[Federal Register Volume 69, Number 225 (Tuesday, November 23, 2004)]
[Proposed Rules]
[Pages 68106-68110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-25933]


=======================================================================
-----------------------------------------------------------------------

DEPARMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 157

[Docket No. RM05-1-000]


Regulations Governing the Conduct of Open Seasons for Alaska 
Natural Gas Transportation Projects

November 15, 2004.
AGENCY: Federal Energy Regulatory Commission.

ACTION: Notice of Proposed Rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Federal Energy Regulatory Commission is proposing to amend 
its regulations to establish requirements governing the conduct of open 
seasons for proposals to construct Alaska natural gas transportation 
projects. These proposed regulations are intended to fulfill the 
Commission's responsibilities to issue open season regulations under 
section 103 of the Alaska Natural Gas Pipeline Act (the Act), enacted 
on October 13, 2004. Section 103(e)(1) of the Act directs the 
Commission, within 120 days from enactment of the Act, to promulgate 
regulations governing the conduct of open seasons for Alaska natural 
gas transportation projects, including procedures for allocation of 
capacity. According to section 103(e)(2) of the Act, these regulations 
must include the criteria for and timing of any open season, promote 
competition in the exploration, development, and production of Alaska 
natural gas, and for any open seasons for capacity exceeding the 
initial capacity, provide for the opportunity for the transportation of 
natural gas other than from the Prudhoe Bay and Point Thomson units.

DATES: Comments are due on December 17, 2004.

ADDRESSES: Comments may be filed electronically via the eFiling link on 
the Commission's Web site at http://www.ferc.gov. Commenters unable to 
file comments electronically must send an original and 14 copies of 
their comments to: Federal Energy Regulatory Commission, Office of the 
Secretary, 888 First Street NE., Washington, DC, 20426. Refer to the 
Comment Procedures section of the preamble for additional information 
on how to file comments.

FOR FURTHER INFORMATION CONTACT: Whit Holden, Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426, (202) 502-8089, <a href="/cdn-cgi/l/email-protection#036667746a6d2d6b6c6f67666d43656671602d646c75"><span class="__cf_email__" data-cfemail="e58081928c8bcb8d8a8981808ba583809786cb828a93">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Notice of Proposed Rulemaking

I. Introduction

    1. The Alaska Natural Gas Pipeline Act became law on October 13, 
2004. Under the Act, Congress mandated the expedited processing by the 
Commission of any application for an Alaska natural gas transportation 
project, namely any natural gas pipeline system that carries natural 
gas derived from that portion of Alaska lying north of 64 degrees north 
latitude to the border between Alaska and Canada. The new law 
recognizes the importance of our Alaskan natural gas resources in 
meeting the rapidly rising demand for natural gas in the United States. 
The timely development of an Alaska natural gas transportation project 
to bring Alaskan natural gas to markets in Alaska and in the lower 48 
states will help ensure that the nation has adequate supplies of 
natural gas at reasonable prices.\1\ To this end, the Act charges the 
Commission with the responsibility of implementing an expedited 
approval process consistent with the Act. The Act specifically directs 
the Commission to prescribe the rules which will apply to any open 
season held for the purpose of soliciting interest in, or making 
binding commitments to the acquisition of capacity on, any Alaska 
natural gas transportation project, including the criteria for 
allocating capacity among competing bidders.
---------------------------------------------------------------------------

    \1\ Secretary of Energy Spencer Abraham, in requesting the 
National Petroleum Council (NPC) to undertake a study of natural gas 
in the United States in the 21st century, sought ``the NPC's advice 
on actions that can be taken by industry and Government to increase 
the productivity and efficiency of North American natural gas 
markets and to ensure adequate and reliable supplies of energy for 
consumers.'' The NPC's resulting report found that the solution 
includes accessing ``gas resources from previously inaccessible 
areas of the United States and gas from the Arctic.'' Balancing 
Natural Gas Policy--Fueling the Demands of a Growing Economy, A 
Report of the National Petroleum Council, at 7 (Sept. 25, 2003) (NPC 
Report).
---------------------------------------------------------------------------

