UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

) Texas Gas Transmission, LLC ) Docket No. CP15-____-000 ) ABBREVIATED APPLICATION OF TEXAS GAS TRANSMISSION, LLC FOR AUTHORIZATION TO CONSTRUCT AND OPERATE PIPELINE FACILITIES

Pursuant to Section 7(c) of the Natural Gas Act (“NGA”), 15 U.S.C. § 717f(c)

(2012), and Section 157.7 of the Regulations of the Federal Energy Regulatory

Commission (“Commission”), 18 C.F.R. § 157.7 (2014), Texas Gas Transmission, LLC

(“Texas Gas”) submits this abbreviated application for issuance of a certificate of public convenience and necessity for authorization to construct, own, operate, and maintain a

new natural gas pipeline lateral consisting of approximately 22.5-miles of 24-inch

diameter pipe, a meter and regulator station, and appurtenant auxiliary facilities,

extending from Texas Gas’ Midland 3 Compressor Station to an interconnection with

Tennessee Valley Authority’s (“TVA”) proposed combined-cycle natural gas-fired power plant located west of the town of Paradise, Muhlenberg County, Kentucky (“Western

Kentucky Lateral” or “Project”). The Project will provide a design capacity of up to

230,000 million British thermal units per day (“MMBtu/d”) of firm natural gas

transportation capacity. The Project will serve TVA’s Paradise Fossil Plant (“Paradise

Plant”). Texas Gas’ Project is required by the present and future public convenience and

necessity. Texas Gas requests issuance of an order granting a certificate of public

convenience and necessity for the Project by December 2015, to allow Texas Gas to

begin full construction by January 2016, and place the Project facilities in service to meet TVA’s initial operation date, of September 2, 2016, for test gas service. Achieving this in-service date is critical due to the contractual agreement with TVA and for TVA complying with the Environmental Protection Agency’s (“EPA”) Mercury and Air

Toxics Standards (MATS). In support of this Application, Texas Gas submits the following information:

I. APPLICANT

The exact legal name of the applicant is Texas Gas Transmission, LLC, and its

principal place of business is 9 Greenway Plaza, Suite 2800, Houston, Texas 77046.

Texas Gas is a limited liability company organized and existing under the laws of the

State of Delaware. Texas Gas is engaged in the business of transporting natural gas in

interstate commerce, and is a “natural-gas company” as defined by Section 2(6) of the

NGA.1 Texas Gas is authorized to do business in the States of Texas, Louisiana,

Arkansas, Mississippi, Tennessee, Kentucky, Indiana, Illinois, and Ohio.

1 15 U.SC § 717a(6). 2 The name, title, mailing address, telephone, and e-mail addresses of those persons to whom correspondence and communications concerning this Application should be directed are as follows:

Michael E. McMahon A. Gregory Junge Sr. Vice President and General Counsel Michael R. Pincus J. Kyle Stephens Van Ness Feldman, LLP Vice President, Regulatory Affairs & Rates 1050 Thomas Jefferson St., NW M. L. Gutierrez Seventh Floor Director, Regulatory Affairs Washington, DC 20007 Texas Gas Transmission, LLC Phone: (202) 298-1800 9 Greenway Plaza, Suite 2800 Fax: (202) 338-2361 Houston, TX 77046 [email protected] Tel: (713) 479-8059 [email protected] Fax: (866) 459-7336 [email protected] [email protected] [email protected]

Each of the identified persons is designated to receive service in accordance with

18 C.F.R. § 385.203(b)(3). Texas Gas requests the Commission to place these persons on the official service list for this proceeding, pursuant to 18 C.F.R. § 385.2010. Texas Gas requests that the Commission waive Rule 203(b)(3) to allow designated service to each of these persons.

II. BACKGROUND

Texas Gas designed the proposed Western Kentucky Lateral to meet the specific market demand of TVA’s Paradise Plant in Western Kentucky. The need for the

proposed Project is demonstrated by the Precedent Agreement executed by TVA that

supports the full design capacity of the Project.

In November 2013, the TVA Board of Directors approved a resolution to

construct and operate a new combined cycle natural gas-fired electric generation plant at

3 the Paradise Plant in Muhlenberg County, Kentucky and retire the existing coal Units 1 and 2 when the natural gas plant is available. TVA is constructing the new natural gas- fired generating plant and replacing its existing coal Units 1 and 2, facilitating TVA’s compliance with the EPA’s MATS.

Texas Gas executed a Precedent Agreement with TVA that provides for a design capacity of up to 230,000 MMBtu/d of firm transportation service on the proposed lateral at negotiated rates for delivery to TVA’s Paradise Plant in Muhlenberg County, Kentucky

for a primary term of 20 years. Texas Gas designed the Project to provide a design capacity of up to 230,000 MMBtu/d of firm natural gas transportation service to meet

TVA’s demonstrated demand for natural gas transportation service.

Texas Gas will provide open access, Part 284 transportation service on the

Western Kentucky Lateral. Texas Gas submitted, in Docket No. RP15-440-000, on

February 6, 2015, an NGA Section 4 proceeding, a proposal to implement new firm and interruptible lateral rate schedules to provide for transportation on customer laterals and

Texas Gas proposes to provide service on the Western Kentucky Lateral pursuant to those rate schedules if they are approved (“Lateral Rate Schedule Proposal”).2

III. DESCRIPTION OF FACILITIES

Texas Gas proposes to construct, own, operate, and maintain a natural gas

pipeline lateral consisting of approximately 22.5-miles of 24-inch diameter pipe, a meter

2 Texas Gas’s proposal includes the addition of new Rate Schedules FLS (Firm Lateral Service) and ILS (Interruptible Lateral Service) to Sections 5.20 and 5.21 of its Tariff, respectively, as well as conforming changes to other portions of its Tariff as necessary to implement the new services. Texas Gas did not propose any rates for FLS and ILS in the Lateral Rate Schedule Proposal but proposed that the initial rates for each market lateral would be established in the applicable certificate proceeding for each lateral project and once approved those rates will be included under the FLS and ILS rate schedules. 4 and regulator station, and appurtenant auxiliary facilities, extending from Texas Gas’

Midland 3 Compressor Station to a proposed interconnection with TVA’s Paradise Plant

both located in Muhlenberg County, Kentucky. Texas Gas’ proposed new meter and regulator station at the delivery point to the Paradise Plant is located at Mile Post 22 of

the proposed lateral. The general location of the Project is provided in Exhibit F.

