1989. Algonquin is directed to include the annual PGA filing to be effective March 1, adjustments resulting from the revised exchange calculations in Algonquin's next 1991. [¶ 61,281] Boundary Gas, Inc., Docket No. RP91-77-000 Letter Order (Issued March 7, 1991) By Direction of the Commission: Lois D. Cashell, Secretary. Reference: First Revised Sheet No. 44 to FERC Gas Tariff, First Revised Volume No. 1. On January 28, 1991, Boundary Gas, Inc. (Boundary) filed the referenced tariff sheet reflecting a rate increase pursuant to section 4 of the Natural Gas Act, and sought waiver of the Commission's notice requirements to permit the proposed increase in rates to be made effective November 1, 1990. Based on the facts presented (i.e., that Boundary operates under a cost-of-service type tariff and that the tariff provides that the subject management fee may be changed by mutual agreement) and because no party has filed adverse comments to Boundary's proposal, the Commission finds that good cause has been demonstrated, and hereby grants waiver of the notice requirements and accepts the referenced tariff sheet effective November 1, 1990. The revised tariff sheet reflects Boundary's new Management Services Agreement and establishes a new fee schedule between Boundary Gas, Inc. and J. Makowski Associates, Inc. for the three years beginning November 1, 1990. Notices of intervention and unopposed timely filed motions to intervene are granted pursuant to the operation of Rule 214 of the Commission's Rules of Practice and Procedure (18 C.F.R. § 385.214). Any opposed or untimely filed motion to intervene is governed by the provisions of Rule 214. This acceptance for filing shall not be construed as a waiver of the requirements of section 7 of the Natural Gas Act, as amended; nor shall it be construed as constituting approval of the referenced filing or of any rate, charge, classification, or any rule, regulation, or practice affecting such rate or service contained in your tariff; nor shall such acceptance be deemed as recognition of any claimed contractual right or obligation associated therewith; and such acceptance is without prejudice to any findings or orders which have been or may hereafter be made by the Commission in any proceeding now pending or hereafter instituted by or against your company. [¶ 61,282] Exxon Gas System, Inc., Docket No. PR91-1-000 Letter Order (Issued March 7, 1991) By Direction of the Commission: Lois D. Cashell, Secretary. The Stipulation and Agreement filed with the Commission on February 11, 1991, in the referenced docket, represents a reasonable resolution of the issues and is approved. The major elements of the settlement are as follows: (1) Effective January 1, 1991, the maximum fair and equitable rate for section 311 transportation services performed on Exxon Gas System, Inc. (EGSI) is 11.9 cents per MMBtu plus 1% (percent) of gas on an MMBtu basis for fuel and unaccounted-for gas. (2) To the extent that any refunds are due for collections in excess of this amount on or after January 1, 1991, EGSI agrees to refund, with appropriate interest as determined in accordance with section 154.102(c)(2) of the Commission's regulations, amounts collected for section 311(a)(2) transportation. This refunding will occur within thirty (30) days of this Commission order. EGSI will file a full refund report within sixty (60) days of the Commission order. (3) The Settlement Agreement represents a negotiated settlement, the terms of which shall not become effective until the Commission's order approving the settlement becomes final and no longer subject to rehearing. (4) On or before January 1, 1994, EGSI shall file a petition for rate approval pursuant to section 284.123(b)(2) of the Commission's regulations to justify its current rate or to establish a new rate on this system. This letter order does not relieve EGSI from its obligation to file the required reports under sections 284.126 and 284.148 of the Commission's regulations. This letter order is without prejudice to any findings or orders which may have been or which may hereafter be made by this Commission, and is without prejudice to any claim or contention which may be made by the Commission, its staff or any other party or person affected by this letter, in any proceeding now pending or hereafter instituted by or against EGSI or any other person or party. The Commission's approval of this settlement does not constitute approval of, or precedent regarding any principle or issue in this proceeding. [¶ 61,283] Florida Gas Transmission Company, Docket No. RP91-76-000 (Issued March 7, 1991) By Direction of the Commission: Lois D. Cashell, Secretary. Reference: Petition for Authorization to Waive Scheduling Penalties. This is to advise you that the Petition, referenced above, is hereby granted. Specifically, Florida Gas Transmission Company (FGT) is authorized to waive the scheduling penalties incurred by shippers during the month of October 1990, under section 15.1 of FGT's FTS-1 Rate Schedule, section 14.1 of FGT's PTS-1 Rate Schedule and section 13.1 of FGT's ITS Rate Schedule. On August 1, 1990, FGT commenced openaccess transportation service pursuant