410
(6.1 miles of 16-inch pipe); Line 430 (1.2 miles of 16-inch pipe), and
Line 440 (6.9 miles of 16-inch pipe) all within Polk County; and Line
450 (25.9 miles or 24-inch pipe) in Polk and Osceola Counties, Florida.
Gulfstream states that an additional 13 delivery points are proposed to
be located off of the above laterals and sublateral. Gulfstream also
proposes to construct pig launching and receiving facilities and
mainline valves.
According the Gulfstream, the pipeline was designed to parallel
existing rights-of-ways (ROW) as often as feasible. Gulfstream states
that of the total 307.1 pipeline miles constructed onshore in
Mississippi, Alabama, and Florida, approximately 77 percent, or 235
miles will follow existing ROW.
Gulfstream states that construction ROW for its pipeline typically
will be: for 30-inch to 36-inch pipe, 110 feet wide; for 24-inch pipe,
95-feet wide; and for 16-inch pipe, 80 feet wide. It is stated that the
pipeline will require 50 feet of permanent ROW for 24-inch to 36-inch
pipe and 30 feet for 16-inch pipe and up to 30 to 60 feet of temporary
ROW. Gulfstream states that during construction it will require pipe
coating and storage yards, and contractor staging areas. It is further
stated that additional workspace may be required at major road, rail
and river crossings and under other special circumstances.
Gulfstream states that the pipeline facilities will be constructed,
at a minimum, to meet the requirements of the Natural Gas Pipeline
Safety Act of 1968 and 49 CFR Part 192, Transportation of Natural Gas
and Other Gas by Pipeline: Minimum Federal Standards, as well as other
applicable construction and safety requirements.
Gulfstream states that as a result on an open season it held from
March 15, 1999 to March 29, 1999, it has negotiated, with non-
affiliated shippers, 10 precedent agreements for firm transportation
service for terms of 15 to 20 years. It is stated that two of these
customers have options to increase their firm contractual volumes,
which, if exercised, would increase the capacity contracted for.
Gulfstream states that, overall, their firm commitments currently
represent a significant percentage of the pipeline capacity. Gulfstream
further states that because shippers negotiated confidentiality
agreements as part of their precedent agreements, and since its
application is filed under the optional certificate regulations, which
do not require a showing of market support, Gulfstream is not filing
the precedent agreements with its application.
Gulfstream proposes to offer firm and interruptible transportation
services, and interruptible parking and lending services on a non-
discriminatory, open-access basis, consistent with Commission policy.
Gulfstream proposes to provide a firm transportation service under Rate
Schedule FTS, an interruptible transportation service under Rate
Schedule ITS and interruptible parking and lending services under Rate
Schedule PALS, under rates, terms and conditions in its pro forma
tariff included with the application. Gulfstream states that under Rate
Schedule FTS, shippers will be entitled to elect a firm Maximum Hourly
Quantity (MHQ) for delivery of gas at the shipper's primary delivery
point. It is stated that this firm hourly quantity may be at the rate
of 4.2 percent, 5.0 percent, 6.0 percent, 7.0 percent, or 8.0 percent
of the shipper's maximum daily quantity. Gulfstream states that the
firm hourly entitlement is designed to serve the fluctuating needs of
electric generation customers and other shippers with similar
requirements.
Gulfstream states that the shippers subscribing to its firm
transportation service will be given the option of paying a negotiated
rate or a cost-based recourse rate for service under its firm rate
schedule. Gulfstream states that its recourse rates are based on a
first year total annual cost of service of $273.2 million. It is stated
that the cost of service includes an overall return on rate base of 9.8
percent, predicated on a capital structure of 70 percent debt and 30
percent equity, a propose return on common equity of 14 percent, and an
8 percent cost of debt. It is further stated
[[Page 58389]]
that the initial net rate base used is $1,624.1 million.
Gulfstream states that its proposed rate design is intended to take
into account the service flexibility which will be provided to its
shippers while employing a rate structure which is consistent with
Commission policies. Gulfstream contends that since the operational and
contractual delivery characteristics of its system will be similar to
those of a storage field, the rate design proposed for Gulfstream's
recourse rates is based upon the Equitable 2 method used by
the Commission to design rates for storage service.
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\2\ Equitable Gas Company, 36 FERC para. 61,147 (1986).
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Gulfstream seeks a limited waiver for certain aspects of its
tariff. It states that Section 154.109 of the Commission's regulations
requires that the general terms and conditions of a tariff must contain
a statement of the order in which the pipeline discounts its rates and
charges, and that this order must be in accordance with Commission
policy. Gulfstream requests waiver of the requirement to included a
discount recognition provision in its tariff. According to Gulfstream,
this requirement is inapplicable to it because Gulfstream currently has
no categories of costs other than the base rate reservation charge.
Gulfstream claims that the Commission has granted this waiver to other
new pipeline projects under similar circumstances.3
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\3\ See Vector Pipeline, L.P., 85 FERC at p. 61,304; Alliance
Pipeline L. P., 80 FERC at 61,598.
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Gulfstream asserts that approval of its application is required by
the public convenience and necessity. Gulfstream states that it has
complied with the filing requirements of Section 157.102 and has
satisfied the terms and conditions of Section 157.103. In that regard,
Gulfstream states that the certificate which it seeks will be
nonexclusive, and will in no way prejudice any other application for
other certificates. It is stated that the certificate will also provide
authority to construct and operate facilities to provide new service
and the rates proposed for services comply with the objectives set
forth in Sec. 157.103(d) of the regulations.
In addition to satisfying the requirements of the optional
certificate regulations, Gulfstream indicates that there is a
substantial factual basis from which to conclude that the project is
required by the present or future public convenience and necessity.
First, it is stated that there is substantial market demand for the
project. Second, Gulfstream states that the project is consistent with
and promotes the policies and goals of the Commission. Finally, it is
stated that there are substantial regional benefits which will occur as
a result of constructing the project.
Any person desiring to be heard or to make protest with reference
to said application should on or before November 15, 1999, 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 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. 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 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.
A person obtaining intervenor status will be placed on the service
list maintained by the Commission and will receive copies of all
documents issued by the Commission, filed by the applicant, or filed by
all other 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 intervener status.
Take further notice that pursuant to the authority contained in and
subject to jurisdiction conferred upon the Commission by Sections 7 and
15 of the NGA 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 a
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 Gulfstream to appear or be represented at
the hearing.
David P. Boergers,
Secretary.
[FR Doc. 99-28324 Filed 10-28-99; 8:45 am]
BILLING CODE 6717-01-M