A detailed description of the proposed facilities to be constructed is included in

Exhibit F-I, Environmental Report. The flow diagrams and data which demonstrate the

effect of the proposed facilities on the existing operational capabilities and conditions are

included in Exhibit G, G-II. The estimated capital costs of the proposed facilities are

approximately $81 million as detailed in the attached Exhibit K.

The facilities proposed herein will be constructed in compliance with all applicable rules and regulations, and operated in accordance with the applicable federal pipeline safety regulations of the United States Department of Transportation.

IV. AUTHORIZATIONS REQUESTED

Texas Gas requests authorization to construct, own, operate, and maintain (1) a

new natural gas pipeline lateral consisting of approximately 22.5-miles of 24-inch

diameter pipe, (2) a new meter and regulator station, and (3) appurtenant auxiliary

facilities. The pipeline facilities will extend from Texas Gas’ existing Midland 3

Compressor Station facilities to an interconnection at the proposed TVA Paradise Plant located in Muhlenberg County, Kentucky.

In addition, Texas Gas requests authorization to establish an initial NGA Section

7(c) recourse rate for firm and interruptible services using the proposed Western

Kentucky Lateral facilities as shown on Exhibit N. 5 V. MARKET NEED AND LATERAL RATE SCHEDULE

The Project is fully supported by the binding Precedent Agreement Texas Gas

entered into with TVA to transport a total of 230,000 MMBtu/d on the Western Kentucky

Lateral. Prior to the Project being placed in service, TVA will execute firm transportation and negotiated rate agreements for the lateral having a primary term of 20

years.

TVA has also acquired firm transportation capacity on Texas Gas’ mainline

system pursuant to the Open Season held on July 28 through August 1, 2014, and will

execute both firm transportation and negotiated rate agreements for that capacity prior to the Project being placed into service. TVA’s firm transportation contract demand under

rate schedule FT on Texas Gas’ mainline system from Zone SL to the proposed Western

Kentucky Lateral Zone 3 is 160,000 MMBtu/d, as described in Appendix C to the

Precedent Agreement. TVA also contracted for 40,000 MMBtu/d for Summer No-Notice

service under the SNS rate schedule and 40,000 MMBtu/d of Winter No-Notice service

under the WNS rate schedule on Texas Gas’ mainline system for deliveries to the

Western Kentucky Lateral in Zone 3, as described in Appendices A and B to the

Precedent Agreement. The Precedent Agreement is included in Exhibit I and filed as

Privileged and Confidential information in Volume III as part of this Application.

Firm and interruptible transportation services for the Western Kentucky Lateral

will be provided under new firm and interruptible lateral transportation services pursuant

to Part 284 Subpart G of the Commission’s regulations. Texas Gas filed the Lateral Rate

Schedule Proposal to establish these new firm and interruptible rate schedules for

6 customer laterals in a separate NGA Section 4 proceeding on February 6, 2015. Under

the Lateral Rate Schedule Proposal, the initial rates for each applicable customer lateral

are established in a separate certificate proceeding, and, once approved, those rates will be included under the FLS and ILS rate schedules.3 The initial rate established for the

Western Kentucky Lateral in this proceeding will be included under Rate Schedules FLS

and ILS if the Commission approves both the Lateral Rate Schedule Proposal and the

instant certificate application.4

The incremental recourse rate for the Western Kentucky Lateral will be based

solely on the costs of the specific lateral project and only the customers using that lateral

will pay for that service.5 Service on the Western Kentucky Lateral will be “lateral only”

transportation services and does not give parties subscribing to those services any right to

utilize any other portion of Texas Gas’ system.6 Although Texas Gas is constructing the

Western Kentucky Lateral to serve the need of the specific Project customer, the new services under the Lateral Rate Schedule Proposal will provide for open-access rate

service on a non-discriminatory basis. The specific rates charged for the Western

Kentucky Lateral service are based solely on the costs established in this Application for

3 The Western Kentucky Lateral qualifies as a “Customer Lateral” under the Lateral Rate Schedule Proposal, which defines Customer Lateral as “pipeline facilities consisting of a pipeline lateral and related project facilities as set forth in a related certificate proceeding, which extend from a point on Texas Gas’ existing system to a point of interconnection with the facilities of other parties, for the benefit of only one or a limited number of customers.” Texas Gas Transmittal Letter at 3, Docket No. RP15-440-000 (Feb. 6, 2015). 4 In Equitrans, L.P., 146 FERC ¶ 61,143 at P 10 (2014), the Commission approved a pipeline add lateral services to its Tariff prior to constructing a project-specific lateral. The Commission held that, “prior to constructing a project specific lateral pursuant to [the lateral rate schedule],” the pipeline “will need to file a NGA section 7 certificate application,” and the “Commission will evaluate the incrementally- priced rates and service that are offered under [the lateral rate schedule] in that certificate proceeding.” 5 See Texas Eastern Transmission LP, 99 FERC ¶ 61,308, at p. 62,300 (2002). 6 Id.; East Tennessee Natural Gas, LLC, 114 FERC ¶ 61,122, at P 18 (2006). 7 certificate authority to construct and operate the Project.7 The Precedent Agreement also provides the Project’s customer with firm transportation services on the mainline portion of Texas Gas’ system that will be contracted for separately under Texas Gas’ FT, SNS and WNS Rate Schedules (the applicable firm transportation services on Texas Gas’ mainline system).

Exhibit N included herein sets forth the derivation of the daily reservation rate for the Project. The reservation rate is based on billing determinants equal to the firm transportation contract quantities for the new firm service on the Western Kentucky

Lateral and the incremental cost of service of the Project. The proposed recourse rate for firm service for the Project will be $0.1761 per MMBtu utilizing rate determinants of

230,000 MMBtu/d. The proposed recourse rate for interruptible service will be the 100 percent load fact equivalent of the firm transportation rate. Consistent with Commission policy on incremental rates, Texas Gas will maintain a separate record of capital costs for the Project in its books and accounts. The Project will have no impact on rates currently charged to Texas Gas’ existing customers.

In accordance with the Commission’s Negotiated Rate Policy Statement,8 prior to

commencement of service on the Western Kentucky Lateral, Texas Gas will execute and

file all negotiated rate service agreements with the Commission.

Texas Gas will maintain separate and identifiable accounts for gas quantities transported, billing determinants, rate components, surcharges, and revenues associated

7 See Equitrans, L.P., 146 FERC ¶ 61,143, at P 9 (2014) (quoting Transcontinental Gas Pipe Line Co., LLC, 127 FERC ¶ 61,297, at P 8 (2009)). 8 Natural Gas Pipelines Negotiated Rate Policies and Practices, 104 FERC ¶ 61,134 (2003), order on reh’g, 114 FERC ¶ 61,042 (2006). 8 with the negotiated rates in sufficient detail so that they can be identified in Statement G

and I in any future NGA Section 4 rate case.

