7 Amoco supports the Altamont Project, requests hearing in this proceeding, and raises numerous issues including the allocation of costs associated with existing river crossings which PGT is not proposing to do even though the Expansion shippers will be using these existing facilities.

8 Altamont states that the offer of settlement does not resolve existing material issues of law and fact with respect to PGT's application and amended application.

Bonneville initially opposed the settlement but filed in July 1990 to withdraw its opposition.

10 Bonus initially incorporated its protest filed before the CPUC; but on July 27, 1990, Bonus filed to withdraw its objections to the PGT Settlement.

11 CIPS members oppose utilization of rolled-in pricing methodology.

12 El Paso believes that PGT unfairly seeks, under the guise of a section 7(c) certificate, the administrative advantages of an optional certificate filing without the commensurate assumption of risk. El Paso opposes the Settlement and calls for a competitive hearing.

14 In support of Settlement.

15 New Mexico argues that the Commission must reject the November 8 Settlement offer; the FERC must examine PGT's expansion proposal in light of a complete record to satisfy its mandate to provide for the PC&N. The settlement does not result from an agreement reached, nor even negotiated, by all parties in this proceeding.

16 Poco states that in reality the offer of settlement reflects solely an agreement between PGT and the firm expansion shippers who have filed Precedent Agreements with PGT.

17

Motion to Hold in Abeyance.

Appendix D

Pacific Gas Transmission Company

Presidential Permit

The following parties filed motions to intervene in Docket No. CP90-1-000:

El Paso Natural Gas Company
Foothills Pipe Lines Ltd.

18

Kern River Gas Transmission Company Mobil Natural Gas Inc.

19

Mojave Pipeline Company

Northridge Petroleum Marketing, Inc.
Northwest Pipeline Corporation

Pacific Interstate Transmission Company
Pan-Alberta Gas Ltd.

ProGas Limited

Southern California Gas Company
Westcoast Energy Inc.

Wyoming-California Pipeline Company

18 El Paso filed a motion to consolidate Docket Nos. CP90-1-000, CP89-460-000 and CP89-460-001.

19 Kern River also filed a protest. It states that the Commission should reject PGT's last minute addition of its affiliate, PGT, to the expansion project. Such an attempt, it states, is a transparent effort to shift some of the risks and costs of the project to captive downstream customers in California, so that PGT can decrease the unit cost of transportation for PGT's targeted markets in Southern California.

Permit Authorizing Pacific Gas Transmission Company to Construct, Operate, Maintain and Connect Natural Gas Facilities at the International Boundary Between the United States and Canada.

(Federal Energy Regulatory Commission
Docket No. CP90-1-000)

Pacific Gas Transmission Company (Permittee), a corporation organized and existing under the laws of the State of California, filed in Docket No. CP90-1-000 on October 3, 1989, an application pursuant to Executive Order Nos. 10485 and 12038 and the Secretary of Energy's Delegation Order No. 0204-112, for a permit authorizing Permittee to construct, operate, maintain and connect the natural gas transmission facilities described in article 2 below on the international boundary between the United States and Canada.

By letter dated December 21, 1989, the Secretary of State, and by letter dated February 5, 1990, the Secretary of Defense favorably recommended that the Permit be granted. The Federal Energy Regulatory Commission finds that the issuance of a permit is appropriate and consistent with the public interest.

Pursuant to the provisions of Executive Order Nos. 10485 and 12038, dated September 3, 1953, and February 3, 1978, respectively, the Secretary of Energy's Delegation Order No. 0204-112, effective February 22, 1984, and the Commission's regulations, permission is granted to Permittee to construct, operate, maintain and connect the natural gas transmission facilities described in article 2 below, upon the terms and conditions of the permit.

Article 1. It is expressly agreed by the Permittee that the facilities herein described shall be subject to all provisions and requirements of this permit. This permit may be modified or

revoked by the President of the United States or the Federal Energy Regulatory Commission and may be amended by the Federal Energy Regulatory Commission upon proper application therefor.

Article 2. The following facilities are subject to this Permit:

A 42-inch natural gas pipeline connecting Pacific Gas Transmission Company's existing compression facility in Idaho two and one half miles from the United States-Canada international boundary with the system of Alberta Natural Gas Company Ltd./Foothills Pipeline (South B.c.) Ltd. at the international boundary near Kingsgate, British Columbia.

Article 3. The natural gas facilities authorized herein, or which may subsequently be included herein by modification or amendment, may be utilized for the transportation of natural gas from Canada to the United States only in the amount, at the rate, and in the manner authorized under section 3 of the Natural Gas Act.

