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###### Department of Energy

###### Federal Energy Regulatory Commission

          - [Docket No. CP01-376-000]

                    On May 25, 2001, the Intermountain Municipal Gas Agency (IMGA) [1]                                          and Questar Gas Company (Questar Gas), formerly Mountain Fuel Supply Company, filed a joint petition for a declaratory order by the Commission addressing jurisdictional issues raised by an agreement under which Questar Gas is to undertake natural gas transportation services for municipalities in Utah and Arizona for operation of their retain natural gas utilities.[2] 

                    Questar Gas has agreed to provide transportation service to municipalities in Utah pursuant to a settlement agreement approved by the Public Service Commission of Utah (Utah PSC). The petitioners' joint filing may be viewed on the web at                     *http://www.ferc.fed.us/​online/​rims.htm*                     (call 202-208-2222 for assistance).                

                    Questar Gas' northern Utah distribution system, which is a designated service area pursuant to section 7(f) of the Natural Gas Act (NGA),[3]                                          includes Questar Gas' southern Idaho and northern Utah distribution facilities. Questar Gas' southern distribution system operates as an exempt Hinshaw system pursuant to NGA section 1(c). Questar Gas' northern                           ( print page 30897)                        and southern distribution systems are not interconnected.                

                    Acting at the direction of member municipalities, including Hildale, Utah, Colorado City, Arizona, Kanab, Utah, and Fredonia, Arizona, IMGA has requested that Questar Gas deliver interstate gas supplies from its interconnections with interstate pipelines to the interconnection between Questar Gas' southern system feeder line and Hildale's municipal pipeline at the City of Hurricane, Utah. From that point, the gas supplies would then be transported by IMGA through Hildale's 22-mile municipal pipeline to Hildale, Utah. Some of the gas would then be delivered to a planned municipal pipeline that would cross the Utah border into northern Arizona and then back into Utah, terminating at Kanab, Utah, to service only the residents of Kanab, Utah. In the alternative, a new municipal pipeline could be jointly built to serve not only Kanab, Utah, but also Colorado City, Arizona, and Fredonia, Arizona. The Kaibab Paiute Indian tribe in Arizona may also participate.[4]                                          Each city would connect to the pipeline and distribute and sell the gas through a municipal utility to their respective residential, commercial and industrial end-users.                

In a recent proceeding before the Utah PSC, Hildale and IMGA requested that the Utah PSC order Questar Gas to provide wholesale transportation service for Hildale and similarly situated Utah municipalities. Under the terms of a stipulation resulting in an approved settlement in that proceeding, Questar Gas has agreed to provide such wholesale transportation service, provided it does not jeopardize Questar Gas' NGA section 1(c) Hinshaw exemption.

Accordingly, the petition seeks a declaratory order addressing Questar Gas' concerns regarding the jurisdictional consequences of providing transportation service directly to Kanab, Utah, where the pipeline serving Kanab crosses into Arizona before reentering Utah, and to municipalities, like Colorado City and Fredonia, Arizona, located outside of Utah. Questar Gas requests that the Commission address the jurisdictional implications of such transportation services on Questar's existing NGA section 1(c) Hinshaw exemption for its southern distribution system and Questar Gas' ability to seek in the future a service area determination for this system under NGA section 7(f).

The petition seeks clarification regarding whether Questar Gas would need NGA certificate authority, such as a blanket transportation certificate issued pursuant to section 284.224 of the Commission's regulations (18 CFR 284.224), to render wholesale transportation service or to construct facilities for transportation of gas to municipal utilities located within Questar Gas' existing designated NGA section 7(f) service area or any such service area designated for Questar Gas in the future. In addition, the petition raises the issue of whether Questar Gas would lose its Hinshaw exemption by providing wholesale transportation service, constructing facilities for such service, or connecting its northern section 7(f) system to its southern Hinshaw system so that gas could flow from one to the other.

IMGA requests clarification of the rate implications for Utah municipalities presently receiving wholesale transportation from Questar Gas, as a Hinshaw pipeline, if Questar Gas accepts a section 284.224 blanket transportation certificate to authorize Questar Gas' transportation of gas that ultimately would be distributed by municipal utilities in non-Utah cities.

The petition also raises the issue of whether Questar Gas may elect, pursuant to the Commission's regulations governing service under a section 284.224 blanket certificate, to charge the Utah PSC's currently approved rate for Questar Gas' existing Hinshaw transportation services for municipal utilities in Utah as Questar Gas' rate for transportation service for Arizona municipalities.

There are two ways to become involved in the Commission's review of this petition. First, any person wishing to obtain legal status by becoming a party to the proceeding should, on or before June 25, 2001, file with the Federal Energy Regulatory Commission, 888 First Street, NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the Natural Gas Act (18 CFR 157.10).

A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 14 copies of filings made with the Commission and must mail a copy to the applicants and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.

However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of the comments in support of or in opposition to matters raised in the petition. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition provide copies of their protests only to the party or parties directly involved in the protest.

                    Comments, protests and interventions may be filed electronically via the internet in lieu of paper.                     *See*18 CFR 385.2001(a)(1)(iii) and the instructions on the Commission's web site at                     *http://www/​ferc/​fed/​us/​efi/​doorbell/​htm.*

David P. Boergers,

Secretary.

# Footnotes

1.                             IMGA is a group of Utah municipalities organized pursuant to the Interlocal Cooperation Act, Title 11 Chapter 13 of the Utah Code, which allows Utah municipalities to organize a cooperative legal entity having the same powers as a municipality including those given by the statute.                    
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2.                             Although the municipalities presently have requested only transportation service, Questar Gas believes the same issues will arise if it is requested in the future to make sales of natural gas for resale by the municipalities.                    
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3.                             82 FERC ¶16,057 (1998).                    
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4.                             The petition notes that Indian tribes are identified as entities that can participate in intergovernmental agreements with municipalities under Arizona law A.R.S. 11-951 (1998).                    
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[FR Doc. 01-14437 Filed 6-7-01; 8:45 am]

BILLING CODE 6717-01-M