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.
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
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.
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