AEP ENERGY SERVICES, INC.
FE DOCKET NO. 98-11-NG
I. DESCRIPTION OF REQUEST
On February 3, 1998, AEP Energy Services, Inc. (AEPES) filed an application with the Office of Fossil Energy of the Department of Energy (DOE), under section 3 of the Natural Gas Act (NGA)(1) and DOE Delegation Order Nos. 0204-111 and 0204-127, for blanket authorization to import up to 200,000 Mcf of natural gas per day from Canada and up to 200,000 Mcf of gas per day from Mexico, and to export up to 200,000 Mcf of gas per day to Canada and up to 200,000 Mcf of gas per day to Mexico. The term of this authorization would be for a period of two years beginning on the date of the initial delivery of either imports or exports, whichever occurs first.
AEPES, a Ohio corporation with its principal place of business in Columbus, Ohio, is a wholly-owned subsidiary of American Electric Power Company, Inc. AEPES intends to import and export the gas under spot and short-term transactions, either on its own behalf or as the agent for others. The requested authorization does not involve the construction of new pipeline facilities.
The application filed by AEPES has been evaluated to
determine if the proposed import/export arrangement meets the
public interest requirement of section 3 of the NGA, as amended
by section 201 of the Energy Policy Act of 1992 (Pub. L. 102-486). Under section 3(c), the import of natural gas and the
export of natural gas from or to a nation with which there is in
effect a free trade agreement requiring national treatment for
trade in natural gas is deemed to be consistent with the public
interest and must be granted without modification or delay. The
authorization sought by AEPES to import and export natural gas
from and to Canada and Mexico, nations with which free trade
agreements are in effect, meets the section 3(c) criterion and,
therefore, is consistent with the public interest. This blanket
order authorizes transactions under contracts with terms of no
longer than two years. Consistent with our treatment of similar
blanket applications, there will be no restriction on the daily
volumes that may be imported and exported. This maximizes the
flexibility of spot market importers and exporters to provide gas
supplies to meet customer demand.
Pursuant to section 3 of the Natural Gas Act, it is ordered that:
A. AEP Energy Services, Inc. (AEPES) is authorized to import up to 146 Bcf of natural gas from Canada, and to import up to 146 Bcf of natural gas from Mexico. AEPES is also authorized to export up to 146 Bcf of natural gas to Canada, and to export up to 146 Bcf of natural gas to Mexico. The term of this authorization is for a period of two years beginning on the date of the initial delivery of either imports or exports, whichever occurs first. The natural gas may be imported and exported at any border point between the United States and Canada and Mexico.
B. Within two weeks after deliveries begin, AEPES shall provide written notification to the Office of Natural Gas & Petroleum Import and Export Activities of the date that the first import or export of natural gas authorized in Ordering Paragraph A above occurred.
C. With respect to the natural gas imports and the natural gas exports authorized by this Order, AEPES shall file with the Office of Natural Gas & Petroleum Import and Export Activities, within 30 days following each calendar quarter, quarterly reports indicating whether imports or exports have been made. Quarterly reports must be filed whether or not initial deliveries have begun. If no imports or exports have been made, a report of "no activity" for that calendar quarter must be filed. If imports or exports occur, AEPES must report total monthly volumes in Mcf and the average purchase price of gas per MMBtu at the international border. The reports also shall provide the details of each import and export transaction, including: (1) the name of the seller(s); (2) the name of the purchaser(s); (3) the estimated or actual duration of the agreement(s); (4) the name of the U.S. transporter(s); (5) the point(s) of entry and exit; and (6) the geographic market(s) served (for imports, by State). For import transactions only, the report shall also include: (1) whether sales are being made on an interruptible or firm basis; and, if applicable, (2) the per unit (MMBtu) demand/commodity/reservation charge breakdown of the contract price.
D. The reporting requirements described in Ordering Paragraphs B and C of this Order shall be filed with the Office of Natural Gas & Petroleum Import and Export Activities, Fossil Energy, Room 3E-042, FE-34, Forrestal Building, 1000 Independence Avenue, S.W., Washington, D.C. 20585.
E. The first quarterly report required by Ordering Paragraph C of this Order is due not later than April 30, 1998, and should cover the period from the date of this Order until the end of the first calendar quarter, March 31, 1998.
Issued in Washington, D.C., on February 09, 1998.
John W. Glynn
Manager, Natural Gas Regulation
Office of Natural Gas & Petroleum
Import and Export Activities
Office of Fossil Energy
1. 15 U.S.C. § 717b.