    2. To date, it has been the Commission's policy, developed through 
its orders and opinions, that all new interstate pipeline construction 
be preceded by a non-discriminatory, non-preferential ``open season'' 
process through which potential shippers may seek and obtain firm 
capacity rights. Congress has determined that it is necessary to 
supplant Commission policy with specific regulations governing the 
conduct of open seasons for an Alaska natural gas transportation 
project in order to take into account the tremendous cost, long lead-
time, and environmental sensitivities that are unique to such a 
project. In this regard, Congress has emphasized that the Commission's 
regulations are to be designed to promote competition in the 
exploration, development, and production of Alaska natural gas and, as 
to any open season for expansion of the initial capacity of any Alaska 
natural gas transportation project, the Commission's regulations are to 
specifically provide the opportunity for gas other than Prudhoe Bay and 
Point Thomson production to have access to the pipeline.
    3. In summary, the Commission sees as its goal the creation of an 
open season process that provides non-discriminatory access to capacity 
on any Alaska natural gas transportation project while, at the same 
time, ensuring sufficient economic certainty to support the 
construction of the pipeline and

[[Page 68107]]

thereby provide a stimulus for exploration, development and production 
of Alaska natural gas.
    4. Congress has also given the Commission the statutory authority 
to require an expansion of an Alaska natural gas transportation project 
to address the circumstance where additional capacity is required but 
the pipeline owners have not committed to expand the system on a timely 
basis. Consequently, section 105(a) of the Act authorizes the 
Commission, upon the request of one or more persons, and upon the 
satisfaction of certain statutory criteria, to order the expansion of 
any Alaska natural gas transportation project. Section 105(e) 
authorizes the Commission to issue such regulations as are necessary to 
fulfill this responsibility. While the Commission may issue such 
regulations in the future, the regulations which are the subject of 
this rulemaking pertain solely to open seasons for initial capacity or 
expansion capacity other than expansion capacity ordered pursuant to 
section 105 of the Act.

II. Summary of Proposed Regulations

    5. Proposed section 157.30 sets out the purpose of Subpart B. That 
purpose is to prescribe rules for the conduct of any open season on any 
Alaska natural gas transportation project. Section 103(e)(2) of the Act 
provides that these regulations must include the criteria for and 
timing of any open season, promote competition in the exploration, 
development, and production of Alaska natural gas, and, for any open 
seasons for capacity exceeding the initial capacity, provide for the 
opportunity for the transportation of natural gas other than from the 
Prudhoe Bay and Point Thomson units.\2\
---------------------------------------------------------------------------

    \2\ The Prudhoe Bay and Point Thomson units are gas fields 
located on Alaska's North Slope with a total of approximately 35 Tcf 
of known gas reserves.
---------------------------------------------------------------------------

