Call it an example of Goliath giving David a helping hand.
Last month, Exelon Corp., which delivers electricity and natural gas to more than 7.8 million customers and conducts business in 48 states, filed a joint petition asking FERC for a waiver of certain regulations with Summit Natural Gas of Maine Inc., a local distribution company (LDC) formed in April 2014 that serves less than 2,000 customers in Maine.
At issue is Summit's desire for firm transportation capacity from the new Atlantic Bridge Project (see Daily GPI, Oct. 23). It subscribed for 8,000 Dth/d for a 15-year term, but since it's a relatively new company it doesn't have an external credit rating and doesn't meet the creditworthiness requirements of Algonquin Gas Transmission LLC and Maritimes & Northeast Pipeline LLC (M&NE).
On Oct. 23, Exelon, on behalf of its subsidiary Constellation Energy Group, and Summit filed the joint petition with the Federal Energy Regulatory Commission for limited waivers and clarification. Specifically, the companies requested limited, case-specific waivers from FERC's capacity release regulations, related policies, and any applicable capacity release provisions for natural gas tariffs from Algonquin and M&NE.
The companies also asked the Commission to issue any other waivers it may deem necessary, including for the shipper-must-have-title-rule; the ban on buy/sell transactions; and tieing the release of pipeline capacity to extraneous conditions. They also want FERC to allow Constellation to be able to permanently assign firm transportation capacity to Summit, without going through the posting and bidding process.
"The requested waivers are necessary to enable Summit, a relatively new LDC, which cannot yet satisfy the creditworthiness requirements of Algonquin and M&NE, to obtain for its consumer-customers the benefit of 8,000 Dth/day of new firm transportation capacity on Algonquin and M&NE as part of their Atlantic Bridge Project," the petition stated.
According to the petitioners, Algonquin and M&NE do not oppose the waivers.
Summit serves previously unserved areas of central and southern Maine, providing natural gas to more than 1,900 residential and commercial customers, and transportation service for five industrial customers.
As a temporary workaround pending a review by FERC, Summit and Constellation agreed that the former would assign the latter its precedent agreement with M&NE. Constellation would then deliver the equivalent amount of gas to Summit's city-gate. Once Summit meets the creditworthiness standards of Algonquin and M&NE, Constellation would permanently assign the firm transportation agreements back to Summit.
"While the assignment of the precedent agreement and the resulting gas sales arrangement are a useful interim solution, they would not replace for Summit and its customers the assurance of long-term access to the capacity on Algonquin and M&NE that they require," the petitioners said.
Last month, Algonquin and M&NE filed an application with FERC for their Atlantic Bridge Project [CP16-9] . The project would enable Algonquin to provide 132,705 Dth/d of firm capacity to new and existing points on its system, including an interconnection with M&NE at Beverly, MA. Meanwhile, M&NE would be able to provide 106,276 Dth/d of firm capacity from Beverly to existing points on its system.