Article 4. The construction, operation, maintenance, and connection of the aforesaid facilities shall be subject to the inspection and approval of representatives of the United States. The Permittee shall allow officers and employees of the United States, showing proper credentials, free and unrestricted access to the land occupied by the facilities in the performance of their official duties.

Article 5. If in the future it should appear to the Secretary of the Army that any facilities or operations permitted hereunder cause unreasonable obstruction to the free navigation of any of the navigable waters of the United States, the Permittee may be required, upon notice from the Secretary of the Army, to remove or alter the same so as to render navigation through such waters free and unobstructed.

Article 6. The Permittee shall be liable for all damages occasioned to the property of others by the operation or maintenance of the facilities, and in no event shall the United States be liable therefor. The Permittee shall do everything reasonable within its power to prevent or suppress fires on or near land occupied under this Permit.

Article 7. The Permittee agrees to file with the Commission, under oath and in such detail as the Commission may require, such statements or reports with respect to the natural gas imported or the facilities described herein, as the Commission may, from time to time, request. Such information may be made available to any federal, state, or local agency requesting such information.

Article 8. Neither this permit nor the facilities, nor any part thereof, covered by this permit shall be voluntarily transferred in any manner, but the permit shall continue in effect temporarily for a reasonable time in the event of the involuntary transfer of the facilities by operation of law (including transfer to receivers, trustees, or purchasers under foreclosure or judicial sale) pending the making of an application for a permanent permit and decision thereon, provided notice is promptly given in writing to the Commission accompanied by a statement that the facilities authorized by this permit remain substantially the same as before the involuntary transfer. The Permittee shall maintain the facilities in a condition of repair for the efficient transportation of natural gas and shall make all necessary renewals and replacements.

Article 9. Upon the termination, revocation, or surrender of this permit, the transportation facilities herein authorized shall be removed within such time as the Commission may specify, and at the expense of the Permittee. Upon failure of the Permittee to remove such transportation facilities or any portion thereof, the Commission may direct that possession of the same be taken and the facilities be removed, at the expense of the Permittee, and the Permittee shall have no claim for damages by reason of such possession or removal.

Article 10. The Permittee agrees that when, in the opinion of the President of the United States, evidenced by a written order addressed

to it as holder of this permit, the safety of the United States demands it, the United States shall have the right to enter upon and take possession of any of the facilities, or parts thereof, maintained or operated under this permit, and all contracts covering the transportation or sale of natural gas by means of said facilities, to retain possession, management, and control thereof for such length of time as may appear to the President to be necessary to accomplish said purposes, and then to restore possession and control to the Permittee; and in the event that the United States shall exercise such right it shall pay the Permittee just and fair compensation for the use of said facilities upon the basis of a reasonable profit in time of peace, and the cost of restoring said facilities to as good condition as existed at the time of taking over thereof, less the reasonable value of any improvements that may be made thereto by the United States and which are valuable and serviceable to the Permittee.

Article 11. This permit is subject to any action which the Government of the United States may in the future deem expedient or necessary to take in case any part of the aforesaid facilities comes into the control of any foreign government.

Article 12. The Government of the United States shall be entitled to the same or similar privileges as may by law, regulation, agreement, or otherwise, be granted by the Permittee to any foreign government.

118 C.F.R. § 284.223(b).

satisfied if no protests are filed after issuance of notice by the Commission.2 Section 157.205(e) establishes a 45-day notice period for such protests.

United states that it instituted transportation services pursuant to section 284.223(a) for Gulf States Gas Corporation on September 25, 1990, and filed a prior notice request for authorization to continue the service with the Commission on January 3, 1991. Due to the late filing of the prior notice request, the selfimplementing transportation portion of this transaction will expire before the end of the 45-day comment period for the prior notice

218 C.F.R. § 157.205(a).

request. Therefore, United requests that the Commission waive its regulations by extending the 120-day limit in section 284.223(a).

We find that the potential hardship inherent in interrupting the ongoing transportation service outweighs the potential benefit of strict adherence of the 120-day limitation in section 284.223(a)(1) of the regulations.

The Commission orders:

The 120-day limitation in section 284.223(a)(1) of the Commission's regulations is waived to the extent necessary to permit United to continue the transportation activity described in its petition without interruption until 45 days after the date notice was issued in this proceeding in accordance with section 157.205 of the regulations.

Background

On February 1, 1990, the Commission issued an order requiring Williams to modify in part its firm transportation service under Rate Schedule FTS.2 As filed, the service agreement provided that the sum of each firm transportation customer's maximum daily quantities (MDQ) for each receipt point could not exceed that customer's total maximum daily transportation quantity (MDTQ). Each customer's service agreement sets MDQs for each receipt point at which Williams has agreed to receive. gas from that customer. The Commission required Williams to either eliminate that requirement or to modify its tariff to allow firm shippers to establish additional interruptible receipt points. The requirement that Williams provide additional interruptible receipt points to firm transportation customers or remove the limit on MDQs at individual receipt points was designed to enable Williams' firm shippers to switch to other receipt points if a particular firm receipt point became unavailable.

