pipelines. Issues related to existing capacity entitlements, transportation obligations once interconnected, and costs beyond the physical facilities of the interconnection are left unresolved by the proposal. Further, we need to be concerned with the manner in which these issues are to be resolved. If the FERC needs to be involved, it should be in a way that reduces rather than increases its regulatory oversight. More specifically, while the proposed legislation provides for the payment of physical interconnection costs, it does not address the additional operation expenses incurred by the pipeline as a result of the interconnections interconnection. Additional increase a pipeline's administrative costs relating to dispatching, metering and balancing of the additional gas flows from the new interconnection. These costs currently are rolled-in to the pipeline's cost of service and are paid by all customers. These costs may exceed the rate paid by the party requesting the interconnection resulting in increased rates to other customers. In addition, when assessing the impact of a proposed interconnection on the pipeline's ability to render adequate service to its customers, the Commission needs to examine the impact not only to the point of interconnection, but also on the existing service to all upstream and downstream customers. b. Does the section achieve its stated purpose of authorizing the FERC to order upstream interconnection Such an Under the appropriate circumstances, Brooklyn Union would support the expansion of the Commission's authority to order an interstate pipeline to physically interconnect with other facilities to receive natural gas into the pipeline. interconnect would have to be at the applicant's expense. should only be able to issue such an order if there was a positive finding that the interconnect will enhance competition and not impair the pipeline's ability to render service to its downstream customers. The FERC Brooklyn Union supports the concept of having the Federal Energy Regulatory Commission act as the sole agency required to conduct an environmental impact statement. The authority of the Commission, however, to charge an applicant for the documentation costs is not restrained and could result in excessive and unreasonable costs. Senator Bingaman's amendments to S. 341 accomplish the same but not downstream interconnection, i.e., bypass? Yes, the language in Section 201 appears to exclude the FERC from authorizing downstream interconnections for by-pass purposes. C. What are the technical questions raised by the manner in which section 201 is drafted? How would you resolve these questions? Please provide suggested substitute language if to do so would be helpful. Proposed Section 7(a)(3) must be modified to specifically provide that when determining whether the interconnection impairs the pipeline's ability to render adequate service, the Commission must assess the interconnection's impact not only at the point of interconnection, but also the impact to the pipeline's existing services all the way to the city gate. In addition, proposed Section 7(a)(2) must be revised to include the same notice, protest and opportunity for hearing contained in Section 7(a)(1). Without this addition, the Commission would not be able to determine whether the interconnection has met the standards identified in proposed Section 7(a)(3) . result as the provisions of this section, but in a more direct and flexible manner. Brooklyn Union would prefer, as the Bingaman amendment allows, that applicants choose from a list of FERCdesignated contractors for the preparation of environmental documents necessary to assess project, as opposed to a FERCselected contractor. Brooklyn Union generally supports allowing transportation on behalf of any person as a means of enhancing the competitive market for natural gas. However, the 30-day prior notice of construction provided to a state commission is not adequate to permit a local distribution company to respond to issues of service degradation and possible increased rates. It is suggested that section 203 contain an expedited prior notice and protest procedure whereby issues of this sort can be resolved in a timely manner by the This procedure should have the following Commission. characteristics: Notice should include a complete description of The class of protesters would be limited to O existing customers of the pipeline who would be The protest must be accompanied by specific claims The protest would be due in 30 days. must The Federal Energy Regulatory Commission the written submissions. Section 204 - Optional Certificate Process Brooklyn Union supports the streamlining of the construction certificate process. However, there must be some limited opportunity by impacted third parties to raise legitimate concerns. This optional certificate process should have a notice and protest procedure as described in section 203. We believe that the provisions in this section that allow parties requesting service after completion of construction who are unable to reach agreement with the pipeline, to petition the FERC to set rates is inconsistent with the goals elsewhere of allowing parties to negotiate rates and terms of service. It also creates |