VI. ENVIRONMENTAL MATTERS

Texas Gas will construct the Western Kentucky Lateral in a manner intended to minimize any adverse environmental impacts. As further detailed in the Environmental

Report, attached as Exhibit F-I, the proposed construction will incorporate proven construction techniques and mitigation procedures and will result in no significant impact to the quality of human health, the environment, or affected landowners. Texas Gas has developed the proposed facilities in a manner intended to avoid impact on landowners or sensitive resources such as streams, wetlands, forests, and any threatened or endangered species or any cultural resource to the extent possible. Utilizing construction and

restoration methods that comply with the Commission’s May 2013 “Upland Erosion

Control, Revegetation, and Maintenance Plan” and “Wetland and Waterbody

Construction and Mitigation Procedures” will ensure that any adverse impacts will be limited and temporary. In addition, copies of the applicable agency consultation letters necessary under the Endangered Species Act, the National Historic Preservation Act, the

Clean Air Act, and the Clean Water Acts are included in the attached Environmental

Report. Texas Gas has engaged in consultations and coordination with the affected federal, state, and county government agencies concerning the proposed construction activities associated with the Project, and will continue to discuss specific concerns or requirements should they be raised.

Texas Gas has designed the Project to minimize impact to affected landowners as

discussed here and in the Environmental Report. Texas Gas will construct the Project in 9 a manner intended to minimize any adverse environmental impacts.

Beginning in April 2014 and to facilitate stakeholder communication, Texas Gas

contacted elected officials at the local, state, and federal level to discuss the Project. The

discussion covered the pipeline system, engineering and construction, environmental

protection, the regulatory process, and survey/route information. In June 2014, Texas

Gas mailed out letters to affected landowners requesting permission to survey their

property. Texas Gas received survey permission for 88% of the total Project route.

In addition, Texas Gas developed a project specific website which can be accessed from Texas Gas’ general website (www.txgt.com). Stakeholders will be able to

click on the “Expansion Projects” tab and select the “Western Kentucky Lateral Project”.

The website addresses at a minimum topics as: General Information about the Project;

Landowner Frequently Asked Question’s; Information about the Regulatory Process;

Environmental Protection; Safety; and a “Contact Us” section. The website will also

provide information about how to access the FERC’s website to review and obtain copies

of public filings.

In order to minimize the Project footprint, Texas Gas proposes to co-locate a total

of approximately thirty-five (35) percent of the proposed pipeline within existing utility

right-of-way. Construction of the proposed Project will affect approximately 356.4 acres

of land. Ground disturbance will occur within Texas Gas’ construction right-of-way, which is primarily within active agricultural areas. Following construction, approximately 208.4 acres of land consisting of those areas necessary to facilitate construction, including the construction right-of-way, staging and contractor areas, additional temporary workspaces, and temporary access roads will be restored to

10 preconstruction conditions. Permanent impact areas associated with the operation of the

proposed facilities, totaling approximately 148.0 acres, will include the new maintained

pipeline right-of-way, associated aboveground facilities, and new permanent access

roads.

The Project will be constructed in a manner intended to minimize any adverse

environmental impacts and the Environmental Report, attached as Exhibit F-1, supports

the conclusion that, with appropriate mitigation conditions, the Project will only have a

minor, temporary impact on the environment and landowners, and will not significantly

affect the natural or human environment.

VII. PUBLIC CONVENIENCE AND NECESSITY

The Commission's Certificate Policy Statement9 established criteria for

determining whether there is a need for a proposed project and whether the proposed project will serve the public interest. The Certificate Policy Statement explains that,

in deciding whether to authorize the construction of major new pipeline facilities, the

Commission balances the public benefits of the project against the project's potential

adverse consequences.10 The Commission’s stated goal is to give appropriate

consideration to the enhancement of competitive transportation alternatives, the

possibility of over-building, the subsidization by existing customers, the applicant's

responsibility for unsubscribed capacity, the avoidance of unnecessary disruptions of

the environment, and the unneeded exercise of eminent domain in evaluating new

9 Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶ 61,227 (1999), order clarifying statement of policy, 90 FERC ¶ 61,128, order further clarifying statement of policy, 92 FERC ¶ 61,094 (2000) (“Certificate Policy Statement”). 10 Tennessee Gas Pipeline Co., 92 FERC ¶ 61,142, at p. 61,519-20 (2000). 11 pipeline construction.11 Once the applicant demonstrates that the benefits to be

achieved by the project will outweigh potential adverse effects, the Commission will

find that the project is required by the public convenience and necessity.12 This

Project is consistent with the criteria of the Certificate Policy Statement, is in the

public interest, and is required by the public convenience and necessity.

The proposed Project satisfies all of the criteria for justifying a new project under the Commission’s Certificate Policy Statement and is required by the public convenience and necessity. The Project will serve demand for natural gas transportation by allowing

Texas Gas to provide up to 230,000 MMBtu/d of new firm transportation service on the

Western Kentucky Lateral to TVA. TVA has executed a Precedent Agreement for

230,000 MMBtu/d of firm transportation service on the Western Kentucky Lateral to be delivered to its combined-cycle natural gas-fired power plant which has an initial operation date of September 2, 2016.

A. The Project Satisfies the Threshold No-subsidy Requirement

Under the Certificate Policy Statement, the threshold requirement for applicants

proposing new construction projects is that the applicant must be prepared to

financially support the project without relying on subsidization from existing

customers.13

Texas Gas proposes to establish an incremental recourse rate to recover the construction, operation, and maintenance costs associated with the Western Kentucky

Lateral. The rate will be a lateral only rate, consistent with Commission policy on lateral

11 Id. 12 Certificate Policy Statement, 88 FERC ¶ 61,277, at p. 61,746. 13 Id. at p. 61,745. 12 rate design, and is designed to recover only the costs of the Project.14 There will be no subsidy from existing customers, and the Project satisfies the Commission’s threshold requirement under the Certificate Policy Statement.