    6. Proposed section 157.31 defines the terms ``Alaska natural gas 
transportation project'' and ``Commission'' consistent with definitions 
provided in the Act.
    7. Proposed section 157.32 provides that regulations proposed will 
apply to any application to the Commission for a certificate of public 
convenience and necessity or other authorization for an Alaska natural 
gas transportation project, whether filed pursuant to the Natural Gas 
Act, the Alaska Natural Gas Transportation Act of 1976 (15 U.S.C. 719 
et seq.), or the Alaska Natural Gas Pipeline Act, and to applications 
for expansion of such projects, other than expansions of Alaska natural 
gas transportation projects that are requested and ordered pursuant to 
section 105 of the Act.
    8. Although the Commission is authorized in section 105(e) to issue 
regulations governing expansions requested under section 105(a), that 
authorization is separate from the authority granted the Commission in 
section 103(e) to issue regulations for open seasons. Moreover, the 
Commission is directed to issue the section 103(e) regulations within 
120 days from the date of issuance of the Act, whereas the Commission 
is not under any time constraints in considering the need for any 
regulations to carry out its responsibilities under section 105. 
Therefore, the Commission is focusing solely on those issues relevant 
to open seasons under section 103 of the Act at this time. However, the 
proposed section 157.32 leaves open the possibility that the 
requirements of this subpart might, in a given case, have application 
or be suited to an expansion ordered under section 105 of the Act.
    9. Proposed section 157.33 requires that any application for a 
certificate of public convenience and necessity for a proposed Alaska 
natural gas transportation project include a showing that the applicant 
conducted an open season for capacity on its proposed project that 
fully complies with the requirements of this subpart. To ensure 
compliance with this requirement, proposed section 157.33 provides that 
any application lacking such a showing will be dismissed as deficient.
    10. Proposed section 157.34 sets forth the criteria for and timing 
of any open season for an Alaska natural gas transportation project. 
Proposed section 157.34(a) provides for public notice of an open season 
at least 30 days prior to the commencement of the open season through 
methods including postings on Internet websites, press releases, direct 
mail solicitations, and other advertising. The Commission believes that 
such prior notice would serve several purposes. First, it would reduce, 
if not eliminate, any advantage that one potential shipper might have 
as a result of prior knowledge of the open season. Second, it would 
afford both project sponsors and prospective shippers a period of time 
prior to the actual open season period in which they can address and 
possibly resolve any questions or problems regarding the terms and 
conditions of the open season. Third, it would afford potential 
shippers time to prepare submissions in response to the open season.
    11. Proposed section 157.34(b) lists the information that any 
notice of open season for an Alaska natural gas transportation project 
must contain. The Commission recognizes in this section that a 
potential applicant for an Alaska natural gas transportation project 
might find it necessary or appropriate to initiate an open season 
before some of the information can be determined. Indeed, the 
Commission understands that in a given situation, such information 
cannot be reasonably determined until after an open season is held. The 
Commission can envision, for instance, a situation where a prospective 
project sponsor might first conduct a non-binding open season as a 
manner of gathering information and assessing demand, on the basis of 
which the sponsor would then be able to conduct a second, binding open 
season containing information sufficiently detailed to permit 
prospective shippers to enter into binding precedent agreements.
    12. The proposed list of information contained in proposed section 
157.34(b) is intentionally inclusive. In this area, as well as others, 
the Commission is soliciting comments received in response to this 
Notice of Proposed Rulemaking to fashion a final rule that meets the 
Commission's goal which is, as stated above, to create an open season 
process that provides non-discriminatory access to capacity on any 
Alaska natural gas transportation project while, at the same time, 
ensuring sufficient economic certainty to support the construction of 
the pipeline and thereby provide a stimulus for exploration, 
development and production of Alaska natural gas.
    13. Proposed section 157.34(c) provides that an open season for an 
Alaska natural gas transportation project must remain open for a period 
of at least 90 days. This minimum 90-day period for prospective 
shippers to examine the open season materials and make service requests 
to the pipeline is intended to establish some parity among shippers, 
given that certain shippers, primarily the ``anchor shippers,'' \3\ may 
have had advance information relating to the pipeline's proposed 
services, tariff provisions, and cost projections. Ninety days is 
proposed as an adequate amount of time in which to conduct a reasoned 
evaluation of the open season materials and to help level the playing 
field. The Commission considers this provision essential to ensuring 
that the Commission's regulations promote competition in the 
exploration,

[[Page 68108]]

development, and production of Alaska natural gas.
---------------------------------------------------------------------------

    \3\ ``Anchor shipper(s)'' as used in the natural gas industry 
means one or a very few shippers with very large, significant 
volumes of natural gas that will fully financially support the 
initial design and cost of a project.
---------------------------------------------------------------------------