to its blanket certificate issued by the Commission in Docket No. RP89-50 et al. Because many shippers and suppliers were confronted with openaccess transportation for the first time, coordination of scheduling during August, September and October were difficult. However, despite efforts by the shippers to meet delivery requirements, some deliveries to FGT's system varied by more than the four percent tolerance level. However, the variances amounted to only $45,073 for the month of October 1990. No protests were filed in opposition to this Petition. Notices of intervention and unopposed timely filed motions to intervene are granted, pursuant to operation of Rule 214 of the Commission's Rules of Practice and Procedure (18 C.F.R. § 385.214). Any opposed or untimely filed motion to intervene is governed by the provisions of Rule 214. This letter order is without prejudice to any finding or orders which have been made or which may hereafter be made by the Commission, and is without prejudice to any claim or contentions which may be made by the Commission, its staff, or any other party or person affected by this order in any proceedings, now pending or hereinafter instituted by or against Florida Gas Transmission Company or any other person or party. [¶ 61,284] Texas Gas Transmission Corporation, Docket No. RP90-192-002 (Issued March 7, 1991) By Direction of the Commission: Lois D. Cashell, Secretary. Reference: Tariff Sheets listed in the Appen dix. This is to advise you that the above-referenced tariff sheets tendered for filing on November 30, 1990 in Docket No. RP90-192-002 have been accepted as being in compliance with the Commission's October 26, 1990 Order in Docket No. RP90-102-000 subject to the conditions discussed below. Further, the acceptance of the tariff sheets in no way alters, modifies, or changes in any way the refund obligation or other conditions imposed by the prior Commission order in this proceeding. Although Texas Gas modified section 1.4 of its FT and IT Rate Schedules in an attempt to establish under what circumstances it will construct facilities at its own expense rather than requiring reimbursement, the Commission finds the provision to be overly vague because such a determination cannot be made from a reading of the tariff provisions. The Commission finds that the tariff provisions need further delineation of the criteria Texas Gas intends to employ in making its net economic benefit determination to avoid confusion and the potential for discrimination regarding who is responsible to pay for the proposed facilities. These criteria may include such items as, the volumes to be transported, term of the agreement, rates to be paid, and a discounting of projected revenues. In several recent proceedings, the Commission has accepted facilities reimbursement provisions which clearly state when the pipeline would or would not require reimbursement for the construction of facilities. See Northwest Pipeline Corp., 54 FERC 161,104 (1991); Transwestern Pipeline Company, 51 FERC 61,252 (1990); and Tennessee Gas Pipeline Company, 50 FERC 61,395 (1990). Therefore, Texas Gas shall file tariff sheets within thirty days to detail more precisely the methodology Texas Gas will use for determining whether the transporter or the shipper should pay for the proposed receipt and delivery point facilities referred to in section 1.4 of Texas Gas' FT and IT Rate Schedules. Additionally, as we have required in similar cases, Texas Gas is directed to provide the following information in its section 4(e) rate filing when it first seeks to include the cost of the facilities in its rates: (a) the location of each facility which is constructed to attach shippers' gas supplies for which there is no reimbursement, (b) the cost of the facility, and (c) the date the facility was placed in service. The Western Tennessee Municipal Group, the Jackson Utility Division, the City of Jackson, Tennessee, the City of Carrollton, Kentucky, and the City of Elizabethtown, Kentucky (together, "Cities"), filed a joint motion to intervene as well as what they referred to as a "limited" protest in the instant filing. Cities objected to the fact that although Texas Gas has eliminated references to secondary delivery points as they agree was necessary, section 1.5 of the FT Rate Schedule allows customers to change firm delivery points 1 Tennessee Gas Pipeline Company, 50 FERC 61,395 (1990). to points upstream of their original delivery points prior to the expiration of the FT service agreement. On rehearing of the November 30, 1990 order in this proceeding, the Commission found section 1.5 to be vague and possibly inconsistent with current Commission policy and ordered Texas Gas to revise its tariff to conform with its finding. Therefore, acceptance of the instant tariff sheets is subject to Texas Gas filing to revise section 1.5 in conformance with the Commission's order on rehearing in this proceeding. Also regarding delivery points, the Commission notes that Texas Gas states in section 7.2 of its FT and IT Rate Schedules that "Delivery Point(s) for all gas transported by Transporter under this Rate Schedule shall be at a mutually agreeable