B. Benefits of the Project Outweigh the Minimal Potential Adverse Impact on Landowners, Communities, or Existing Pipelines and their Customers

The Commission’s Certificate Policy Statement analysis continues with an

identification of potentially adverse effects of the Project on the existing customers of

the applicant proposing the Project, existing pipelines in the geographic market area and

their captive customers, if any, or landowners and communities affected by any new

construction, and a determination of whether the applicant has made efforts to eliminate

or minimize those effects.15

Potential Adverse Impacts – Other Pipelines

The Project will have minimal impact on existing pipelines or utilities, or

their captive customers, in the area. TVA has requested firm transportation service

from Texas Gas and has entered into binding Precedent Agreement. The Project is being constructed to provide firm service to serve TVA’s Paradise Plant where TVA is building a new natural gas-fueled facility. TVA’s existing plant is currently operated by three coal-fired generation units, two of which will be replaced with a new natural gas-fired combined cycle unit. TVA’s Paradise Plant is not currently

14 See, e.g., Colorado Interstate Gas Company, 122 FERC ¶ 61,257 at P 60 (2008) (“[U]nder the Policy Statement the Commission continues its long-standing policy of pricing non-integrated, stand-alone projects or projects involving laterals that serve a single or limited number of customers at separate incremental rates based on the cost of the facilities. In these situations, the rate is an additive rate and the rate can either be lower or higher than the system-wide rates. Transportation on the incrementally priced facilities is limited to those facilities, i.e., the policy on flexible receipt and delivery points to access other portions of [the pipeline’s] system does not apply without an additional charge and vice versa.”). 15 Certificate Policy Statement, 88 FERC ¶ 61,227 at p. 61,745. 13 served by an interstate natural gas pipeline and the approval of the Project would not

impact other pipelines or their captive customers.

Potential Adverse Impact – Landowners and Communities

The Project has been designed in a manner to minimize the impact on landowners

and the environment. Texas Gas participated in meetings with local, state, and federal

officials and individual and agency stakeholders to identify and resolve issues of

potential concern (such as route alternatives, environmental matters and special

construction needs) at an early juncture. Texas Gas will continue to work with landowners after this application is filed and has offered to work with these stakeholders to minimize any concerns about the amount of permanent right-of-way and temporary workspace needed to construct this Project. Texas Gas remains committed to securing any needed rights-of-way through good faith negotiations wherever possible. Texas Gas has minimized the impacts of the Project on landowners and communities. Providing TVA access to natural gas to fuel its new natural gas-fired units at the Paradise Plant allows TVA to meet its compliance obligations under the EPA’s MATS and low-cost power to the people of the

Tennessee Valley.

Public Benefits

Through the design of the Project, Texas Gas has minimized all potential

impacts of the Project on its existing customers, other pipelines and their captive

customers, and landowners and communities. To the extent that adverse impacts

still occur, the benefits of the Project outweigh these impacts.

14 Strong market support for the Project is demonstrated by TVA’s contractual

commitments. The Project will provide 230,000 MMBtu/d of transportation

capacity to serve TVA’s proposed new natural gas-fired generating plant that will use natural gas to meet TVA’s commitments “to bring reliable, low-cost energy to the people of the Tennessee Valley.”16 TVA explained that its “approximately $1

billion investment in building gas-fired units . . . will help TVA achieve its vision of

being one of the nation’s leaders in providing low-cost, cleaner power.”17 TVA is building the combined-cycle natural gas-fired power plant to comply with the

MATS, recently issued by the U.S. EPA, regulating emissions of hazardous air pollutants.18 The Western Kentucky Lateral will help TVA and its customers realize the benefits offered Paradise Plant by transporting natural gas for the Plant’s fuel needs.

TVA’s construction activities over the next several years will add funds to the local Muhlenberg County economy and will cause a substantial increase in the value of TVA’s power assets in Kentucky. The Commercial Operations Date of TVA’s new facilities is June 30, 2017. The public benefits of providing new natural gas transportation service for these new facilities will outweigh any residual adverse impacts of the Project. The Commission, therefore, should find that the Western

Kentucky Lateral Project meets the requirements of the Policy Statement and is required by the present and future public convenience and necessity.

16 TVA, “Fact Sheet: Paradise-Gas Addition & Coal Retirements”, available at http://www.tva.gov/news/releases/octdec13/board_files/Fact_Sheet_Paradise_Fossil_11_14_13.pdf. 17 Id. 18 Id. 15 VIII. NOTICE

Pursuant to 18 C.F.R. 157.6 and 157.9 of the Commission’s Regulations, a form of notice of this Application, suitable for publication in the Federal Register, is attached.

IX. OTHER APPLICATIONS, FILINGS AND PROJECTS

On February 6, 2015, in Docket No. RP15-440-000, Texas Gas submitted the

Lateral Rate Schedule Proposal in a separate NGA Section 4 proceeding tariff sheets to implement firm and interruptible lateral transportation services. Texas Gas is not aware of any other application to supplement or effectuate this Application that must or will be filed by Texas Gas, its customers, or any other person with any Federal,

State, or regulatory body in order to complete the Project.

On September 25, 2014 in Docket No. CP14-553-000, Texas Gas filed an application to construct, own, operate, and maintain a new compressor station in

Ouachita Parish, Louisiana; modify existing interconnects; and make certain yard and station piping modifications at various compressor stations, which have traditionally flowed gas south to north in order to provide incremental firm transportation service north to south (“Ohio-Louisiana Access Project”) on the Texas

Gas system. TVA has not contracted for any firm capacity in the Ohio-Louisiana

Access Project.

On November 12, 2014 in Docket No. CP15-14-000, Texas Gas filed an application to construct, operate, and maintain a new approximately 29.9-mile, 20- inch diameter natural gas pipeline lateral and an approximately 0.90-mile, 10-inch

16 diameter pipeline lateral, two meter and regulator stations, and appurtenant auxiliary facilities, extending from Texas Gas’ existing Robards Junction facilities in

Henderson County, Kentucky to interconnections with two industrial facilities located near Mount Vernon, Posey County, Indiana (“Southern Indiana Market

Lateral” or “Project”). TVA has not contracted for any firm capacity in the Southern

Indiana Market Project.

In order to aid the Commission’s review of the Project, Texas Gas has included a discussion of the acreage impacts associated with the Ohio-Louisiana

Access Project and Southern Indiana Market Lateral in Exhibit F-I, Resource Report

1, of this Application. The environmental impacts of these two projects would occur in areas geographically remote from the counties affected by the Project facilities, so that those projects will not create cumulative impacts with the instant Project. Even if some of the impacts are considered cumulative in nature to the Project’s impacts, those impacts would be limited in scope given the minimal amount of construction associated with the Project.

