Petal-III-FERC-Application.Pdf

October 9, 2018

Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, N.E. Washington, DC 20426

Re: Gulf South Pipeline Company, LP Abbreviated Application for a Certificate of Public Convenience and Necessity Petal III Compression Project Docket No. CP19-___-000

Dear Ms. Bose:

Gulf South Pipeline Company, LP (“Gulf South”) hereby submits for filing with the Federal Energy Regulatory Commission (“Commission”) an Abbreviated Application for a Certificate of Public Convenience and Necessity (“Application”), pursuant to Sections 7(c) of the Natural Gas Act, as amended, and Part 157.7 of the Commission’s rules and regulations. The Application requests the Commission’s authorization for Gulf South to construct, operate, and maintain two new electric-driven 5,000 horsepower compressor units, within the existing Petal III Compressor Station (“Petal III CS”) building, and a dehydration unit, thermal oxidizer, and other auxiliary, appurtenant facilities which will be all located adjacent to the Petal III CS in Forrest County, Mississippi (“Petal III Compression Project”). The proposed Petal III Compression Project will allow Gulf South to (i) increase the injection capability to 1,738 million standard cubic feet per day (“MMscf/d”); and (ii) restate the withdrawal deliverability to 2,495 MMscf/d.

Pursuant to 18 C.F.R. §388.112 of the Commission's regulations, this Application consists of three volumes:

Volume I - Public: Public information, including the Application and Exhibits, except for Exhibit F-1, Environmental Report and those items designated as Privileged Information or CEII;

Volume I-A – Public: Public information, Exhibit F-1, Environmental Report Resource Reports 1 - 12, except for those items designated as Privileged Information or CEII;

VOLUME II: PRIVILEGED Privileged information marked and labeled "CUI//PRIV” and “CONTAINS PRIVILEGED INFORMATION - DO NOT RELEASE" and includes Exhibit F-I privileged information which includes culturally sensitive resources information; and

Gulf South Pipeline Company, LP 9 Greenway Plaza, Ste. 2800 Houston, TX 77046 Tel. 713.479.8000 www.gulfsouthpl.com

UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

) Gulf South Pipeline Company, LP ) CP19-___-000 )

ABBREVIATED APPLICATION OF GULF SOUTH PIPELINE COMPANY, LP FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO CONSTRUCT AND OPERATE PIPELINE FACILITIES

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

157, of the regulations of the Federal Energy Regulatory Commission (“Commission” or

“FERC”), 18 C.F.R. Part 157, Gulf South Pipeline Company, LP (“Gulf South”) submits this abbreviated application for a certificate of public convenience and necessity (“Application”) seeking authority for Gulf South to construct, operate, and maintain two new electric-driven 5,000 horsepower (“HP”) compressor units, within the existing Petal III Compressor Station (“Petal III

Station”) building, and a dehydration unit, thermal oxidizer, and other auxiliary, appurtenant facilities which will be all located adjacent to the Petal III Station in Forrest County, Mississippi

(“Petal III Compression Project” or “Project”), as more fully described in this Application.

Gulf South is seeking authorization to construct the Project in order to (i) increase the injection capability to 1,738 million standard cubic feet per day (“MMscf/d”); and (ii) restate the withdrawal capability to 2,495 MMscf/d based on the operational limitations of the existing and new dehydration units. Gulf South is proposing to add these facilities to enhance operational flexibility, continue to provide reliable natural gas storage service, and potentially increase the number of injection and withdrawal cycles to satisfy the needs of new customers desiring service from the Petal Complex facilities.

Subject to receiving all required authorizations and approvals, Gulf South proposes to begin construction of the Project by the third quarter of 2019 and place the Project in-service by

June 2020. Based on this timing, Gulf South respectfully requests that the Commission complete its review of the Application and grant the requested authorizations in this Application on or before

June 20, 2019. Gulf South will devote the resources necessary to respond promptly to any requests for additional data or information in order to permit the Commission to develop the record it needs to fulfill its statutory obligations. Receipt of an order by June 20, 2019, will allow Gulf South to meet the requirements of its customers in this area.