III. Public Comment and Expedited Procedures

    14. The Act mandates that the Commission issue regulations 
implementing the open season requirements within 120 days of the date 
of its enactment. Congress and the Commission consider the promulgation 
of these regulations to be a matter of critical importance to the 
construction and development of, and access to, an Alaska natural gas 
transportation project. Therefore, the Commission intends to promulgate 
final regulations by February 10, 2005. To that end, public comments on 
this notice are due on December 17, 2004. The Commission will carefully 
weigh and consider all public comments received.
    15. In addition to seeking comments on the proposed rules contained 
herein, the Commission seeks comments on the following questions:
    (1) Should the Commission require that prospective applicants for 
Alaska natural gas transportation projects, before conducting open 
seasons, file with the Commission proposals for how the open seasons 
will be conducted? If so, should the proposals be filed for notice and 
comment, or for a decision or pre-determination by the Commission that 
such proposals conform to the regulations? What other procedures are 
suitable to facilitate the expeditious resolution of objections or 
concerns regarding any open season for an Alaska natural gas 
transportation project?
    (2) Should the Commission issue regulations now, pursuant to 
section 105 of the Alaska Natural Gas Pipeline Act, with respect to the 
Commission's authority to require expansion of any Alaska natural gas 
transportation project? If so, should those regulations deal with the 
rate treatment (rolled-in or incremental) of any such expansion?
    (3) Should the Commission allow pre-subscribed, reserved capacity 
such as was allowed in connection with open seasons for certain new 
Outer Continental Shelf pipeline facilities? See, e.g., Garden Banks 
Gas Pipeline, LLC, 78 FERC ] 61,066 (1997); Green Canyon Pipe Line Co., 
47 FERC ] 61,310 (1989)?
    (4) Congress has made expressly clear that the open season rules 
must promote competition in the exploration, development, and 
production of Alaska natural gas. Commenters are invited to discuss 
whether, and to what extent, any tension may exist between this 
mandated purpose and the application of existing Commission policies to 
the open season rules due to circumstances unique to access to capacity 
on any Alaska natural gas transportation project.
    (5) To what extent should the Commission's open season regulations 
address the issues of tying the receipt of capacity on any Alaska 
natural gas transportation project to ancillary services involving the 
treatment of gas to meet specified gas quality requirements or 
allocating capacity at a gas treatment plant or other facility?

IV. Information Collection Statement

    16. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting, record keeping, and public 
disclosure (collections of information) imposed by an agency.\4\ The 
following information collection requirements contained in this 
proposed rule are being submitted to the Office of Management and 
Budget (OMB) for review under section 3507(d) of the Paperwork 
Reduction Act of 1995.\5\ FERC identifies the information disclosed 
under Part 157 as FERC-537. The Commission has submitted this 
information collection to OMB for review and clearance under emergency 
processing procedures.\6\ OMB approval has been requested by December 
31, 2004.
---------------------------------------------------------------------------

    \4\ 5 CFR 1320.11.
    \5\ 44 U.S.C. 3507(d).
    \6\ 5 CFR 1320.13.
---------------------------------------------------------------------------

    17. Comments are solicited on the Commission's need for this 
information, whether the information will have practical utility, the 
accuracy of the provided burden estimates, ways to enhance the quality, 
utility, and clarity of the information to be collected, and any 
suggested methods for minimizing respondent's burden, including the use 
of automated information techniques. The burden estimates for complying 
with this rule are as follows:

----------------------------------------------------------------------------------------------------------------
                                                     Number of       Number of       Hours per     Total annual
                 Data collection                    respondents      responses       response          hours
----------------------------------------------------------------------------------------------------------------
FERC-537........................................              30               1              80            2400
                                                 -----------------
    Totals......................................  ..............  ..............  ..............            2400
----------------------------------------------------------------------------------------------------------------

    Total Annual Hours for Collection: 2400 hrs. These are mandatory 
information collection requirements.
    Information Collection Costs: The Commission seeks comments on the 
cost to comply with these requirements. It has projected the average 
annualized cost for all respondents to be $139,000 (2400 x $58.00).
    Title: FERC-537 ``Gas Pipeline Certificates: Construction, 
Acquisition and Abandonment.''
    Action: Proposed Information Collection.
    OMB Control Nos.: 1902-0060. The applicant shall not be penalized 
for failure to respond to this collection of information unless the 
collection of information displays a valid OMB control number.
    Respondents: Business or other for profit.
    Frequency of Responses: One-time implementation.
    Necessity of Information: On October 13, 2004, Congress enacted the 
Alaska Natural Gas Pipeline Act. Section 103(e)(1) of the Act directs 
the Commission to issue regulations within 120 days from the enactment 
of the Act. Congress and the Commission consider the issuance of these 
regulations to be of critical importance to the construction and 
development of and access to Alaska natural gas transportation 
projects. The Commission must issue a final rule by February 10, 2005. 
The Commission seeks emergency processing of this proposed information 
collection because the use of normal clearance procedures is reasonably 
likely to cause a statutory ordered deadline to be missed. The proposed 
rule revises the reporting requirements contained in 18 CFR Part 157. 
Specifically, the Alaska Natural Gas Pipeline Act authorized the 
Commission to expedite application for any natural gas transportation 
projects that carries gas derived from that portion of Alaska lying 
north of 64 degree north latitude to the border between Alaska and 
Canada. Specifically, the Commission is proposing rules to establish 
open seasons to accept bids for capacity on any Alaska natural gas 
transportation project. The Alaska Natural Gas Pipeline Act regulations 
must (1) include the