Texas Gas has also conducted a binding open season for a potential Northern

Supply Access Project soliciting support for the construction and modification of aboveground facilities along the Texas Gas mainline to provide additional new capacity for north to south transportation. Texas Gas is proposing to (i) construct, own, operate, and maintain a new mainline compressor station located in Hamilton

County, Ohio (“Harrison Compressor Station”); (ii) install gas cooling facilities at the

Dillsboro Compressor Station in Dearborn County, Indiana; (iii) classify reciprocal compressors No. 2 through No. 5 as operational spares to be used as back-up units and

17 install a new Solar Taurus 70 gas turbine compressor at the Bastrop Compressor Station

in Morehouse Parish, Louisiana; and (iv) make certain yard and station piping

modifications at the existing Jeffersontown, Leesville, Hardinsburg, Slaughters,

Covington, Clarksdale, and Bastrop Compressor Stations, to allow each of the

compressor stations, which have traditionally flowed gas south to north, to efficiently

and reliably flow the proposed quantities north to south while retaining the existing

capability to flow south to north. The extent of the Northern Supply Access Project timing is currently unknown. Although the Northern Supply Access Project would have some overlap with the Ohio-Louisiana Access Project on the mainline capacity, the Northern Supply Access Project would be incremental to the proposed Ohio-

Louisiana Access Project, and the construction schedule and in-service dates would be offset from the proposed Ohio-Louisiana Access Project by more than one year.

TVA has not contracted for any capacity in the Northern Supply Access Project.

Texas Gas also has scheduled the replacement of its Turbine T-1 at the

Columbia Compressor Station for summer 2015. The T-1 is being replaced due to obsolescence of the unit and therefore improves reliability. It is contemplated that

the unit will be replaced with a like or similar unit using the same building and

foundation. The project is still in the engineering design stage and acreage impacts

associated with this project are not known and are not included in Exhibit F-I,

Resource Report 1.

As the potential future projects become more certain, Texas Gas will update

the Project Application to allow for the Commission’s full review of the impacts

known at that time.

18 X. LANDOWNER NOTIFICATION

Pursuant to Section 157.6 and 157.9 of the Commission’s Regulations,19 Texas

Gas will provide a complete copy of this Application to a central public library in the county affected by this proposal within three business days of this Application. Pursuant to 18 C.F.R. § 157.6(d), Texas Gas will make a good faith effort to notify all affected landowners, towns, communities; and local, state and federal governments and agencies involved in the project in accordance with this section.

XI. WAIVER

Pursuant to Rules 801 and 802 of the Commission’s Rules of Practice and

Procedure,20 Texas Gas requests that the intermediate decision procedure be omitted, and waives oral hearing and opportunity for filing exceptions to the decision of the

Commission. Under these procedures, the decision of the Commission will be final, but subject to reconsideration by the Commission upon request for rehearing, as provided by statute.

XII. EXHIBITS

Pursuant to 18 C.F.R 157.14 of the Commission’s Regulations, the following exhibits are attached or omitted for the reasons indicated.

Exhibit A Articles of Incorporation and Bylaws Incorporated by reference in Docket No. CP04-373-000, et al.

Exhibit B State Authorization Incorporated by reference in Docket No. CP04-373-000, et al.

19 18 C.F.R. §§ 157.6 and 157.9. 20 Id. §§ 385.801 and 385.802. 19 Exhibit C Company Officials Submitted herewith.

Exhibit D Subsidiaries and Affiliation Submitted herewith.

Exhibit E Other Pending Applications and Filings Texas Gas submitted in a separate NGA Section 4 proceeding, in Docket No. RP15-440-000, a proposal to implement new firm and interruptible transportation services.

Exhibit F Location of Facilities Submitted herewith.

Exhibit F-I Environmental Report Submitted herewith.

Exhibit G, G-I Flow Diagrams Submitted herewith. Information for Exhibits G, and G-I is included in Volume IV, and labeled as Contains Critical Energy Infrastructure Information – Do Not Release (CEII) as defined in 18 C.F.R. § 388.113(c).

Exhibit G-II Flow Diagram Data Submitted herewith. Information for Exhibits G-II is included in Volume IV, and labeled as Contains Critical Energy Infrastructure Information – Do Not Release (CEII) as defined in 18 C.F.R. § 388.113(c).

Exhibit H Total Gas Supply Data Omitted.

Exhibit I Market Data Submitted herewith. The Precedent Agreement is submitted in Volume III and designated as Privileged Information – Do Not Release as it contains sensitive commercial information.

Exhibit J Federal Authorizations Submitted herewith.

Exhibit K Cost of Facilities Submitted herewith.

20 Exhibit L Financing Omitted. Texas Gas will finance the proposed construction with funds generated internally, through borrowings, bond offerings, and/or equity offerings.

Exhibit M Construction, Operation, and Management Omitted. Texas Gas will construct or cause to be constructed, own, operate, and maintain the proposed facilities.

Exhibit N Revenues—Expenses—Income Submitted herewith.

Exhibit O Depreciation and Depletion Depreciation is reflected in Exhibit N.

Exhibit P Tariff Omitted. Texas Gas submitted, in a separate NGA Section 4 proceeding, in Docket No. RP15-440-000, tariff records to implement these new firm and interruptible lateral transportation services.

XIII. MISCELLANEOUS

Included with this filing is a form of notice suitable for publication in the Federal

Register as required by Section 157.6(b)(7) of the Commission’s Regulations.21 Pursuant

to the Commission’s Filing Guide and Qualified Document List for eFiling, Texas Gas

shall deliver two courtesy hard copies of its Request to the Office of Energy Projects,

Room 62-46 and one copy to OGC-EP Room 101-56, no later than the business day following submittal of the eFiling.

The undersigned has read and knows the contents of this Request and the contents as set forth herein are true to the best knowledge, information, and belief of the undersigned based on representations made by Texas Gas personnel.

21 Id. § 157.6(b)(7). 21

UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION

Texas Gas Transmission, LLC Docket No. CP15-___-000

NOTICE OF APPLICATION

(March____, 2015)

Take notice that on March 4, 2015, Texas Gas Transmission, LLC (“Texas Gas”), 9 Greenway Plaza, Suite 2800, Houston, Texas 77046, filed in Docket No. CP15-___-000, pursuant to section 7(c) of the Natural Gas Act (NGA) this abbreviated application for a certificate of public convenience and necessity.

