CONSUMERS ENERGY COMPANY
FE DOCKET NO. 98-49-NG
I. DESCRIPTION OF REQUEST
On June 26, 1998, Consumers Energy Company (CECo) 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 204-127, for blanket authorization to import up to 73 Bcf of natural gas from Canada over a two-year term beginning on August 1, 1998.(2) CECo, a Michigan corporation with its principal place of business in Jackson, Michigan, is a wholly-owned subsidiary of CMS Energy. CECo will import the gas under short-term and spot market transactions for its own account, as well as the accounts of others for which CECo may agree to act as agent. The proposed authorization does not involve the construction of new pipeline facilities.
The application filed by CECo has been evaluated to determine if the proposed import 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 from 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 CECo to import natural gas from Canada, a nation with which a free trade agreement is 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.
Pursuant to section 3 of the Natural Gas Act, it is ordered that:
A. Consumers Energy Company (CECo) is authorized to import up to 73 Bcf of natural gas from Canada over a two-year term beginning on August 1, 1998, through July 31, 2000. This natural gas may be imported at any point on the border of the United States and Canada.
B. With respect to the natural gas imports authorized by this Order, CECo 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 of natural gas have been made. Quarterly reports must be filed whether or not initial deliveries have begun. If no imports of natural gas have been made, a report of "no activity" for that calendar quarter must be filed. If imports have occurred, CECo must report total monthly volumes in Mcf and the average purchase price of gas per MMBtu at the international border. The reports shall also provide the details of each import 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 United States transporter(s); (5) the point(s) of entry; (6) the geographic market(s) served; (7) whether sales are being made on an interruptible or firm basis; and, if applicable, (8) the per unit (MMBtu) demand/commodity/reservation charge breakdown of the contract price.
C. Quarterly reports shall be filed with the Office of Natural Gas & Petroleum Import and Export Activities, Fossil Energy, Room 3E-042, Forrestal Building, 1000 Independence Avenue, S.W., Washington, D.C. 20585.
D. The first quarterly report required by Ordering Paragraph B of this Order is due not later than October 30, 1998, and should cover the period from August 1, 1998, until the end of the third calendar quarter, September 30, 1998.
Issued in Washington, D.C., on July 01, 1998.
John W. Glynn
Manager, Natural Gas Regulation
Office of Natural Gas & Petroleum
Import and Export Activities
Office of Fossil Energy
1. 1/ 15 U.S.C. § 717b.
2. 2/ CECo's current authorization, granted by DOE/FE Order No. 1177 on June 24, 1996 (1 FE ¶ 71,274), expires July 31, 1998.