In support of this abbreviated Application, Gulf South submits the following:

I. APPLICANT

The exact name of Gulf South is Gulf South Pipeline Company, LP, and its principal place of business is 9 Greenway Plaza, Suite 2800, Houston, Texas 77046. Gulf South is a wholly owned subsidiary of Boardwalk Pipelines, LP (“Boardwalk Pipelines”). Gulf South is a limited partnership organized and existing under the laws of the state of Delaware and is duly authorized to do business in the states of Texas, Louisiana, Mississippi, Alabama, and Florida.

Gulf South is a natural gas company within the meaning of the NGA. It currently owns and operates approximately 7,200 miles of pipeline facilities extending from south and east Texas through Louisiana, Mississippi, southern Alabama, and western Florida. Gulf South has numerous interconnects with other interstate and intrastate pipelines and storage facilities, which allow it to serve various on-system and off-system markets. Gulf South is an open-access pipeline company that provides transportation and storage services pursuant to Part 284 of the Commission’s regulations.

The names, titles, and mailing addresses of the persons to whom communications and correspondence regarding this filing should be addressed are:

Michael E. McMahon A. Gregory Junge Senior Vice President and General Counsel Michael R. Pincus J. Kyle Stephens Van Ness Feldman, LLP Vice President, Regulatory Affairs 1050 Thomas Jefferson St., NW Juan Eligio Jr. Seventh Floor Supervisor, Regulatory Affairs Washington, D. C. 20007 Payton Barrientos Phone: (202) 298-1800 Senior Regulatory Analyst Fax: (202) 338-2361 Gulf South Pipeline Company, LP Washington, D. C. 20007 9 Greenway Plaza, Suite 2800 [email protected] Houston, Texas 77046 [email protected] Phone: (713) 479-3480 Fax: (713) 479-1818 [email protected] [email protected] [email protected] [email protected]

Each of these persons is designated to receive service in accordance with 18 C.F.R.

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

II. BACKGROUND

The Petal Gas Storage facilities are located on the “Petal Salt Dome” in Forrest County,

Mississippi. The Petal Gas Storage consists of eight caverns (Cavern Nos. 1, 3, 3-A, 6, 7, 8, 10, and 12A), including the former Hattiesburg Industrial Gas Sales, L.L.C. (“Hattiesburg”) facilities1, with a certificated total storage capacity of 46.008 billion cubic feet (“Bcf”) and a working gas

1 Petal Gas Storage, LLC acquires through merger Hattiesburg Industrial Gas Sales, LLC, 142 ¶ FERC 61,119 (2013).

capacity of 29.629 Bcf (“Petal Complex”). The Petal Complex includes four compressor stations providing 59,640 HP of compression (Petal 1 – 10,400 HP; Petal II – 25,000 HP, Petal III – 15,000

HP; Hattiesburg – 9,240 HP).2

By Order issued June 1, 2007, in Docket No. CP07-81-000,3 Gulf South’s predecessor

Petal Gas Storage, L.L.C. (“Petal”) was authorized to construct and operate the Petal III Station and placed it in-service on December 7, 2009. While the Petal III Station was under construction,

Petal filed an application and received authorization in Docket No. CP08-66-000,4 to expand its

Petal III Station by adding three additional compression units totaling 15,000 HP and construct

Cavern Nos. 1 and 2. The Petal III Station building was constructed with space for six compressor units; however, Petal elected not to pursue construction of the requested expansion facilities in

Docket CP08-66-000 leaving space available for the three additional compressor units.5 In Docket

CP14-473-000, the Commission authorized Gulf South to acquire by inter-corporate merger the

Petal Complex.6

Over time Gulf South has gained operational experience and knowledge associated with operating the Petal Complex. Some customers utilizing the Petal Complex has turned its storage