Texas Gas Crossing proposes to construct, own, operate, and maintain a new natural gas pipeline lateral consisting of approximately 22.5 miles of 24-inch diameter pipe, a meter and regulator station, and appurtenant auxiliary facilities, which will extend from Texas Gas’ existing Midland 3 Compressor Station to an interconnection with the Tennessee Valley Authority’s proposed combined-cycle natural gas-fired power plant located in Muhlenberg County, Kentucky. The Project will provide a design capacity of up to 230,000 million British thermal units per day (“MMbtu/d) of firm natural gas transportation capacity with a fully subscribed Project, as more fully set forth in the application which is on file with the Commission and open to public inspection. The filing may also be viewed on-line at http://www.ferc.gov using the “eLibrary” link. Enter the docket number excluding the last three digits in the docket number field to access the document. For assistance, contact FERC at [email protected] or call toll-free, (866) 208-3676 or for TYY, (202) 502-8659.

Any questions regarding this application may be directed to J. Kyle Stephens, Vice President of Regulatory Affairs, Texas Gas Transmission, LLC, 9 Greenway Plaza, Houston, Texas, 77046; by fax to (713) 479-1846; or by email to [email protected], or to Nell Gutierrez, Director of Regulatory Affairs, Texas Gas Transmission, LLC, 9 Greenway Plaza, Houston, Texas 77046; by fax to (713) 479-1745; or by email to [email protected].

Pursuant to section 157.9 of the Commission's rules, 18 CFR 157.9, within 90 days of this Notice the Commission staff will either: complete its environmental assessment (EA) and place it into the Commission’s public record (eLibrary) for this proceeding; or issue a Notice of Schedule for Environmental Review. If a Notice of Schedule for Environmental Review is issued, it will indicate, among other milestones, the anticipated date for the Commission staff's issuance of the final environmental impact statement (FEIS) or EA for this proposal. The filing of the EA in the Commission’s public record for this proceeding or the issuance of a Notice of Schedule for Environmental Review will serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's FEIS or EA.

There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below 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 NGA (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 7 copies of filings made in the proceeding with the Commission and must mail a copy to the applicant and to every other party. 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 comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.

Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commenters will not be required to serve copies of filed documents on all other parties. However, the non-party commenters will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.

The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at http://www.ferc.gov. Persons unable to file electronically should submit an original and 5 copies of the protest or intervention to the Federal Energy regulatory Commission, 888 First Street, NE, Washington, DC 20426.

Comment Date: 5:00 pm Eastern Time on ______, 2015

Kimberly D. Bose Secretary UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

WESTERN KENTUCKY LATERAL PROJECT

DOCKET NO. CP15- -000

NON-ENVIRONMENTAL

Exhibit C – Company Officials Exhibit D – Subsidiaries and Affiliations Exhibit F – Location of Facilities Exhibit I – Summary Exhibit J – Federal Authorizations Exhibit K – Cost of Facilities Exhibit N – Revenues - Expenses - Income

VOLUME I

PUBLIC INFORMATION

MARCH 2015 TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15-_____-000 EXHIBIT C

COMPANY OFFICIALS

TEXAS GAS TRANSMISSION, LLC OFFICERS

Stanley C. Horton President and Chief Executive Officer Jamie L. Buskill Senior Vice President, Chief Financial & Administrative Officer and Treasurer Michael E. McMahon Senior Vice President, General Counsel and Secretary Steven A. Barkauskas Senior Vice President, Controller and Chief Accounting Officer John L. Haynes Senior Vice President and Chief Commercial Officer Roberta A. Jones Senior Vice President and Chief Information Officer Richard E. Keyser Senior Vice President Operations, Engineering & Construction Kathlyn F. Kirk Senior Vice President Marketing & Origination Richard K. Ashy Vice President Operations Stephen Bienvenu Vice President Staffing & Recruiting Jeffrey Bittel Vice President Power Generation Mercy L. Carrasco Vice President and Assistant General Counsel, Assistant Secretary Kerry J. Comeaux Vice President System Optimization Christine Fernandez Vice President Accounting and Assistant Controller David N. Goodwin Vice President Technical Services Benjamin K. Johnson Vice President Rates & Tariffs James D. Jones Vice President Tax M. Susan LaMar Vice President Treasury Services and Assistant Treasurer Thomas A. Mischel Vice President Operations Control Derryl D. Morgan Vice President Customer Service David W. Moseley Vice President Southern/Midwest Markets E. Adina Owen Assistant Secretary Douglas W. Ray Vice President Marketing & Optimization Alan K. Rodecker Vice President System Optimization Jeffrey R. Roper Assistant Secretary Jeffrey L. Sanderson Vice President Operations Christie M. Simon Vice President Operations Services J. Kyle Stephens Vice President Regulatory Affairs Kimberly Tarr Vice President Engineering Richard E. Whitworth Vice President Business Development Debora H. York Vice President Optimization Randall P. Young Vice President Regulatory Compliance & Corporate Services

TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15-_____-000 EXHIBIT D

SUBSIDIARIES AND AFFILIATION

SUBSIDIARIES AND AFFILIATION

Texas Gas Transmission, LLC is a wholly owned subsidiary of Boardwalk Pipelines, LP which is wholly owned by Boardwalk Pipeline Partners, LP (Boardwalk). Boardwalk is a publicly- traded Delaware master limited partnership formed by a subsidiary of Loews Corporation (Loews) to own and operate the business that was previously conducted by Boardwalk Pipelines, LLC. Boardwalk is traded on the New York Stock Exchange with the symbol “BWP.” Boardwalk GP, LP (Boardwalk GP) is the general partner of Boardwalk. The operations of Boardwalk GP are managed by its general partner Boardwalk GP, LLC (BGL). Loews indirectly owns 100% of the equity interests in Boardwalk GP and BGL. Loews also owns a majority limited partner interest in Boardwalk. Gulf Crossing Pipeline Company LLC and GS Pipeline Company, LLC, the general partner of Gulf South Pipeline Company, LP1, also interstate natural gas pipelines, are also wholly owned subsidiaries of Boardwalk. Other wholly owned subsidiaries of Boardwalk include Boardwalk Storage Company, LLC, and Boardwalk Midstream, LLC.