[[Page 68109]]

criteria for and timing of any open season, (2) promote competition in 
the exploration, development and production of Alaska natural gas, and 
(3) for any open seasons for capacity exceeding the initial capacity, 
provide for the opportunity for the transportation of natural gas other 
than from Prudhoe Bay and Point Thomson.
    Internal Review: The Commission has assured itself, by means of 
internal review, that there is specific, objective support for the 
burden estimates associated with the information requirements. The 
Commission's Office of Energy Projects will review the data included in 
the application to determine whether the proposed facilities are in the 
public interest as well as for general industry oversight. This 
determination involves, among other things, an examination of adequacy 
of design, cost, reliability, redundancy, safety and environmental 
acceptability of the proposed facilities. These requirements conform to 
the Commission's plan for efficient information collection, 
communication and management within the natural gas industry.
    18. Interested persons may obtain information on the reporting 
requirements by contacting the Commission, as follows: Federal Energy 
Regulatory Commission, 888 First Street, NE, Washington, D.C. 20426 
(Attention: Michael Miller, Office of the Executive Director, 202-502-
8415, fax: 202-273-0873), e-mail: <a href="/cdn-cgi/l/email-protection#a9c4c0cac1c8ccc587c4c0c5c5ccdbe9cfccdbca87cec6df"><span class="__cf_email__" data-cfemail="4b262228232a2e2765262227272e390b2d2e3928652c243d">[email protected]</span></a>.
    19. For submitting comments concerning the collection of 
information and the associated burden estimate(s)s including 
suggestions for reducing this burden, please send your comments to the 
contact listed above and to the Office of Management and Budget, Room 
10202 NEOB, 725 17th Street, NW., Washington, DC 20503 (Attention: Desk 
Officer for the Federal Energy Regulatory Commission, 202-395-4650, 
fax: 202-395-7285).

V. Environmental Analysis

    20. The Commission is required to prepare an Environmental 
Assessment or an Environmental Impact Statement for any action that may 
have a significant adverse effect on the human environment.\7\ No 
environmental consideration is raised by the promulgation of a rule 
that is procedural in nature or does not substantially change the 
effect of legislation or regulations being amended.\8\ The proposed 
rule establishes requirements governing the conduct of open seasons for 
proposals to construct Alaska natural gas transportation projects and 
does not substantially change the effect of the underlying legislation 
or regulations being revised.
---------------------------------------------------------------------------

    \7\ Order No. 486, Regulations Implementing the National 
Environmental Policy Act, 52 FR 47897 (Dec. 17, 1987), FERC Stats. & 
Regs. Preambles 1986-1990 ] 30,783 (1987).
    \8\ 18 CFR 380.4(a)(2)(ii) (2004).
---------------------------------------------------------------------------

VI. Regulatory Flexibility Act Statement

    21. The Regulatory Flexibility Act of 1980 (RFA) \9\ generally 
requires a description and analysis of final rules that will have 
significant economic impact on a substantial number of small entities. 
The Commission is not required to make such an analysis if a rule would 
not have such an effect.
---------------------------------------------------------------------------

    \9\ 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    22. The Commission concludes that this rule would not have such an 
impact on small entities. Most companies regulated by the Commission do 
not fall within the RFA's definition of a small entity.\10\
---------------------------------------------------------------------------

    \10\ 5 U.S.C. 601(3), citing to section 3 of the Small Business 
Act, 15 U.S.C. 623. Section 3 of the Small Business Act defines a 
``small-business concern'' as a business which is independently-
owned and operated and which is not dominant in its field of 
operation.
---------------------------------------------------------------------------

