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Granite State Settles Dispute Over Aborted Wells LNG Project

January 10, 2000
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Granite State Settles Dispute Over Aborted Wells LNG Project

The last chapter in the saga of the aborted 2 Bcf Wells, ME, LNG project has been filed at FERC. A settlement agreement submitted recently allows LNG project developer Granite State Gas Transmission to recover $8.3 million in predevelopment costs through Northern Utilities' ratepayers over a seven-year period.

Northern was the project's most vocal proponent and only customer, but after four years of battling for the LNG storage facility and vaporization plant and winning certificates from FERC and state regulators, the LDC shocked observers by changing its mind and signing a supply deal with Distrigas of Massachusetts. The decision left its affiliate, Granite State, with an $11.6 million bill, about 20% of the expected total project costs, which it immediately requested be recovered through Northern's rates.

That request was hotly debated at state regulatory commissions and FERC, but a settlement finally was reached. Granite State, Northern, regulatory commissions in Maine and New Hampshire, public advocates in the two states, representatives of the citizens of Wells, ME, and others have signed the deal. The settlement agreement calls for Northern to recover the costs of the project through monthly collections from retail sales and potentially gas transportation customers in both states beginning retroactively on Nov. 1, 1999. It also allows Granite State to keep the land associated with the proposed facility and retain any profits from selling the property.

The settlement resolves all legal disputes at the state and federal levels, including withdrawal of the appeal of FERC's certificate order on the project. The appeal was filed by No Tanks Inc., a group representing Wells, ME, residents.

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