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Destin Customer Asks for Limited Waiver of Suspension

Destin Customer Asks for Limited Waiver of Suspension

Southern Company Services Inc. last week asked FERC to grant a "limited waiver" of Destin Pipeline Co. L.L.C.'s suspension of its blanket-certificate authority so it can complete a delivery point to supply gas to a generation plant being developed in Mississippi.

Southern Company, acting as an agent for Mississippi Power Co. (MPC), said Destin contacted MPC to inform it that it wouldn't be able to complete the new delivery point for MPC's generation plant until mid-September 2000, when its blanket-certificate would be reinstated.

"Although [Southern Company] and MPC appreciate the circumstances that led the Commission to issue its order suspending Destin's blanket-certificate authority, in this instance the impact of the Commission's order is to penalize MPC --- not Destin," Southern Company said [CP98-238]. Having based its construction schedule on Destin's blank-certificate authority, the suspension has the potential to adversely affect both MPC's schedule and construction costs, it said.

A major reason why MPC chose to build its 1,000 MW combined power generating facility in Jackson County, MS, was its "proximity to Destin and, through an interconnection with Destin, access to the significant offshore reserves transported through Destin," according to Southern Company. MPC has entered into a number of gas supply contracts with producers served by Destin's system.

Granting the waiver "would avoid any delay or increase in cost associated with the construction of the....Destin delivery point. Although this will benefit MPC, it will not generate additional transportation revenues for, or otherwise reward, Destin," Southern Company said.

FERC pulled Destin's blanket-certificate authority for six months for grossly exceeding the $19.6 million cost cap during construction of an offshore lateral, and for dragging its feet in reporting the cost overrun to the Commission (See NGI 3/20/00).

Susan Parker

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