On June 30, 1977, Lawrence Hydroelectric Associates (Applicant or LHA) filed an application for a major license for the proposed Lawrence Hydroelectric Project, FERC No. 2800. The project would be located in Lawrence, Massachusetts, on the Merrimade River.

An order issuing a major license and authorization to negotiate for the sale of securities was issued on December 4, 1978, 5 FERC ¶ 61,202.

On December 15, 1978, Applicant filed herein an application with this Commission, pursuant to Section 204 of the Federal Power Act, seeking authorization to (1) secure a construction loan of up to $25 million, and (2) issue 25 year secured notes (equal to 80% of project costs) of up to $18,656,000, and to provide equity capital (equal to 20% of project costs) at the time of completion of the project.

Applicant is a limited partnership organized pursuant to the laws of Massachusetts. LHA consists of a number of individual partners with limited liability and a general partner, the Essex Development Associates (EDA), also a Massachusetts partnership, having its principal office and principal place of business in Boston, Suffolk County, in the Commonwealth of Massachusetts.

A construction loan has been secured from Chase Manhattan Bank of up to $25 million, to be secured by a mortgage interest in the licensed facilities, with an interest rate (floating) of 125% of a base rate. The base rate will be the higher of Chase's prime rate or the interest rate of P1 commercial paper plus 2%. In addition, a commitment fee equal to 2% on the unused amount of the loan will be payable beginning December 15, 1978. The first take down of the construction loan is planned for January 1979. The construction loan will mature on April 30, 1981, or later if completion of construction is delayed.

Upon completion of the project, 25 year secured notes will be issued under a collateral trust indenture between Applicant, a wholly owned special purpose corporate trustee (the trustee) of the Applicant and Mutual Life Insurance Company of New York (MONY), in an amount of $18,656,000 (80% of permanent financing). MONY will also commit to purchase additional notes up to an amount of $1,865,600 in the event of unanticipated construction cost overruns.

The interest rate on these secured notes will be 10%, escalating after April 1, 1986, in two steps to 11%, if the Project is not by then on a "cost of service" basis.

Partnership capital (20% of the permanent financing) will be obtained from the general partner of LHA, The Essex Company and from limited partner investors of up to $4,600,000, with the right of overcall of up to an additional $400,000 in the event of construction cost overruns.

Written notice of the application has been given to the Massachusetts Department of Public Utilities and to the Governor of Massachusetts. Notice has also been given by publication in the Federal Register, stating that any person desiring to be heard or to make any protest with reference to the application should on or before January 3, 1979, file petitions or protests with the Federal Energy Regulatory Commission, Washington, D.C. 20426. No petition, protest or request to be heard has been received.

The Commission finds:

(1) The Applicant, a partnership, is a licensee, within the meaning of Section 204 of the Federal Power Act, subject to the jurisdiction of the Commission.

(2) The proposed issuance of securities, as described above, will constitute an issuance of

securities within the purview of Section 204 of the Federal Power Act.

(3) Applicant is not organized and operating in a State under the laws of which the security issues involved are regulated by a state commission within the meaning of Section 204(f) of the Act; and the proposed issuance of securities is, therefore, not exempt by virtue of that Section from the requirements of Section 204 of the Act.

(4) Under the circumstances of the case, sufficient cause has been shown for exempting the proposed issuance of securities from the competitive bidding requirements of Sections 34.1a(a) and (b) of the Commission's Regulations under the Federal Power Act.

(5) The proposed issuance of securities, as hereinafter authorized, is consistent with the provisions of Section 204(a) of the Federal Power Act. The Commission orders:

(A) The proposed issuance of the construction loan of up to $25,000,000 by negotiation upon the terms and conditions, and for the purpose specified in the application, as described above, and further the proposed issuance of the 25 year Secured Notes up to an amount of $20,521,600 ($18,656,000 + $1,865,600), by negotiated underwriting may be completed without further action by this Commis

sion provided that the Notes are issued in accordance with the terms and conditions contained in the application, as described above, are hereby authorized subject to provisions of this order.

(B) The proposed issuance of securities as described above shall be exempted from the competitive bidding requirements of the Commission's Regulations.

(C) Applicant shall amend the application pursuant to the requirements of Section 34.9(c) of the Commission's Regulations under the Federal Power Act within ten days after the consummation of the above mentioned transactions.

(D) This authorization shall expire within 120 days from the date of issuance of this order unless the transactions herein authorized are

consummated.

(E) The foregoing authorization is without prejudice to the authority of this Commission or any other regulatory body with respect to rates, service, accounts, valuation, estimates or determinations of cost or any other matter whatsoever now pending or which may come before this Commission.