On March 21, 1990, Williams filed revised tariff sheets to comply with the Commission's

1 Williams Natural Gas Company, 53 FERC 61,219 (1990).

250 FERC ¶ 61,126 (1990).

February 1 order. The revised tariff sheets reflected additions to Williams' FTS Rate Schedule and also included language which added an additional measure of flexibility by allowing a customer to nominate monthly from any interruptible receipt point on Williams' Rate Schedule ITS Master Receipt Point List.. By order issued May 23, 1990,3 the Commission accepted Williams' March 21 filing, concluding that the additional provision to its tariff allowing shippers to nominate monthly from any interruptible receipt point added an appropriate increase in flexibility accorded firm shippers. The order also added that the shipper nominating from the ITS Master Receipt Point List could bump any interruptible customer at the new receipt point. Williams sought rehearing of that aspect of the Commission's May 23 order.

On August 2, 1990, the Commission issued an order denying rehearing, and directed Williams to refile tariff sheets clarifying that firm shippers may bump interruptible customers at additional interruptible receipt points. The order also denied Williams' request to charge firm shippers the authorized overrun rate for quantities received at additional receipt points. On August 28, 1990, Williams filed revised * tariff sheets to comply with the August 2 order. The August 28 filing reflected a change to Williams' firm transportation rate schedule by providing that firm shippers may bump interruptible customers at the firm shippers' newlynominated receipt points. The tariff filing also delineated the conditions under which a firm customer could switch to alternate receipt points and further required the submission of

351 FERC 61,207 (1990).

52 FERC 61,152 (1990).

an affidavit attesting to the unavailability of the primary point.

Specifically, the newly-added language stated that a firm shipper nominating a new interruptible receipt point from Williams' Rate Schedule ITS Master Receipt Point List must submit an affidavit executed by the operator of the applicable facility showing that any of the firm shippers' specified receipt points had become unavailable due to the occurrence of a specific event such as routine maintenance, downtime, equipment failure, compressor malfunction, freezing, or force majeure. The November 21 order rejected the modification stating that a firm shipper need not advance any reason before shifting to an alternate interruptible receipt point. According to the order, the new language unnecessarily and inappropriately limited the flexibility the Commission deemed necessary for firm shippers on Williams' system.

Request for clarification or in the alternative Rehearing

PGC requests the Commission to clarify that the language in its November 21 order regarding the rights of firm shippers to switch for any reason to interruptible receipt points, including bumping interruptible customers at those points, was limited to nomination for receipt point changes at the beginning of the month. If the Commission does not grant the clarification, PGC requests rehearing of the November 21 order to the extent it would allow firm shippers to bump interruptible shippers at any time, including mid-month without regard to whether a particular receipt point became unavailable following their monthly scheduling of receipt points. PGC argues that any ruling allowing unlimited bumping would represent a substantial change from earlier Commission

orders, would exceed any relief requested by any party in this proceeding, and would threaten to destabilize gas markets to the detriment of users, producers, pipelines, and the Commission's own goal of maximizing

throughput.

Discussion

The Commission has accepted Williams' tariff change proposing that firm shippers be able to switch to interruptible receipt points by nominating monthly from Williams' ITS Master Receipt Point List. Williams' tariff does not provide for mid-month switching and the Commission does not intend at this time to broaden Williams' tariff in that regard. This does not mean that it would be inappropriate for firm shippers to have the ability to switch receipt points at times during the month, bumping interruptible shippers as a result of mid-month switches. It may be that such flexibility is appropriate to make firm transportation service comparable to the quality of firm sales service. Interruptible service by its nature is subservient to firm service and should not be elevated to the level and quality of firm service. If shippers want the monthly certainty that PGC seems to seek, then shippers should negotiate with the pipeline for a firm monthly service that gives the protection PGC seeks but at a rate that reflects the quality of the service. In any event, these are matters that at this time the Commission leaves to the parties to negotiate. The Commission has not required Williams to permit mid-month changes in receipt points in its orders in this docket.

The Commission orders:

The clarification requested by Process Gas Consumers Group is granted, consistent with the body of this order.

El Paso Natural Gas Co., 50 FERC 161,359 (1990).

settlement costs it had incurred with its producer suppliers. The Commission set for hearing the issue of the prudence of incurring the take-or-pay costs reflected in the filing, and set other nonprudence issues for resolution pursuant to a technical conference.