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

Specifically, Tennessee wants to remove about 19.3 miles of anexisting eight-inch line on its existing Concord Lateral, andreplace it with a 20-inch pipeline to serve AES Londonderry, aproposed 720 MW combined-cycle gas-fired generating plant inLondonderry, NH. The new 20-inch line, if Tennessee receives finalapproval, would run parallel to an existing 12-inch loop line fromDracut, MA, to Londonderry. It also proposes to install measurementfacilities, 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 theentire 130,000 Dth/d of firm capacity that would be created by thereplacement/expansion project on the lateral, according toTennessee. It proposes to begin service to AES Londonderry on Oct.1, 2001.

FERC estimated Tennessee’s revenues for each year of the 20-yearcontract with AES will be $6,589,564, while the cost of serviceassociated with the new facilities will be $5,532,196. “This excessof revenues over costs assures that the Londonderry project willnot be subsidized by Tennessee’s existing customers.” Moreover,Tennessee’s service to AES “represents new load not currentlyserved by another pipeline; therefore, no other pipelines or theircaptive customers will be adversely affected by the proposedproject.” Nor, the order added, would landowners be affected given”the short length of the replacement pipeline and the fact thatmost of the construction activities will occur within Tennessee’sexisting right-of-way.”

The increased capacity will allow Tennessee to serve not onlyAES, but also to provide improved service to existing shippers andallow for lower cost expansions in the future, the order said[CP00-48]. FERC rejected Tennessee’ request for incrementalpricing, directing the pipeline to roll the project costs into theexisting rates in its next Section 4 rate proceeding. This wouldcreate lower rates for the pipeline’s existing customers.

The FERC order approved Tennessee’s proposed negotiated rate forAES Londonderry, which consists of a fixed monthly reservationcharge of $1.1298/Dth and a fixed commodity charge of $0.0053/Dth.

Susan Parker

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.