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Tennessee Gets PD for New Hampshire Lateral Project

Tennessee Gets PD for New Hampshire Lateral Project

FERC has issued a preliminary determination (PD) for Tennessee Gas Pipeline to replace and expand an existing lateral's facilities to provide up to 130,000 Dth/d of firm transportation service to a new power generation facility planned in New Hampshire.

Specifically, Tennessee wants to remove about 19.3 miles of an existing eight-inch line on its existing Concord Lateral, and replace it with a 20-inch pipeline to serve AES Londonderry, a proposed 720 MW combined-cycle gas-fired generating plant in Londonderry, NH. The new 20-inch line, if Tennessee receives final approval, would run parallel to an existing 12-inch loop line from Dracut, MA, to Londonderry. It also proposes to install measurement facilities, a flow control valve and other associated facilities, bringing the total cost of the project to $32.4 million.

AES Londonderry has signed a binding 20-year agreement for the entire 130,000 Dth/d of firm capacity that would be created by the replacement/expansion project on the lateral, according to Tennessee. It proposes to begin service to AES Londonderry on Oct. 1, 2001.

FERC estimated Tennessee's revenues for each year of the 20-year contract with AES will be $6,589,564, while the cost of service associated with the new facilities will be $5,532,196. "This excess of revenues over costs assures that the Londonderry project will not be subsidized by Tennessee's existing customers." Moreover, Tennessee's service to AES "represents new load not currently served by another pipeline; therefore, no other pipelines or their captive customers will be adversely affected by the proposed project." Nor, the order added, would landowners be affected given "the short length of the replacement pipeline and the fact that most of the construction activities will occur within Tennessee's existing right-of-way."

The increased capacity will allow Tennessee to serve not only AES, but also to provide improved service to existing shippers and allow for lower cost expansions in the future, the order said [CP00-48]. FERC rejected Tennessee' request for incremental pricing, directing the pipeline to roll the project costs into the existing rates in its next Section 4 rate proceeding. This would create lower rates for the pipeline's existing customers.

The FERC order approved Tennessee's proposed negotiated rate for AES Londonderry, which consists of a fixed monthly reservation charge of $1.1298/Dth and a fixed commodity charge of $0.0053/Dth.

Susan Parker

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