2 See Petal Gas Storage Co., 64 FERC ¶ 61,190 (1993); Petal Gas Storage Co., 86 FERC ¶ 61,224 (1999), modified by, 96 FERC ¶ 61,177 (2001); Petal Gas Storage, L.L.C., 90 FERC ¶ 61,243 (2000), modified by, 96 FERC ¶ 61,177 (2001); Petal Gas Storage, L.L.C., 92 FERC ¶ 61,220 (2000); Petal Gas Storage, L.L.C., 97 FERC ¶ 61,097 (2001), amended by, 100 FERC ¶ 61,100 (2002); Petal Gas Storage, L.L.C., 102 FERC ¶ 61,243 (2003); Petal Gas Storage, L.L.C., 110 FERC ¶ 61,260 (2005); Petal Gas Storage, L.L.C., 118 FERC ¶ 61,253, reh’g granted in part and denied in part, 120 FERC ¶ 61,226 (2007); Petal Gas Storage, L.L.C., 119 FERC ¶ 61,227 (2007); Petal Gas Storage, L.L.C., 121 FERC ¶ 62,186 (2007). Effective December 9, 2008, Petal increased Cavern No. 8 capacity pursuant to Petal’s prior notice in Docket No. CP08-481-000 and its blanket certificate issued in Docket No. CP95-14-000; Petal Gas Storage, L.L.C., 132 FERC ¶ 61,168 (2010), reh’g granted, 133 FERC ¶ 61,148 (2010). Effective December 17, 2013, Petal increased Cavern 12A capacity pursuant to Petal’s prior notice in Docket No. CP14-3-000 and its blanket certificate issued in Docket No. CP95-14-000. Effective June 16, 2015, Petal increased Cavern 12A capacity pursuant to Petal’s prior notice in Docket No. CP15-152-000 and its blanket certificate issued in Docket No. CP82-430-000. 3 Petal Gas Storage, L.L.C., 119 FERC ¶ 61,227 (2007). 4 Petal Gas Storage, L.L.C., 124 FERC ¶ 61,006 (2008). 5 On July 14, 2011, the Commission granted Petal’s second request for extension of time to construct the facilities and make them available for service until July 18, 2013. Petal elected not to construct the facilities and they are not part of the Petal Complex facilities. 6 Gulf South Pipeline Company, LP and Petal Gas Storage, L.L.C., 149 FERC ¶ 61,174 (2014).

capacity over to a third party via an Asset Management Agreement. Asset Managers use the capacity in ways which vary from traditional injection and withdrawal cycles and illustrate a need to provide additional capability for the marketplace. The Gulf Coast marketplace is evolving to place more value on facilities and services which enable more injection and withdrawal cycles per year. Over the next 15 years power plant demand is expected to grow by 7.1 Bcf/d and LNG export demand is forecasted to grow by 14 Bcf/d.7 Gulf South is proposing to make the following modifications to its Injection and Withdrawal Capability:

Injection Capability

Gulf South proposes to add two additional compressor units at the Petal III Station to enhance operational flexibility, continue to provide reliable natural gas storage service, and potentially increase the number of injection and withdrawal cycles to satisfy the needs of new customers desiring service from the Petal Complex facilities. Gulf South’s current certificated injection capability is 1,488 MMscf/d, which is limited by the current compression at the Petal

Complex. With the addition of the two new compressor units proposed in the Application, Gulf

South proposes to increase the certificated injection capability to 1,738 MMscf/d (see Table A).

Table A – Compression Injection Capability Current Injection Capability Proposed Injection Capability (MMscf/d) (MMscf/d) Petal 1,138 1,388 Hattiesburg 350 350 Total 1,488 1,738

7 FERC website at www.ferc.gov/industries/gas/indus-act/lng.asp; Wood Mackenzie North American Natural Gas Long-Term View (Spring, 2018); Velocity Suite – February 2018.

Withdrawal Capability

The current certificated withdrawal capability of the Petal Complex is 3,430 MMscf/d, which is based on the aggregate of each of the individual cavern withdrawal capabilities.8 The existing dehydration units currently provides a withdrawal capability of 1,945 MMscf/d. With the addition of the new dehydration unit, the withdrawal capability will increase for a total withdrawal capability of 2,495 MMscf/d.

Gulf South proposes to restate the certificated withdrawal capability to i) recognize that the current withdrawal capability reflects the aggregate of the cavern withdrawal capabilities and not that of the above ground facilities, and ii) the addition of new dehydration capability and the resulting operational limitations of the above ground facilities at the Petal Complex. Specifically,

Gulf South wants to shift the upper limit of withdrawal capability from being defined by the aggregate of the caverns to being defined by the capability of the above ground facilities. Gulf

South requests the Commission restate the certificated withdrawal capacity on the Petal Complex to 2,495 MMscf/d (see Table B).