(F) Nothing in this order shall be construed to imply any guarantee or obligation on the part of the United States with respect to any securities to which this order relates.

On July 19, 1978, Northwest Pipeline Corporation (Applicant),' filed in Docket No. CP78-435 an

application pursuant to Section 7 of the Natural Gas Act, as implemented by Section 157.7(g) of the

Regulations thereunder (18 CFR 157.7(g)), for a certificate of public convenience and necessity authorizing the construction, removal and relocation and for permission for and approval of the abandonment, during the calendar year 1979, and operation of field gas compression and related metering and appurtenant facilities, all as more fully set forth in the application.

The purpose of this budget-type authorization is to enable Applicant to act with reasonable dispatch in the construction and abandonment of facilities which will not result in changing Applicant's system salable capacity, or service from that which was authorized prior to the filing of the instant application.

Applicant proposes a total cost not to exceed $3,000,000 for the construction, relocation, removal, or abandonment of field compression facilities proposed, with no single project cost to exceed $1,000,000; and such costs to be financed from working capital. Applicant requests a waiver of the single project cost limitation imposed by Section 157.7(g)(ii) of the Commission's Regulations to permit the single project cost to be increased from $500,000 to $1,000,000.

According to the Handy-Whitman Index of Public Utility Construction Costs, (Baltimore: Whitman, Reguardt and Associates, 1978) Bulletin No. 107, Table G-5 pp. 26-29, the direct cost of constructing and installing field gas compression facilities has increased 73.2 percent in the Plateau Region during the period from July 1, 1973 to January 1, 1978. Commission Order No. 474, issued May 9, 1973, 49 FPC 1084, in Docket No. R-442 established the present cost limitations contained in Section 157.7(g) of the Commission's Regulations. (18 CFR 157.7(g)) According to the Handy-Whitman Index, the single project cost limitation of $500,000 established in 1973 due to inflation is equivalent to approximately $866,000 in 1978. For that reason the waiver of the single project cost limitation will be granted. Since the work to be performed pursuant to this budget authorization will be performed during calendar year 1979, Applicant will be authorized to expend, up to an amount equal of the $500,000 limit established in 1973 adjusted for inflation according to the Handy-Whitman Index for 1979.

The facilities to be constructed or abandoned as hereinbefore described and as more fully described in the application in this proceeding, are proposed to be used or are used in the transportation of natural gas in interstate commerce subject to the jurisdiction of the Commission, and the construction and abandonment thereof by Applicant are subject to the requirements of Subsections (c) and (e) and Subsection (b) of Section 7 of the Natural Gas Act, respectively.

After due notice by publication in the Federal Register on August 10, 1978 (43 F.R. 35531), no petitions to intervene, notices of intervention, or

protests to the granting of the application have been filed.

At a hearing held on December 7, 1978, the Commission on its own motion received and made a part of the record in this proceeding all evidence, including the application and exhibits thereto, submitted in support of the authorization sought herein, and upon consideration of the record, The Commission finds:

(1) Applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of the Natural Gas Act and the requirements, Rules and Regulations of the Commission thereunder.

(2) The construction and operation of the proposed facilities by Applicant are required by the public convenience and necessity and a certificate therefor should be issued as hereinafter ordered and conditioned.

(3) The abandonments proposed by Applicant are permitted by the public convenience and necessity and should be approved as hereinafter ordered.

(4) The total expenditure proposed herein is within the limit prescribed by Section 157.7(g) of the Regulations under the Natural Gas Act.

(5) Good cause has been shown to waive the single project cost limitation prescribed by Section 157.7(g) of the Regulations under the Natural Gas Act subject to the new limitation as hereinbefore described and as hereinafter ordered.

The Commission orders:

(A) Upon the terms and conditions of this order, a certificate of public convenience and necessity is issued authorizing Applicant, Northwest Pipeline Corporation, to construct under Section 157.7(g) of the Regulations, during the calendar year 1979, the proposed facilities as hereinbefore described, and as more fully described in the application, and to operate such facilities only to transport natural gas from existing sources of supply.

(B) The certificate issued by paragraph (A) above and the rights granted thereunder are conditioned upon Applicant's compliance with all applicable Commission Regulations under the Natural Gas Act and particularly the general terms and conditions set forth in paragraph (g) of Section 157.7 and in paragraphs (a), (e) and (f) of Section 157.20 of such Regulations.

(C) Applicant shall submit within 60 days after the expiration of the authorization granted by paragraphs (A) above and (D) below statements in compliance with Section 157.7(g)(iv) of the Commission's Regulations under the Natural Gas Act, as applicable.

(D) Upon the terms and conditions of this order, permission for and approval of the abandonment by Applicant of the facilities hereinbefore