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Aep Ferc Filing

Aep Ferc Filing

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Published by James Bruggers
This is American Electric Power's filing with FERC, objecting to losing access to natural gas as part of the Bluegrass Pipeline project.
This is American Electric Power's filing with FERC, objecting to losing access to natural gas as part of the Bluegrass Pipeline project.

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Published by: James Bruggers on Aug 16, 2013
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09/04/2013

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UNITED STATES OF AMERICABEFORE THEFEDERAL ENERGY REGULATORY COMMISSION
Texas Gas Transmission, LLC ) Docket No. CP13-485-000
MOTION FOR LEAVE TO REPLY AND REPLY OFAMERICAN ELECTRIC POWER SERVICE CORPORATION
Pursuant to Rules 212 and 213 of the Federal Energy Regulatory Commission’s (“FERC”or “Commission”) Rules of Practice and Procedure,
1
American Electric Power ServiceCorporation, on behalf of its subsidiary AEP Generating Company (“AEG”) (collectively“AEP”), submits this motion for leave to reply and reply to Texas Gas Transmission LLC’s(“Texas Gas”) July 16, 2013 Motion for Leave to Answer and Answer in this proceeding (“July16 Answer”). As explained below, Texas Gas has not satisfied its statutory obligations to ensurethat the “present or future public convenience and necessary permits [the] abandonment” of 623miles of pipeline segments from Eunice, Louisiana to Hardinsburg, Kentucky.
2
The Commissionshould require that Texas Gas satisfactorily address AEP’s concerns regarding the loss of directaccess to the interstate pipeline grid as a prerequisite to permitting the abandonment proposed byTexas Gas.
I. MOTION FOR LEAVE TO REPLY
AEP respectfully requests that the Commission grant this motion for leave to reply to theJuly 16 Answer. The Commission has permitted answers that contribute to an understanding of the issues or assist the decision-making process.
3
AEP’s reply accomplishes both objectives;
1
18 C.F.R. §§ 385.212, 385.213.
2
15 U.S.C. § 717f(b).
3
 
See, e.g.
,
Virginia Electric and Power Company
, 124 FERC ¶ 61,207 at P 22 (2008) (accepted answer as itaided in the decision-making process);
Pepco Holdings, Inc.
125 FERC ¶ 61,130 at P 24 (2008) (accepted answer because it provided information to assist in the decision-making process);
Potomac-Appalachian
(continued)
 
 
- 2 -therefore, the Commission should accept it.
II. REPLY
In the July 16 Answer, Texas Gas contends that there will be “sufficient availablecapacity to meet anticipated demands post-abandonment.”
4
 
Texas Gas bases this conclusion onthe fact that no shipper purchased capacity during an Open Season held prior to the submissionof the abandonment application. Texas Gas further suggests that, because AEP did not participate in the Open Season, AEP is “essentially arguing” that the Commission should requireTexas Gas to retain unutilized capacity on an interruptible basis.
5
Texas Gas misconstruesAEP’s position in this regard.AEP notes that, because it has been going through a Public Utilities Commission of Ohio-ordered corporate separation with respect to its operations in Ohio, which includes acontract with Ohio Power Company for the purchase of power generated by the LawrenceburgPlant, AEP was not in a position to commit to firm capacity during the Open Season and will not be in that position until corporate separation is finalized. However, that does not mean that AEPis insisting on interruptible capacity being made available indefinitely. AEP’s real concern is thetotal remaining available capacity from the segment of pipeline from Slaughters, Kentucky toLebanon, Ohio projected as a result of the proposed abandonment, beginning in December of 
Transmission Highline, LLC 
, 122 FERC ¶ 61,188 at P 23 (2008) (accepted answer because assisted indecision-making process);
Southern California Edison Co
., 122 FERC ¶ 61,187 at P 19 (2008) (answer assists in decision-making process);
S. Natural Gas Co.,
121 FERC ¶ 61,118, at P 5 (2007) (answer to protest accepted because it assisted the Commission in understanding the issues and ensured a completerecord);
 N.Y. Indep. Sys. Operator, Inc.,
121 FERC ¶ 61,112 at P 4 (2007) (answer to protest accepted  because it provided information that assisted the Commission in its decision-making process);
PJM  Interconnection, L.L.C.,
116 FERC ¶ 61,179 at P 9 (2006);
 Delmarva Power & Light Co.
, 93 FERC ¶61,098 at P 11 (2000) (allowing answers to insure a complete and accurate record).
4
 
See
July 16 Answer at 3.
5
 
See
July 16 Answer at 4.
 
 
 
- 3 -2014. According to Texas Gas’s Unsubscribed Firm Capacity Update – July 16, 2013(“Unsubscribed Firm Capacity Update”), as of December 1, 2014, assuming the request for abandonment is approved, only 69,000 MMBTu/Day of firm capacity will be available over theSlaughters to Lebanon segment, compared to the 458,000 MMBtu/Day projected to be availableas of August 1, 2013.
6
Yet AEG’s 1,100 MW Lawrenceburg Plant is designed to receive220,000 MMBTu/Day at full load. Thus, even if AEP were to purchase the available firmcapacity over the segment from Slaughters to Lebanon, it would not be enough to reliably servethe Lawrenceburg Plant after the proposed abandonment.
7
 Furthermore, as a result of the stringent Environmental Protection Agency (“EPA”)Mercury and Air Toxics Standards (“MATS”), AEP is exploring the option of converting one of its coal-fired generating plants to burn natural gas received via the Texas Gas pipeline. TexasGas’s proposed abandonment frustrates this effort, as it would result in a sharp decline of capacity available to make the delivery of natural gas even possible without the rebuilding of thiscapacity in the near future.
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 The Commission has previously denied a request to abandon a pipeline where theapplicant was unable to “support [the] contention that the [facility was] underutilized to theextent that it is no longer essential to the provision of open-access interstate service.”
9
 
In this
6
The Unsubscribed Firm Capacity Update is provided as Attachment A.
7
The pie charts included as Attachment B depict the sources of gas used to serve the Lawrenceburg Plant for 2012 and for the first six months of 2013. As shown in the charts, in 2012, over 73% of the gas received bythe Lawrenceburg Plant was purchased from Arkansas/Louisiana, which was transported between Eunice,Louisiana through Slaughters, Hardinsburg, and finally Lawrenceburg, Indiana. For the first six months of 2013, the percentage increased to over 82%. The portion of gas purchased from the Gulf of Mexico for  both periods was transported using the same route.
8
It is worth nothing that the Unsubscribed Firm Capacity Update provides estimates only through March2015. April 2015 is when a large portion of coal fired capacity will be shutting down or need to be incompliance with the EPA MATS, thereby potentially impacting electric grid reliability.
9
 
Transcontinental Gas Pipe Line Company, LLC 
, 129 FERC ¶ 61,255, at P 41 (2009).
See also
 
(continued)

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