FERC Approves Sonat Expansion
The Federal Energy Regulatory Commission has approved an expansion of Southern Natural Gas' South System to add 335.8 MMcf/d of firm transportation capacity to Sonat's mainline, primarily to deliver gas to new power plants in Alabama and South Carolina.
The project is supported by 15-year agreements with Southern Co., South Carolina Pipeline Corp. and the City of LaGrange, GA. It will consist of 67 miles of pipeline looping and 53,900 hp of mainline compression, at an estimated cost $140 million.
Phase I of the project, to be completed by June 1, 2002, will carry 140 MMcf/d, which includes the 50 MMcf/d committed to South Carolina Pipeline for its Urquhart power plant in Aiken County, SC, 1.75 MMcf/d going to the City of LaGrange, GA, and 88 MMcf/d to Southern Company Services (SCS). Phase II, to be completed by June 1, 2003 will supply the remaining 196 MMcf/d contracted by SCS. The Southern Co. subsidiary has signed on for a total of 284 MMcf/d of new capacity to supply two new gas-fired power plants it is building in Alabama.
Reviewing Southern's cost and revenue data, FERC approved a presumption in favor of rolled-in rate treatment in Southern's next rate case. The Commission agreed with Southern's projections that the expansion will bring in $159 million over costs over the 15-year life of the contracts. That is despite discounted rates to SCS, which Southern said were necessary because it was in competition with Transcontinental Gas Pipe Line to sign up the new load.
Southern Natural's proposed expansion would tie in with South Carolina Pipeline's plans to extend its system by 300 miles to serve three new 200 MW power plants, three ethanol production facilities and a new fiber optic cable system in North Carolina.
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