interconnection between Transporter's facilities and the facilities of Customer or Customer's designee." The issue of Texas Gas brokering or assigning its pipeline capacity is presently before the Commission in Docket No. CP88-686-001. Since such a designation may permit brokering or capacity assignment, Texas Gas is hereby directed to remove the phrase "or Customer's designee" from the provisions for delivery and receipt points in section 7 of their FT and IT Rate Schedules on Substitute Original Sheets No. 31 and 55, respectively. The Process Gas Consumers Group and the American Iron and Steel Institute also filed a conditional protest to take issue with Texas Gas' claim, in its transmittal letter to this filing, that the tariff sheets "resolve all issues in, and are in full compliance with, the October 26, 1990 Order." Contrary to Texas Gas' assertions, this tariff filing does not resolve all issues in this proceeding. The Commission notes that it previously consolidated the Docket No. RP90-192 proceeding for hearing with Texas Gas' ongoing rate proceeding in Docket No. RP90-104 et al. Our acceptance of the instant tariff sheets in no way modifies the Commission's previous orders in this proceeding. Notices of intervention and unopposed timely filed motions to intervene are granted pursuant to the operation of Rule 214 of the Commission's Rules of Practice and Procedure (18 C.F.R. section 385.214). Any unopposed or untimely filed motion to intervene is governed by the provisions of Rule 214. This acceptance for filing shall not be construed as a waiver of the requirements of section 7 of the Natural Gas Act, as amended; nor shall it be construed as constituting approval of the referenced filing or of any rate, charge, classification, or any rule, regulation, or prac tice affecting such rate or service contained in your tariff; nor shall such acceptance be deemed as recognition of any claimed contractual right or obligation associated therewith; and such acceptance is without prejudice to any findings or orders which have been or may hereafter be made by the Commission in any proceeding now pending or hereafter instituted by your company. Appendix A FERC Gas Tariff, First Revised Volume No. To be effective November 1, 1990 Substitute Original Sheet Nos. 47-59 [¶ 61,285] Iroquois Gas Transmission System, L.P., Docket No. CP89-634-004 Order Amending Certificate (Issued March 11, 1991) Before Commissioners: Martin L. Allday, Chairman; Charles A. Trabandt, On December 19, 1990, Iroquois Gas Transmission System, L.P. (Iroquois) filed an application, in Docket No. CP89-634-004, to amend the certificate issued in Docket No. CP89-634-000 et al. (Opinion No. 357) on November 14, 1990.1 Iroquois requests that it be permitted to use an accounting treatment whereby it would postpone plant depreciation for one year, and capitalize revenues received and expenses incurred in its initial year of operation. Iroquois also requests that the Commission amend the certificate to transfer its service obligation of 5000 Mcf per day of gas from Elizabethtown Gas Company (Elizabethtown) to Long Island Lighting Company (LILCO). For the reasons provided herein, Iroquois' request to amend its certificate is denied, in part, and granted, in part. Background On November 14, 1990, the Commission issued Opinion No. 357, which certificated Phase I of the Iroquois/Tennessee Project. In Opinion No. 357, the Commission issued certificates of public convenience and necessity authorizing: (1) Iroquois to provide long-term firm transportation service of up to 422,900 Mcf of gas per day for various customers in the northeastern United States; (2) Iroquois and IGTS, Inc. (for the limited purposes described in the order), to construct and operate a new 369.4-mile pipeline extending from the international border between the United States and Canada near Waddington, New York, through eastern New York and western Connecticut, across 1 53 FERC 61,194 (1990). Long Island Sound to an interconnection with LILCO near South Commack, New York; (3) Iroquois to perform the activities specified in Part 284, subpart G, of the Commission's regulations, and to abandon the services authorized in Part 284, subpart G; (4) Iroquois to perform the activities specified in subpart F of Part 157 of the Commission's regulations, and to abandon the services and facilities specified in subpart F of Part 157; (5) Tennessee Gas Pipeline Company (Tennessee) to provide long-term firm transportation service up to 162,795 Mcf of gas per day for various customers in the Northeast United States; and (6) Tennessee to construct and operate pipeline loop and laterals for Phase I service. Proposal Iroquois advises the Commission of certain changes in the partnership interests held by individual Iroquois partners. Iroquois is a limited partnership composed of three partnership blocks: a Canadian Bloc with a 35-percent interest, an LDC Bloc with a 33-percent interest, and a U.S. Interstate Pipeline Bloc with a 32-percent interest. Section 11 of the Limited Partnership Agreement provides that any partner seeking to transfer a portion of its interest in the project must first offer its share to other