In addition to Boardwalk, Loews’ principal subsidiaries are:

CNA Financial Corporation - Insurance Diamond Offshore Drilling, Inc. – Offshore Drilling Rigs Loews Hotels Holding Corporation - Hotels

1 By Order issued November 26, 2014, in Docket No. CP14-473, Gulf South was authorized to acquire by inter- corporate merger all of Petal Gas Storage, L.L.C.’s (“Petal”) storage and pipeline facilities. On January 8, 2015, Gulf South notified the Commission that as of January 1, 2015, Gulf South acquired and consolidated operations of Petal and completed the merger and abandonment of the capacity leases. TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15-_____-000 EXHIBIT F

LOCATION OF FACILITIES

M C LL EEAA N

O H IIO

H O PPKKII N SS

Central City

M U H LLEE N BBEER G

Greenville

MAP ITEMS

B U T L E R TVA METER STATION B U T L E R TEXAS GAS TRANSMISSION LLC TEXAS GAS TRANSMISSION PIPELCINHER II SSTTII AAN WESTERN KENTUCKY LATERAL PROJECT WESTERN KENTUCKY EXHIBIT F LOCATION OF FACILITIES LATERAL TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15-_____-000 EXHIBIT I

MARKET DATA

CONTAINS PRIVILEGED INFORMATION

SEE VOLUME III TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15-_____-000 EXHIBIT J

FEDERAL AUTHORIZATIONS

Table 1.6-1 Federal and State Permits and Approvals Submitted/Anticipated Receipt/Anticipated Agency or Organization Permit/Approval Submittal Receipt Federal

Federal Energy Regulatory Certificate of Public March 4, 2015 Dec 5, 2015 Commission Convenience and Necessity

U.S. Fish and Wildlife Endangered Species Act, Ongoing Consultation- Service, Kentucky and Section 7; June 13, 2014 September 2015 Bloomington Ecological Migratory Bird Treaty Act June 23, 2014 Services Field Offices Consultation Nov 18, 2014

Section10 /Section 404 US Army Corps of Engineers, Wetlands and Waterbody March 4, 2015 Nov 23, 2015 Louisville District Nationwide Permit 12

State of Kentucky

NPDES Stormwater EPA Exemption Recognized in N/A Construction General Permit Kentucky

Temporary Authorization for July 2016 Aug 2016 water withdrawal Permit Kentucky Department for Environmental Protection Section 401 Individual Water Quality Certification/Permit to Division of Water March 4, 2015 Nov 23, 2015 Construct Across or Along a Stream (Individual)

NPDES General Permit for Discharge of Hydrostatic Test July 2016 Aug 2016 Water Ongoing Consultation- Kentucky Department of State Listed Threatened and July 7, 2014 Fisheries and Wildlife Endangered Species June 23, 2014 Nov 20, 2014 Resources Consultation/Clearance Nov 18, 2014

Section 106 of the National Kentucky Heritage Council Historic Preservation Act February 2015 September 2015 Consultation/Clearance

Tribes State of Kentucky

Absentee Shawnee Tribe of Tribal Consultation February 2015 September 2015 Indians of Oklahoma

Cherokee Nation Tribal Consultation February 2015 September 2015 Table 1.6-1 Federal and State Permits and Approvals Submitted/Anticipated Receipt/Anticipated Agency or Organization Permit/Approval Submittal Receipt

Chickasaw Nation Tribal Consultation February 2015 September 2015

Eastern Band of Cherokee Tribal Consultation February 2015 September 2015 Indians

Eastern Shawnee Tribe of Tribal Consultation February 2015 September 2015 Oklahoma

Miami Tribe of Oklahoma Tribal Consultation February 2015 September 2015

Peoria Tribe of Indians of Tribal Consultation February 2015 September 2015 Oklahoma

The Shawnee Tribe Tribal Consultation February 2015 September 2015

United Keetoowah Band of Tribal Consultation February 2015 September 2015 Cherokee Indians

TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15-_____-000 EXHIBIT K

COST OF FACILITIES TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15- -000 EXHIBIT K

Western Kentucky Lateral Project

($ in thousands)

Western 16-inch 10-inch Kentucky Market Check Delivery Lateral Meter Meter Total

RIGHT OF WAY $4,282 $0 $15 $4,297

MATERIALS $8,524 $958 $2,525 $12,006

CONSTRUCTION $42,911 $1,090 $2,678 $46,679

ENGINEERING $3,665 $450 $250 $4,365

ENVIRONMENTAL $528 $5 $5 $539

OVERHEAD $1,042 $100 $70 $1,212

AFUDC $4,306 $184 $392 $4,881

CONTINGENCY $6,206 $260 $554 $7,021

TOTAL $71,464 $3,047 $6,489 $81,000 TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15-_____-000 EXHIBIT N

REVENUES – EXPENSES - INCOME

TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15- -000 EXHIBIT N

TEXAS GAS TRANSMISSION, LLC WESTERN KENTUCKY LATERAL

EXHIBIT N

The incremental cost of service for the Western Kentucky Lateral has been calculated based on the total estimated capital costs for the new facilities as per Exhibit K. The billing determinants used to derive the associated rates are reflective of the maximum incremental capacity of the proposed facilities (230,000 MMBtu per day).

Additionally, the incremental cost of service has been calculated using Texas Gas Transmission's estimates for operation and maintenance expenses, ad valorem taxes, a depreciation rate of 2.86% (35 year life) and overall return of 9.88% based on Texas Gas Transmission's actual capital structure in its most recent FERC Form 2 report.

As shown on Page 1, the calculated cost-based transportation rates for this project are greater than Texas Gas' existing approved maximum transportation rates for service under Rate Schedule FTS for deliveries from Zone 3 to Zone 3. TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15- -000 EXHIBIT N PAGE 1 OF 9

TEXAS GAS TRANSMISSION, LLC WESTERN KENTUCKY LATERAL

Line No. Incremental Cost of Service / Rate Calculation

1 Western Kentucky Lateral - Incremental Cost of Service (See Page 2) $14,780,145

2 Maximum Incremental Design Capacity 230,000 MMBtu/d

3 Annual Incremental Throughput at Full Capacity 83,950,000 MMBtu

4 Calculated Daily FTS Demand Rate (per MMBtu) $ 0.1761

Currently Approved FTS Rates For Flows from Zone 3 to Zone 3 (Intra Zone)

5 Daily FTS Demand Rate (per MMBtu) Zone 3 to Zone 3 (Intra-Zone) Recourse FT rate $ 0.1181

Net Difference Incremental Rate - Currently Approved FTS Rate

7 Difference in Daily FTS Demand Rate (per MMBtu) $ 0.0580 TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15- -000 EXHIBIT N PAGE 2 OF 9

TEXAS GAS TRANSMISSION, LLC WESTERN KENTUCKY LATERAL

Line No. Incremental Cost of Service Year 1 Year 2 Year 3

1 Operation and Maintenance Expenses 254,000 262,000 269,000 2 Depreciation Expense 2,316,600 2,316,600 2,316,600 3 Other Taxes 506,000 768,000 753,000 4 Income Taxes 3,848,987 3,672,406 3,469,211 5 Return 7,854,558 7,489,693 7,069,837

