The Federal Energy Regulatory Commission has awarded Texas Eastern Transmission (Tetco) a preliminary determination (PD) on non-environmental issues for a pipeline looping and compression expansion of its mainline system to serve expanding natural gas markets in Alabama, Georgia and North Carolina.

The so-called M-1 Expansion Project would add 197,147 Dth/d of transportation capacity by looping approximately 32 miles of Tetco’s mainlines with 36-inch diameter pipe and boosting compression by 28,000 horsepower. The proposed facilities, which would be located in Tennessee, Alabama and Mississippi, would be built in three phases, with segments to be completed in November 2003, April 2004 and November 2004. The cost of the expansion was pegged at $66 million.

Tetco said it plans to loop three sections of its existing mainline: 14.70 miles of pipe in Copiah and Hinds Counties, MS; 4.50 miles of pipe in Amite and Franklin Counties, MS; and 12.75 miles of pipe in Madison County, MS. In addition, it proposes to modify facilities at four existing compressor stations to upgrade their output.

Eight expansion shippers have subscribed to the project’s entire summer capacity and 82% of its winter capacity, according to the FERC order [CP02-381]. The shippers include the Athens Utilities Board, the City of Bridgeport Utilities Board, the City of Cartersville, the City of Dalton (GA), Carolina Power & Light, Choctaw Gas Generation LLC, Etowah Utility Department, and the Elk River Public Utility District. They have signed long-term agreements ranging from 10 to 20 years.

The Commission said its main concern with the project was that existing shippers could pay subsidies if actual electric expansion costs turn out to be more than the $1.874 million that would be charged to expansion shippers. “While existing customers stand to gain in the event electric expansion costs come in below $1,874,000, this does not compensate for placing these customers at risk of paying electric power costs in excess of the fixed amount,” the order said. “Texas Eastern must ensure that expansion electric power costs above $1,874,000 are the responsibility of M-1 Expansion shippers and Texas Eastern alone.”

Contrary to the beliefs of some protesters, “we believe that the proposed facilities will not have an adverse impact on Texas Eastern’s ability to meet contractual obligations to its existing shippers,” the FERC order noted.

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