TriState Pipeline, L.L.C.; Notice of Applications for Certificates and for a Presidential Permit and Section 3 Authorization

[Federal Register Volume 63, Number 230 (Tuesday, December 1, 1998)]
[Notices]
[Pages 66155-66157]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31874]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission
[Docket Nos. CP99-61-000, CP99-62-000, CP99-63-000, and CP99-64-000]


TriState Pipeline, L.L.C.; Notice of Applications for 
Certificates and for a Presidential Permit and Section 3 Authorization

November 24, 1998.
    Take notice that on November 9, 1998, TriState Pipeline, L.L.C. 
(TriState), Fairlane Plaza South, 330 Town Center Drive, Suite 900, 
Dearborn, Michigan 48126-2712, filed applications pursuant to Sections 
7(c) and 3 of the Natural Gas Act. In Docket No. CP99-61-000, TriState 
seeks a certificate of public convenience and necessity to construct, 
install, own, lease, operate and maintain a new interstate natural gas 
pipeline and ancillary facilities. Further, in Docket No. CP99-62-000, 
TriState requests a blanket certificate pursuant to Subpart F of Part 
157 of the Commission's Regulations to perform certain routine 
activities and operations. In addition, in Docket No. CP99-63-000, 
TriState seeks a blanket certificate pursuant to Subpart G of Part 284 
of the Commission's Regulations to provide open-access transportation 
of natural gas for others. TriState also seeks approval of its initial 
rates and pro forma tariff provisions included in its certificate 
application. Finally, in Docket No. CP99-64-000, TriState requests a 
Presidential Permit and Section 3 authorization under Section 153 of 
the Commission's Regulations, all as more fully set forth in the 
applications which are on file with the Commission and open to public 
inspection.
    TriState reports it is a limited liability company formed under the 
laws of the State of Michigan, with its principal place of business in 
Dearborn, Michigan. TriState further states that it is jointly owned by 
CMS Gas Transmission and Storage Company and Westcoast Energy (U.S.) 
Inc.
    In Docket No. CP99-61-000, TriState proposes to construct and 
operate the United States segment of the TriState Pipeline System which 
will be comprised of approximately 148 miles of new 30-inch diameter 
natural gas transmission pipeline running from near Joliet, Illinois to 
White Pigeon, Michigan; approximately 66 miles of new 36-inch diameter 
natural gas transmission pipeline looping the existing Consumers Energy 
Company (Consumers) and Michigan Gas Storage (MGS) systems in three 
segments between White Pigeon and St. Clair; approximately 12 miles of 
new 24-inch diameter natural gas transmission pipeline running from the 
St. Clair compressor station to the United States-Canadian 
International Boundary in the St. Clair River; a new approximately 
30,000 hp compressor station at Joliet, and approximately 18,570 hp of 
additional compression at Consumers' existing St. Clair compressor 
station; and 450 MDth per day of leased pipeline capacity between White 
Pigeon, Michigan and the St. Clair compressor station located in St. 
Clair County, Michigan, which leased capacity is available from 
Consumers and MGS as a result of the looping and added compression that 
TriState will undertake.
    TriState asserts that its approach of combining new pipeline 
construction with the expansion of existing pipeline facilities and the 
lease of the expanded capacity created on those existing facilities 
will make a pipeline sized to meet market demand efficiently and cost-
effectively. TriState believes its lease satisfies the Texas Eastern 
standards as reiterated by the

[[Page 66156]]

Commission in Wyoming Interstate Company, Ltd., 84 FERC para. 61,007 
(1998), because its lease (1) avoids the construction of duplicative 
facilities and has the least environmental impact; (2) provides 
shippers with access to new supply and market areas and/or allows 
shippers to avoid administrative burdens from dealing with multiple 
pipelines; (3) is actively supported by shippers using the capacity; 
and (4) can be managed or integrated into the acquiring pipeline's 
open-access operations.
    TriState states that it held an open season in which it made 
capacity on its system available to interested shippers on a 
nondiscriminatory basis. As a result, TriState says it executed binding 
precedent agreements with six shippers for 435 MDth of firm 
transportation service. TriState asserts that the results of its open 
season demonstrates that there is market demand for natural gas 
transportation service on TriState from the Chicago Hub to the Dawn Hub 
and to points in between in Michigan. TriState indicates it is 
negotiating with other potential shippers and will file additional 
precedent agreements after they are executed.
    TriState proposes to provide firm transportation service for the 
following shippers:

------------------------------------------------------------------------
                                        Maximum
                                         daily
               Shipper                  quantity        Term (years)
                                       (MDth/day)
------------------------------------------------------------------------
Consumers Energy Co. (affiliate)....          100  Ten.
CMS Marketing Services and Trading            100  Ten.
 (affiliate).
Union Gas Ltd. (affiliate)..........           80  Fifteen.
Shipper A (confidential)............          100  Ten.
Shipper B (confidential)............           25  Ten.
Shipper C (confidential)............           30  Ten.
------------------------------------------------------------------------