Table B – Withdrawal Capability Current Cavern Daily Current Effective Daily Proposed Effective Maximum Capability Maximum Capability Daily Maximum (MMcf/d) (MMcf/d) Capability (MMcf/d) Petal 2,665 1,600 2,150 Hattiesburg 765 345 345 Total 3,430 1,945 2,495

Over the next fifteen years, the marketplace will value the enhanced injection and withdrawal rights. The enhanced injection and withdrawal capabilities will improve operational flexibility, continue to provide reliable natural gas storage service, and potentially increase the

8 See Exhibit G filed in Volume II of Petal’s application to acquire Hattiesburg filed with the Commission on May 21, 2012.

number of injection and withdrawal cycles to satisfy the needs of new customers desiring service from the Petal Complex facilities. These injection and withdrawal enhancements are precisely those needed to attract electric generator and LNG customers.

III. AUTHORIZATION REQUESTED AND DESCRIPTION OF FACILITIES

Gulf South is seeking authorization to construct, operate, and maintain the Petal III

Compression Project consisting of two new electric-driven 5,000 HP compressor units with discharge gas coolers, a new dehydration unit, and other auxiliary, appurtenant facilities. In addition, the Project also includes the installation of a new thermal oxidizer for both the new and existing dehydration units. All Project activities will be located within the Petal Complex in

Forrest County, Mississippi. A detailed project location map is provided in Exhibit F. A detailed description of the proposed facilities to be constructed is provided in the attached Environment

Resource Report included in Exhibit F-I, Volume I-A.

The primary purpose of the proposed Project is to (i) increase the injection capability from

1,488 MMscf/d to 1,738 MMscf/d, which will be limited by the compression; and (ii) restate the withdrawal capability from 3,430 MMscf/d to 2,495 MMscf/d based on the operational limitations of the new dehydration unit for the Petal Complex, including Petal and Hattiesburg, see Table A and Table B above. The existing Petal Complex certificated withdrawal capability of 3,430

MMscf/d is based on the aggregate of each of the maximum below ground Cavern well head deliverability. Gulf South wants to restate the withdrawal deliverability in order to reflect the actual capabilities of the downstream facilities. Today, the existing withdrawal capability for the

Petal Complex is 1,945 MMscf/d. With this Application, Gulf South is now requesting the

certificated withdrawal deliverability increase to 2,495 MMscf/d, which is limited by the existing and new above ground facilities units.

The flow diagrams and data that demonstrate the effect of the proposed facilities on the existing operational capabilities and conditions are included in Exhibits G and G-I. These Exhibits are provided in Volume III, of this Application and filed under a request for treatment as Critical

Energy Infrastructure Information under 18 C.F.R. § 388.112 (2018) and marked “CUI/CEII” and

“Contains Critical Energy Infrastructure Information - Do Not Release”. Gulf South is omitting the Exhibit G-II since the pipeline flow model is not necessary due to incremental facilities being solely horsepower and dehydration.

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.

Gulf South is not requesting authorization to modify the total inventory, cavern pressures, cavern or buffer boundaries, or certificated total, base, or working gas capacities for the Petal

Complex. The individual storage caverns are not being affected or modified. Gulf South currently operates the Petal Complex in such a way that no one customer has rights to an individual cavern.

All service agreements are written on an aggregate basis allowing for the ability to use all of the caverns. There will be no impacts to existing customers and Gulf South will be able to continue to meet all its firm obligations. Gulf South is proposing to only change the injection and withdrawal capabilities of the entire Petal Complex in order to increase operational flexibility, continue to provide reliable natural gas storage service, and potentially increase the number of injection and withdrawal cycles to satisfy the needs of new customers desiring service from the

Petal Complex facilities.

IV. REAFFIRMATION OF MARKET BASED RATES

Gulf South is not proposing any changes to the currently-effective rates established. Gulf

South requests that the Commission approve that Gulf South may continue to provide firm and interruptible storage services at market-based rates. In Docket No. CP14-473-000, et al., the

Commission granted Gulf South’s request to continue to charge market-based rates for its storage services.9

Consistent with its previously submitted market power analyses, Boardwalk Pipelines, continues to define its relevant geographic market area to reflect what is referred to as the Gulf

Coast Production Area. The Gulf Coast Production Area includes the states of Louisiana and

Mississippi, as well as the two neighboring states of Alabama and the eastern portion of Texas.