6 Total Incremental Cost of Service $14,780,145 $14,508,698 $13,877,648 TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15- -000 EXHIBIT N PAGE 3 OF 9

WESTERN KENTUCKY LATERAL RATE BASE - WESTERN KENTUCKY LATERAL

Line No. Incremental Rate Base Year 1 Year 2 Year 3

1 Gas Plant In Service (See Exhibit K) $81,000,000 $81,000,000 $81,000,000 2 Accumulated Depreciation /1 (1,158,300) ($3,474,900) ($5,791,500)

3 Net Plant In Service 79,841,700 77,525,100 75,208,500

4 Accumulated Deferred Taxes /1 (335,545) (1,712,219) (3,645,520)

5 Total Rate Base $79,506,155 $75,812,881 $71,562,980

6 Overall Rate of Return (See below) 9.88% 9.88% 9.88%

7 Total Return $7,854,558 $7,489,693 $7,069,837

Capitalization Cost of Weighted Capital Structure Percent /2 Capital Cost of Capital

8 Long Term Debt 45.94% 5.03% 2.31%

9 Common Equity 54.06% 14.00% 7.57%

10 Total 100.00% 9.88%

Notes: /1 Amount is an average of beginning and ending balances. /2 Reflects actual capitalization reported in Texas Gas Transmission's most recent FERC Form 2. TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15- -000 EXHIBIT N PAGE 4 OF 9

WESTERN KENTUCKY LATERAL CALCULATION OF COST OF SERVICE ITEMS - WESTERN KENTUCKY LATERAL

Line No. O&M Expenses Year 1 Year 2 Year 3

1 Transmission $254,000 $262,000 $269,000

2 Total O&M Expenses $254,000 $262,000 $269,000

Depreciation Expense

3 Gas Plant In Service $81,000,000 $81,000,000 $81,000,000

4 Depreciation Rate 2.86% 2.86% 2.86%

5 Depreciation Expense $2,316,600 $2,316,600 $2,316,600

Other Taxes

6 Ad Valorem Taxes $506,000 $768,000 $753,000

7 Total Other Taxes $506,000 $768,000 $753,000 TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15- -000 EXHIBIT N PAGE 5 OF 9

TEXAS GAS TRANSMISSION, LLC WESTERN KENTUCKY LATERAL

Line No. Income Taxes Rate Year 1 Year 2 Year 3

1 Rate Base $79,506,155 $75,812,881 $71,562,980 2 Total Overall Return 9.88% 7,854,558 7,489,693 7,069,837 ADD: 3 Amortization of AFUDC equity 75,466 75,466 75,466

LESS: 4 Interest and debt expense 5.03% (1,837,214) (1,751,870) (1,653,664)

5 Adjusted Return 6,092,810 5,813,288 5,491,638

6 Income Taxes (at Composite Tax Rate) 38.7152% 3,848,987 3,672,406 3,469,211 TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15- -000 EXHIBIT N PAGE 6 OF 9

WESTERN KENTUCKY LATERAL CALCULATION OF DEFERRED INCOME TAXES - WESTERN KENTUCKY LATERAL

Line No. Deferred Income Taxes Year 1 Year 2 Year 3

1 Gas Plant In Service $81,000,000 $81,000,000 $81,000,000 2 Book Depreciation Rate 2.86% 2.86% 2.86% 3 Book Depreciation Expense $2,316,600 $2,316,600 $2,316,600

4 Tax Depreciation Rate 5.00% 9.50% 8.55% 5 Tax Depreciation $4,050,000 $7,695,000 $6,925,500

6 Difference ($1,733,400) ($5,378,400) ($4,608,900) 7 Composite Income tax rate 38.7152% 38.7152% 38.7152%

8 Deferred Taxes ($671,089) ($2,082,259) ($1,784,345) 9 Accumulated Deferred Income Taxes ($671,089) ($2,753,348) ($4,537,693) TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15- -000 EXHIBIT N PAGE 7 OF 9

WESTERN KENTUCKY LATERAL INCREMENTAL RATE - WESTERN KENTUCKY LATERAL

Line No. Total

1 Total Incremental Cost of Service $14,780,145

2 Total Incremental Capacity /1 230,000 MMBtu/d

3 Annual Throughput /2 83,950,000 MMBtu

5 Daily Demand Rate (Incremental) $ 0.1761 per MMBtu

Notes: /1 Reflects the maximum capacity of the Western Kentucky Lateral. /2 At maximum capacity. TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15- -000 EXHIBIT N PAGE 8 OF 9

WESTERN KENTUCKY LATERAL INCREMENTAL REVENUES - WESTERN KENTUCKY LATERAL

<< Negotiated Revenues >> Primary Primary Daily Demand Commodity Daily Demand Line MDQ Primary Term Receipt Delivery Rate / MMBtu Rate Rate . MMBtu Commodity Rate No. Shipper Service Type (MMBtu/day) (Yrs) Zone(s) Zone(s) (Negotiated) (Negotiated) (Recourse) (Recourse) Year 1 Year 2 Year 3

1 Shipper A FTS 230,000 20$ 0.1305 $ 0.0312 $ 0.1181 0.0312$ 13,574,715 $ 13,574,715 $ 13,574,715

2 Total Incremental Revenues $ 13,574,715 $ 13,574,715 $ 13,574,715 TEXAS GAS TRANSMISSION, LLC DOCKET NO. CP15- -000 EXHIBIT N PAGE 9 OF 9

WESTERN KENTUCKY LATERAL INCREMENTAL REVENUES AND INCOME - WESTERN KENTUCKY LATERAL

Line No. Year 1 Year 2 Year 3

1 Transportation Revenues$ 13,574,715 $ 13,574,715 $ 13,574,715

Operating Expenses: 2 O&M Expenses $ 254,000 $ 262,000 $ 269,000 3 Ad Valorem Taxes $ 506,000 $ 768,000 $ 753,000 4 Depreciation $ 2,316,600 $ 2,316,600 $ 2,316,600

5 Total Operating Expenses$ 3,076,600 $ 3,346,600 $ 3,338,600

6 Net Income Before Tax$ 10,498,115 $ 10,228,115 $ 10,236,115 7 Income Taxes 38.7152%$ 4,064,367 $ 3,959,836 $ 3,962,933

8 Net Operating Income $ 6,433,748 $ 6,268,279 $ 6,273,182