    TriState proposes to provide firm transportation service under Rate 
Schedule FT-1 and interruptible transportation service under Rate 
Schedule IT, under rates, terms and conditions provided in its pro 
forma tariff submitted with the application. TriState proposes to offer 
both negotiated and recourse rates. TriState explains its recourse 
rates are traditional cost-of-service based rates, designed under the 
straight-fixed variable method. TriState explains its negotiated rates 
are different from the recourse rates in that they are fixed rates plus 
an agreed upon escalator for either a 10-year or 15-year term. TriState 
says that during its open season process it offered firm shippers the 
choice of negotiated or recourse rates and each one who executed a 
precedent agreement elected negotiated rates.
    TriState estimates the total capital cost of constructing the U.S. 
segment of the pipeline and appurtenant facilities will be 
approximately $361 million, excluding AFUDC. TriState relates that $305 
million would be the cost of pipeline and ancillary facilities and $56 
million would be the cost of the compressor stations. TriState says to 
date this project has been financed by equity furnished by the project 
sponsors. TriState states following issuance of the Commission's 
Preliminary Determination, the project will be financed during the 
remainder of the construction phase through a combination of debt and 
equity capital. After the project is in-service, Tristate relates that 
the construction financing will be replaced by permanent capital to 
consist of 60% debt and 40% equity. TriState states the project 
sponsors will furnish the equity capital. TriState says that it is 
anticipated that the construction of the pipeline project will be 
funded primarily through debt raised in the commercial bank market and 
equity provided by the project sponsors. Further, TriState says the 
credit support for the debt will be the shipper contracts and the debt 
will be non-recourse to project sponsors during the initial term of the 
shipper contracts. TriState states it has not yet finalized precise 
financing plans.
    In Docket No. CP99-64-000, TriState has filed a companion 
application for a Presidential Permit and Authority, pursuant to 
Section 3 of the NGA, 15 U.S.C. Sec. 717b and 18 CFR Part 153, to site, 
construct, install, own, operate, and maintain facilities at the United 
States-Canadian International Boundary in the St. Clair River near 
Marine City, Michigan. TriState relates that the border facilities will 
connect TriState's proposed United States facilities with Canadian 
facilities owned by TriState's Canadian affiliate, TriState-Canada.
    TriState has requested a waiver of Section 154.109(c) of the 
Commission's regulations which requires that the General Terms and 
Conditions of a tariff contain a statement regarding discounts that 
specifies the order in which various rate components will be discounted 
in accordance with Commission policy. As a new pipeline, TriState does 
not have separate rate components, and therefore, it believes that the 
order of discounting requirement is not applicable to its operations.
    TriState has stated that it will lease capacity from Consumers and 
MGS. Consumers is a Hinshaw pipeline subject to the jurisdiction of the 
Michigan Public Service Commission and is currently authorized to 
perform service on behalf of others under Section 311 of the NGPA. MGS 
is an interstate pipeline regulated by the Commission. Consumers has 
authorized TriState to state that it is willing to accept a limited 
jurisdiction certificate authorizing Consumers to act as operator of 
the capacity leased to TriState, provided Consumers' status as a 
Hinshaw Pipeline is not affected and that Consumers is not otherwise 
subject to Commission jurisdiction as a result of its lease of capacity 
to TriState. TriState requests that the Commission's Preliminary 
Determination of this project confirm that Consumer's Hinshaw status is 
unaffected.
    TriState's proposed in-service date is November 1, 2000. TriState 
requests that the Commission issue a Preliminary Determination with 
respect to non-environmental issues by May 1, 1999, and a final 
certificate by January 15, 2000, so that TriState can meet its proposed 
in-service date.
    Any person desiring to participate in the hearing process or to 
make any protest with reference to said applications should on or 
before December 15, 1998, file with the Federal Energy Regulatory 
Commission, 888 First Street, N.E., 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 385.214 and 
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

[[Page 66157]]

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 Secretary of the Commission and will receive 
copies of all documents filed by the applicant and by every one of the 
intervenors. An intervenors 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 intervenor status.
    Take further notice that, pursuant to the authority contained in 
and subject to the jurisdiction conferred upon the Commission by 
Sections 7 and 15 of the Natural Gas Act and the Commission's Rules of 
Practice and Procedure, a hearing will be held without further notice 
before the Commission or its designee on these applications 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 
certificates 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 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 TriState to appear or to be represented at 
the hearing.
Linwood A. Watson, Jr.,
Acting Secretary.
[FR Doc. 98-31874 Filed 11-30-98; 8:45 am]
BILLING CODE 6717-01-M