The Commission has accepted this geographic market definition (i.e. the Gulf Coast Production

Area) in numerous market-based storage orders.10 This area now includes 62 underground natural gas storage facilities, including the Gulf South, Petal, and other Boardwalk Pipelines storage facilities. Also consistent with its most recent market power analysis, Boardwalk Pipelines has continued to define its relevant product market to include all natural gas storage facilities (both interstate and intrastate) in the Gulf Coast Production Area.

An updated market power study is attached hereto as Exhibit I. As shown in Exhibit I, the calculated HHI’s for the relevant market prior to the modifications are 1,137 for working gas and

9 Gulf South Pipeline Company, LP, 149 FERC ¶ 61,174 (2014). 10 See, e.g., Gulf South Pipeline Co., LP, 149 FERC ¶ 61,174 (2014); D'lo Gas Storage, LLC, 140 FERC ¶ 61,182 (2012) Sawgrass Storage, LLC, 138 FERC ¶ 61,180 (2012); Golden Triangle Storage, Inc., 138 FERC ¶ 61,036 (2012); Cadeville Gas Storage, LLC, 132 FERC ¶ 61,115 (2010); BCR Holdings, Inc., 132 FERC ¶ 61,085 (2010); Atmos Pipeline and Storage, LLC, 127 FERC ¶ 61,260 (2009); Liberty Gas Storage, L.L.C., 127 FERC ¶ 61,221 (2009) (“Liberty”); Southeast Gas Storage, LLC, 125 FERC ¶ 61,307 (2008); Leaf River Energy Center, LLC, 125 FERC ¶ 61,131 (2008); Bay Gas Storage Co., Docket Nos. PR08-7-000 and PR08-7-001 (2008); PetroLogistics Natural Gas Storage, LLC, 122 FERC ¶ 61,193 (2008); and Monroe Gas Storage Co., 121 FERC ¶ 61,285 (2007).

802 for daily deliverability, which demonstrate that Boardwalk Pipelines currently lacks the ability to exercise market power at its storage facilities acting together with other storage providers. These

HHI’s are significantly below the 1,800 level that the Commission has determined would warrant additional scrutiny. The analysis indicates that Boardwalk Pipelines currently possesses a 10.03 percent market share for working gas capacity and an 11.43 percent market share for daily deliverability. Gulf South is also including as part of Exhibit I, a projected market study to calculate the HHI impacts after the proposed facilities are placed into service. The resulting working gas and deliverability HHI’s of 1,137 and 791, respectively, are still below the 1,800 level that the Commission has determined would warrant additional scrutiny. Given the calculated HHI results and the other mitigating factors, these market shares indicate that Boardwalk Pipelines lacks the ability to exercise market power at its storage facilities acting alone and will continue to lack that ability after the proposed facilities are constructed and placed into service. The analysis also demonstrates that there is substantial ease of entry into the Gulf Coast Production Area that can help mitigate any remaining possible market power concerns. The proposed Project should not adversely affect Boardwalk Pipeline’s authorization to charge market-based rates at its various storage facilities pursuant to the Commission’s Alternative Rate Policy Statement.

Gulf South also requests waiver of 18 C.F.R. §§ 157.14(a)(14), 157.14(a)(15),

157.14(a)(17), and 157.14(a)(18), of the Commission’s regulations requiring the submission of cost data. No detailed cost data or revenue projections, accordingly, have been submitted with this application. Therefore, Exhibits K, L, N, and O have been omitted.

V. ENVIRONMENTAL MATTERS

Environmental Impacts

Gulf South has designed the Project to minimize 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, and affected landowners. Gulf

South has developed the proposed facilities in a manner that avoids or minimizes adverse 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 (“Plan”) and Wetland and Waterbody Construction and

Mitigation Procedures (“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 Act are included in the attached Environmental Report. Gulf South has engaged in consultations and coordination with the affected federal, state, and local government agencies concerning the proposed construction activities associated with the Project, and will continue to discuss specific concerns or requirements should they be raised.

