The last chapter in the saga of the aborted 2 Bcf Wells, ME, LNGproject has been filed at FERC. A settlement agreement submittedlast week allows LNG project developer Granite State GasTransmission to recover $8.3 million in predevelopment coststhrough Northern Utilities’ ratepayers over a seven-year period.

Northern was the project’s most vocal proponent and onlycustomer, but after four years of battling for the LNG storagefacility and vaporization plant and winning certificates from FERCand state regulators, the LDC shocked observers by changing itsmind and instead signing a supply deal with Distrigas ofMassachusetts. The decision left its affiliate, Granite State, withan $11.6 million bill, about 20% of the expected total projectcosts, which it immediately requested be recovered throughNorthern’s rates. That request was hotly debated at stateregulatory commissions and FERC, but a settlement finally wasreached.

Granite State, Northern, regulatory commissions in Maine and NewHampshire, public advocates in the two states, representatives ofthe citizens of Wells, ME, and others have signed the deal. Thesettlement agreement calls for Northern to recover the costs of theproject through monthly collections from retail sales andpotentially gas transportation customers in both states beginningretroactively on Nov. 1, 1999. It also allows Granite State to keepthe land associated with the proposed facility and retain anyprofits from selling the property. The settlement resolves alllegal disputes at the state and federal levels, includingwithdrawal of the appeal of FERC’s certificate order on theproject. The appeal was filed by No Tanks Inc., a grouprepresenting Wells, ME, residents.

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