VII. Comment Procedures

    23. The Commission invites interested persons to submit comments on 
the matters and issues proposed in this notice to be adopted, including 
any related matters or alternative proposals that commenters may wish 
to discuss. Comments are due on December 17, 2004. Comments must refer 
to Docket No.RM05-1 and must include the commenter's name, the 
organization they represent, if applicable, and their address in their 
comments. Comments may be filed either in electronic or paper format.
    24. Comments may be filed electronically via the eFiling link on 
the Commission's web site at http://www.ferc.gov. The Commission 
accepts most standard word processing formats and commenters may attach 
additional files with supporting information in certain other file 
formats. Commenters filing electronically do not need to make a paper 
filing. Commenters that are not able to file comments electronically 
must send an original and 14 copies of their comments to: Federal 
Energy Regulatory Commission, Office of the Secretary, 888 First Street 
NE., Washington, DC, 20426.
    25. All comments will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below. Commenters on this proposal are 
not required to serve copies of their comments on other commenters.

VIII. Document Availability

    26. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
Internet through FERC's Home Page (http://www.ferc.gov) and in FERC's 
Public Reference Room during normal business hours (8:30 a.m. to 5 p.m. 
eastern time) at 888 First Street, NE., Room 2A, Washington DC 20426.
    27. From FERC's Home Page on the Internet, this information is 
available in the Commission's document management system, eLibrary. The 
full text of this document is available on eLibrary in PDF and 
Microsoft Word format for viewing, printing, and/or downloading. To 
access this document in eLibrary, type the docket number excluding the 
last three digits of this document in the docket number field.
    28. User assistance is available for eLibrary and the FERC's Web 
site during normal business hours. For assistance, please contact FERC 
Online Support at 1-866-208-3676 (toll free) or 202-502-6652 (e-mail at 
<a href="/cdn-cgi/l/email-protection#12545740515d7c7e7b7c77416762627d606652545740513c757d64"><span class="__cf_email__" data-cfemail="3f797a6d7c70515356515a6c4a4f4f504d4b7f797a6d7c11585049">[email protected]</span></a>), or the Public Reference Room at 202-502-
8371, TTY (202) 502-8659 (e-mail at <a href="/cdn-cgi/l/email-protection#08787d6a64616b267a6d6e6d7a6d666b6d7a676765486e6d7a6b266f677e"><span class="__cf_email__" data-cfemail="bfcfcaddd3d6dc91cddad9dacddad1dcdacdd0d0d2ffd9dacddc91d8d0c9">[email protected]</span></a>).

List of Subjects in 18 CFR Part 157

    Administrative practice and procedure; Natural gas; Reporting and 
recordkeeping requirements.

    By direction of the Commission.
Magalie R. Salas,
Secretary.

    In consideration of the foregoing, the Commission proposes to amend 
Part 157, Chapter I, Title 18, Code of Federal Regulations, as follows.

PART 157--APPLICATIONS FOR CERTIFICATES OF PUBLIC CONVENIENCE AND 
NECESSITY AND FOR ORDERS PERMITTING AND APPROVING ABANDONMENT UNDER 
SECTION 7 OF THE NATURAL GAS ACT

    1. The authority citation for part 157 continues to read as 
follows:

    Authority: 15 U.S.C. 717-717w.

    2. Subpart B is added to Part 157 to read as follows:
Subpart B--Open Seasons for Alaska Natural Gas Transportation Projects
Sec.
157.30 Purpose.
157.31 Definitions.

[[Page 68110]]

157.32 Applicability.
157.33 Requirement for open season.
157.34 Notice of open season.
157.35 Capacity allocation.
157.36 Open season for expansion.

Subpart B--Open seasons for Alaska Natural Gas Transportation 
Projects


Sec.  157.30  Purpose.

    This subpart establishes the procedures for conducting open seasons 
for Alaska natural gas transportation projects, as defined herein.


Sec.  157.31  Definitions.

    (a) ``Alaska natural gas transportation project'' means any natural 
gas pipeline system that carries Alaska natural gas to the border 
between Alaska and Canada (including related facilities subject to the 
jurisdiction of the Federal Energy Regulatory Commission).
    (b) ``Commission'' means the Federal Energy Regulatory Commission.