The Project facilities will be located within the Petal Complex on land solely owned by

Gulf South and adjacent to the existing Petal III Station building. Construction of the proposed

Project will require the use of a total of 18.76 acres of land, resulting in both temporary and permanent impacts, all within the limits of the existing Petal Complex. The two new electric compressor units will be installed within the existing compressor building at the Petal III Station.

Gulf South will utilize the entirety of the existing Petal III Station, as well as a small area to the southwest of the facility, totaling 6.63 acres, as temporary workspace for the installation of the new compressor units, dehydration unit, and associated piping modifications. The new dehydration unit and permanent workspace associated with the new staging yard will require permanent impacts of 5.45 acres. Following the completion of Project activities, the storage yard will be reseeded and permanently maintained for future use within the Petal Complex. The contractor yard is located near Gulf South’s Petal Complex office building in an existing gravel area totaling 1.63 acres. All impacts associated with the contractor yard will be temporary. Gulf

South has identified three temporary access roads that will be used for the Project, totaling 5.05 acres.

Gulf South conducted detailed analyses to determine the potential impacts the Project would have on air and noise quality in the Project area. To minimize and mitigate the impacts identified in the analyses, Gulf South would implement measures designed to reduce air and noise emissions during construction and operation of the Project facilities. All measures would be implemented in accordance with all applicable federal, state, and local regulations. A Project

Vicinity Map of the compressor station and aerial photographs are included in Appendix 1A, in

Resource Report 1. The compressor station plot plan is provided in Appendix 1B, Resource Report

1. Due to the engineering specifics and building identification, the site plot plan has been designated and labeled as “CUI//CEII” and “Contains Critical Energy Infrastructure

Information-Do Not Release” and included in Volume III of this Application. In accordance with Section 388.112 of the Commission’s regulations, 18 C.F.R. § 388.112, Gulf South is seeking confidential treatment of this information.

VI. PUBLIC CONVENIENCE AND NECESSITY

A. Petal III Compression Project

The Project satisfies the criteria for justifying a new project under the Commission’s

Certification of New Interstate Natural Gas Pipeline Facilities Policy Statement (“Certificate

Policy Statement”).11 The Project will provide the following public benefits: provide operational flexibility, continue to provide reliable natural gas storage service, and potentially increase the number of injection and withdrawal cycles to satisfy the needs of new customers desiring service from the Petal Complex facilities. The Project satisfies the requirements of the Certificate Policy

Statement.

B. Compliance with the Commission’s Certificate Policy Statement

The Commission’s Certificate Policy Statement provides guidance regarding how the

Commission will evaluate pipeline construction proposals under Section 7(c) of the NGA to determine if the requested construction is necessary and will serve the public interest. In deciding whether to authorize the construction of major new pipeline facilities, the Commission will balance the public benefits created by the proposed project against potential adverse consequences. The

Commission will give appropriate consideration to the enhancement of competitive transportation alternatives, the possibility of overbuilding, 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 pipeline construction.

11 Certification of New Interstate Natural Gas Pipeline Facilities, Statement of Policy, 88 FERC ¶ 61,227, at p. 61,748 (1999), Order Clarifying Statement of Policy, 90 FERC ¶ 61,128 (2000), Order Further Clarifying Statement of Policy, 92 FERC ¶ 61,094 (2000).

Pursuant to the Certificate Policy Statement, the threshold requirement for a pipeline proposing a new project is that the pipeline must be prepared to financially support the project without relying on subsidization from its existing customers. Once the no-subsidization requirement has been demonstrated, the next inquiry is whether the Applicant has made efforts to eliminate or minimize any adverse effect the project might have on (i) the Applicant’s existing customers, (ii) existing pipelines in the market and their captive customers, or (iii) landowners and communities affected by the route of the new pipeline. If residual adverse effects on these interest groups are identified after efforts have been made to minimize them, the Commission will evaluate the project by balancing the evidence of public benefits to be achieved against these residual adverse effects. The Commission has stated that this essentially is an economic test.12 Only when the benefits outweigh the adverse effects on economic interests will the Commission proceed to complete the environmental analysis where other interests are considered. Gulf South’s proposed

Petal III Compression Project satisfies all of the requirements of the Certificate Policy Statement.