partners within its partnership bloc. Those partners are then entitled to purchase the shares in proportion to the ownership interest or in such other proportion as mutually agreed. Iroquois has advised the Commission of the following changes: 1. the addition of LILCO Energy Systems (LESCO) (a wholly owned subsidiary of LILCO) as a general partner in the LDC bloc of Iroquois partners; 2. the withdrawal of Connecticut Energy Iroquois Corporation (CEIC) (a wholly owned subsidiary of Southern Connecticut Gas Company) from the LDC bloc through sale of its partnership interest to LESCO and other members of the LDC bloc; and 3. the impending withdrawal of Texas Eastern Iroquois, Inc. (TETCO-Iroquois) (a wholly owned subsidiary of Texas Eastern Transmission Corporation from the interstate pipeline bloc of the partnership through sale of its partnership interest to other members of that bloc. The actual interests to be held as a result of this proposed change in partnership interests are set forth in Appendix A to this order. We turn now to Iroquois' certificate amendment proposals. A. Deferred Cost Recovery Iroquois requests that its certificate be amended to permit Iroquois to treat the initial year of operations separately from an accounting standpoint. Iroquois requests that the Commission allow it to use an accounting treatment whereby Iroquois would postpone plant depreciation for one year and capitalize revenues received and expenses incurred in its initial phase of operation. Said another way, Iroquois would effectively postpone the commencement of plant depreciation until implementation of full service on November 1, 1992, and would treat all revenues and costs during the initial year of operations as capital costs. Thus, Iroquois would continue to treat its project as if it were still "Construction Work in Progress" during the start-up period through October 30, 1992. Iroquois states that its accounting would be based on TransCanada Pipeline Limited's (TransCanada) representation that, assuming final authorizations by the National Energy Board of Canada (Canada NEB) in the GH-5-89 proceeding, TransCanada would have facilities in place to provide Iroquois with 50 MMcf per day of gas beginning on November 1, 1991, increasing to 237 MMcf per day of gas by January 1, 1992, to 382 MMcf per day of gas by April 1992 and reaching 575.9 MMcf per day of gas by November 1, 1992. Iroquois submits that during the initial year, it would provide service at the initial rates approved by the Commission in Opinion No. 357, and that at the end of the initial year it would provide service at new initial rates, levelized over three years based on Iroquois' full proposed level of service of 575.9 MMcf per day of gas, rather than on the volumes which were the basis for the rates approved in Opinion No. 357.2 Iroquois contends that, as proposed, and assuming actual operation at an 87-percent load factor of the phased-in throughput capacity available from TransCanada, the new second-year initial rates would be lower than those which Iroquois' customers would have paid upon commencement of service. Iroquois states that as a result of the foregoing, its proposal would have no rate impact on its customers in its first year and would be beneficial to Iroquois' customers in the following years, pending the filing of Iroquois' next rate case. Iroquois submits that its proposed accounting treatment would, all other things being equal, result in lower initial rates to Iroquois' customers upon commencement of full service on November 1, 1992, as compared with the rate methodology specified in Opinion No. 357. Iroquois states further that it will agree now to implement such lower rates on November 1, 1992.3 Iroquois submits that the Iroquois partners are not seeking to be released from the risk of underutilization of the system due to the lack of upstream capacity on TransCanada. Iroquois explains that it is willing to assume the risk that both the projections for the one-year initial period as well as the cost projections for utilization of the system in the first year of full operation are correct. Iroquois states simply that permitting it to use the proposed accounting treatment will allow the total cost of the project to be recovered in a manner more consistent with actual use of the system. Iroquois argues that by contrast, if it is required to file for an increase in rates immediately upon initiation of service, those customers receiving service during the initial year would be forced to bear an inordinate portion of Iroquois' costs, thereby effectively subsidizing customers using service in later years. Alternatively, without a rate increase or the requested accounting treatment, Iroquois' partners would absorb losses which would render the project unacceptable as a financial investment and thus, at a minimum, result in a delay in commencement of service.4 Iroquois explains that what it seeks to do here is merely what the Commission directed it to do in Opinion No. 357. In this regard, Iro In this regard, Iroquois explains that if it commenced operations without a rate increase or the proposed accounting treatment, the return on equity |