Sec.  157.32  Applicability.

    These regulations shall apply to any application to the Commission 
for a certificate of public convenience and necessity or other 
authorization for an Alaska natural gas transportation project, whether 
filed pursuant to the Natural Gas Act, the Alaska Natural Gas 
Transportation Act of 1976, or the Alaska Natural Gas Pipeline Act, and 
to applications for expansion of such projects. Absent a Commission 
order to the contrary, these regulations are not applicable in the case 
of an expansion ordered by the Commission pursuant to section 105 of 
the Alaska Natural Gas Pipeline Act.


Sec.  157.33  Requirement for open season.

    Any application for a certificate of public convenience and 
necessity for a proposed Alaska natural gas transportation project must 
include a demonstration that the applicant has conducted an open season 
for capacity on its proposed project, in accordance with the 
requirements of this sub-part. Failure to provide the requisite 
demonstration will result in an application being dismissed as 
deficient.


Sec.  157.34  Notice of open season.

    (a) Notice. A prospective applicant must provide reasonable public 
notice of an open season, at least 30 days prior to the commencement of 
the open season, through methods including postings on Internet 
websites, press releases, direct mail solicitations, and other 
advertising. In addition, a prospective applicant must provide actual 
notice of an open season to the State of Alaska and to the Federal 
Coordinator for Alaska Natural Gas Transportation Projects.
    (b) Contents of Notice. Notice of the open season shall contain at 
least the following information, to the extent that such information is 
known or determined at the time the notice is issued:
    (1) The general route of the proposed project, including receipt 
and delivery points, and any alternative routes under consideration;
    (2) Size and design capacity (including proposed certificate 
capacity to the extent that it differs from design capacity), and any 
estimated phase-in dates for capacity beyond initial capacity;
    (3) Maximum allowable operating pressure and expected actual 
operating pressure;
    (4) Delivery pressure;
    (5) Projected in-service date;
    (6) An estimated unbundled transportation rate, stated on an MMBtu 
basis, for each service offered, including reservation rates for 
pipeline capacity, interruptible transportation rates, usage rates, 
fuel retention percentages, and other applicable charges, or 
surcharges, such as annual charge adjustment (ACA);
    (7) The estimated costs of proposed facilities and cost of service, 
and expected return on equity used to justify the transportation rates;
    (8) Negotiated rate and other rate options under consideration;
    (9) Quality specifications and any other requirements applicable to 
gas to be delivered to the project;
    (10) Terms and conditions for each service offered;
    (11) Creditworthiness standards to be applied to prospective 
shippers;
    (12) The date, if any, by which potential shippers and the 
prospective applicant must execute precedent agreements;
    (13) A detailed methodology for determining the value of bids;
    (14) The methodology by which capacity will be awarded, in the case 
of over-subscription, clearly stating all terms that will be 
considered, including price and contract term;
    (15) Required bid information, whether bids are binding or non-
binding, receipt and delivery point requirements, the form of a 
precedent agreement and time of execution, definition and treatment of 
non-conforming bids;
    (16) The projected date for filing an application with the 
Commission; and
    (17) All other information that may be relevant to the open season, 
including information pertaining to the proposed service to be offered, 
projected pipeline capacity and design, proposed tariff provision, and 
cost projections, made available to or in the hands of any potential 
shipper, including any affiliates of the project sponsor and any 
shippers with pre-subscribed capacity, prior to the issuance of the 
public notice of open season.
    (c) Timing. A prospective applicant must provide prospective 
shippers at least 90 days from the date on which notice of the open 
season is given within which to submit requests for transportation 
services.


Sec.  157.35  Capacity allocation.

    Capacity allocated as a result of any open season shall be awarded 
without undue discrimination or preference of any kind.


Sec.  157.36  Open seasons for expansions.

    Any open season for capacity exceeding the initial capacity of an 
Alaska natural gas transportation project must provide the opportunity 
for the transportation of gas other than Prudhoe Bay or Point Thomson 
production.

[FR Doc. 04-25933 Filed 11-22-04; 8:45 am]
BILLING CODE 6717-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>