FERC has given the green light to Reliant Energy Gas Transmission to proceed with a 108,000 Dth/d compression expansion of Line J of its system to serve a new natural gas-fired power generation facility that is being built in Arkansas.

The Commission certificate authorizes Reliant Energy to construct the 4,740 horsepower White River Compressor Station on the pipeline’s 24-inch line in Jackson County, AK, to provide gas to a power plant being constructed by TPS Dell LLC. Reliant Energy said it plans to complete the $7.8 million project by Oct. 1 of this year.

TPS Dell has entered into an agreement for 102,000 Dth/d, or 95% of the expansion capacity. Prior to the start of service, Reliant Energy had hoped to offer TPS Dell a negotiated rate contract for a 14-year term, which would have provided a reduced reservation rate for firm transportation service ($5.2925 Dth versus a recourse rate of $7.4257 Dth), and the right to terminate the contract after the first seven years.

However, the Commission found the early termination clause “unacceptable.” It ordered Reliant Energy to either delete the provision and re-file a revised negotiated contract, or provide early termination rights to all of its shippers under its tariff.

In addition, FERC gave Reliant Energy the go-ahead to roll in the costs of its compression expansion into system-wide rates at its next general rate proceeding, given that expected revenues from the project will exceed the cost of service.

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