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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

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metering and balancing of the additional gas flows from the new


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

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service to its customers, the Commission needs to examine the

impact not only to the point of interconnection, but also on the

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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. Such interconnect would have to be at the applicant's expense. The FERC


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


Section 202

NEPA Compliance

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

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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.

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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 FERC

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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

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Notice should include a complete description of
the project and the reasonably foreseeable impact
on rates and service to existing customers. There

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of protesters would be limited to

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resolve protests in 60 days and would be given
statutory authority to resolve protests based


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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

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