FERC: MS Projects Not Affected By Destin Suspension
FERC has ruled the six-month suspension of Destin Pipeline Co.
L.L.C.'s blanket certificate authority does not apply to the
construction of interconnects for two projects currently being
built in Mississippi.
In an order granting clarification, the Commission said Destin
could proceed with the construction of an interconnect under its
blanket-certificate authority for a 1,000 MW new generation
facility (Plant Daniel) being developed by Mississippi Power Co. in
Jackson County, MS. It took similar action with respect to a
processing plant that is being constructed by Kahuna Gas L.L.C. to
treat gas produced by Rebel Drilling Co. in Wayne County, MS.
Kahuna currently is building a 5.7 non-jurisdictional line from the
processing facility to Destin's system.
"Because this is the first time the Commission has imposed the
remedy of suspending a blanket certificate, we will not delay the
subject interconnections until Destin's suspension ends in
September. Accordingly, we clarify that Destin's certificate
suspension does not apply to these [two] projects," the order said
Destin and Rebel and Kahuna jointly argued the suspension of
Destin's blanket-certificate authority shouldn't apply to them
because their projects were begun before the suspension went into
effect in mid-March. They also argued they shouldn't be punished
for Destin's misconduct. Kahuna claimed it would become insolvent
without a hook-up to Destin, and Rebel's gas would be shut in for a
long period. Southern Company, which owns Mississippi Power, said
it would be forced to halt construction on Plant Daniel.
FERC yanked Destin's blanket-certificate authority because it
grossly exceeded the cost cap earmarked for construction of an
offshore lateral, and for dragging its feet in reporting the cost
overrun to the Commission. The maximum cost allowed by the
Commission for blanket-certificate projects is $19.6 million;
Destin projected the cost for its lateral would be $19.5 million.
In the end, it spent a total of $35.1 million to build the
lateral to transport gas from two production platforms in the Gulf
of Mexico to an offshore connection with its mainline system at its
Main Pass 260 platform, and did not notify FERC of the overruns
until two months after the lateral was placed into service in
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