FERC on Wednesday granted blanket authorization for WPS-ESI Gas Storage, a Hinshaw facility, to deliver natural gas from its storage operation in Michigan in interstate commerce to help satisfy the appetite of gas-fired power generators in the region.

“WPS-ESI states that it will use the certificate to provide jurisdictional services on a non-discriminatory basis to meet the growing demand for gas storage service in the upper Midwest region of the United States…It states that the strategic placement of high deliverability, multi-cycle natural gas storage projects like [its] Kimball 27 Gas Storage Field, with multiple interstate pipeline connections, will add needed flexibility to the existing gas infrastructure in meeting both seasonal and intra-day peaking and balancing needs,” the order said [CP04-80].

FERC found that a limited jurisdictional certificate allowing WPS-ESI to provide interstate transportation services was in the “public interest,” it noted.

WPS-ESI owns and operates the Kimball 27 Gas Storage Field, an underground reservoir storage facility located in St. Clair County, MI. The storage field currently functions as a peaking gas storage field, providing 30-day service and some base load service. All of its natural gas supplies are received and ultimately consumed in Michigan, which qualified it for the Hinshaw exemption from FERC’s jurisdiction under the Natural Gas Act.

The storage operation, which began in October 2001, has only one customer — WPS Energy Services, an affiliated, non-jurisdictional marketing firm serving customers in Michigan, other northern states and Canadian provinces. Both WPS-ESI and WPS Energy Services are subsidiaries of WPS Resources Corp. of Green Bay, WI.

WPS-ESI’s storage facilities have a working gas capacity of about 3,049 Bcf, with a maximum storage deliverability of 100,000 Mcf/d and a maximum injection capability of 45,000 Mcf/d. The storage operation’s three-mile pipeline is located close to several interstate pipelines, including ANR Pipeline, Great Lakes Gas Transmission Co. LP and Vector Pipeline LP.

FERC also granted WPS-ESI’s request to charge market-based rates for firm and interruptible storage services. “The Commission finds that WPS-ESI is a small player in its market with a comparatively small market share of working gas and deliverability capacity. Its market share is too small to attract or keep customers at prices above regulated rates. Further, the calculated HHIs [Herfindahl-Hirschman Index] are within the range accepted for other pipelines seeking market-based rates for similar services,” the order said.

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