1. Existing Shippers Will Not Subsidize the Project

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 As explained in Section IV above,

Gulf South is requesting reaffirmation to charge market-based rates which prevents existing customers on Gulf South’s system from subsidizing the costs of the Project as Gulf South is solely at-risk for the construction and maintenance costs of the Project and is limited to what the market can bear in establishing a market-based rate that it can charge for service on the Petal Complex

12 Id. at p. 61,745. 13 Id. at p. 61,745.

facilities. Gulf South is not relying on subsidization from existing customers for the Project facilities and has satisfied this threshold element of the Certificate Policy Statement.

2. The Project Will Have No Adverse Impacts on Gulf South’s Existing Customers and Existing Pipelines in the Market and Their Captive Customers.

The Project will have no adverse impacts on Gulf South’s existing customers and existing pipelines in the area or their captive customers. As previously stated, the Project is being constructed to improve operational flexibility, continue to provide reliable natural gas storage service, and potentially increase the number of injection and withdrawal cycles to satisfy the needs of new customers desiring service from the Petal Complex facilities. Gulf South is not modifying its caverns and will be able to continue to meet all of its firm obligations. Existing customers will not be adversely affected by the Project. Instead, service to existing customers will actually be enhanced by the Project, which will be available for use by new and existing customers. The Gulf

Coast marketplace is evolving to place more value on facilities and services which enable more injection and withdrawal cycles per year. Over the next 15 years, power plant demand is expected to grow by 7.1 Bcf/d and LNG export demand is forecasted to grow 14 Bcf/d. The construction and operation of the Petal III Compression Project will not have adverse effects on existing pipelines or their captive customers. Any potential adverse effects on other pipelines will be outweighed by the operational efficiencies and benefits created by the Project.14 For these reasons, the Project meets this element of the Policy Statement.

3. Gulf South Has Minimized Potential Impact on Landowners and Surrounding Communities.

The Petal III Compression Project has been designed to minimize impact on affected landowners and communities. Gulf South has sited the location of the new compressor units within

14 The Commission has recognized that it need not protect competitors from competition. Instead the goal is to insure fair competition. Id at p. 61,748.

the existing Petal III Station building, and the dehydration unit will be adjacent to the Petal III

Station building. All work is located on property owned by Gulf South. Gulf South will work with landowners, community representatives, and other stakeholders to minimize any concerns regarding the temporary work space needed to construct this project. Gulf South will follow the

Commission’s landowner notification requirements.15

4. Project Benefits Outweigh Residual Adverse Impacts

Through the design of the Project, Gulf South 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. The Petal III Compression Project:

(i) will not be subsidized by Gulf South’s existing shippers;

(ii) will not adversely affect Gulf South’s existing customers;

(iii) will have minimal adverse effect on landowners; and

(iv) will not have a significant impact on the environment.

The Project is needed to provide operational flexibility to enhance and maintain its storage services and firm transportation capacity in this area and to ensure that the Petal Complex is able to operate at the optimal design capacity. Gulf South’s proposed Petal III Compression Project meets all the criteria of the Certificate Policy Statement and is required by the present and future public convenience and necessity.

Gulf South respectfully requests that the Commission issue a final certificate of public convenience and necessity order by June 20, 2019, in order to permit Gulf South to place the

Project in service by June 2020.

15 18 C.F.R. § 157.6 (d) (2018).

VII. ENERGY EFFICIENCY

Gulf South considers the potential for energy efficiency in connection with major pipeline infrastructure projects. Gulf South has designed the Project to enhance operational efficiencies to the extent practical. Gulf South has selected electric motors rather than natural gas-fired engines or turbines, which will not result in air emissions at the Petal III Station. The Project will result in a net air quality benefit for the Petal III Station with the installation of a thermal oxidizer, as further detailed in Resource Report 9, in Volume I-A. Gulf South has selected its Project facilities for overall efficiency and that meet applicable air and noise regulatory requirements. Gulf South will employ a rigorous maintenance schedule to maintain pipeline efficiency.

VIII. OTHER APPLICATIONS AND FILINGS

Gulf South is not aware of any other application to supplement or effectuate this

Application that must or will be filed by Gulf South, its customers, or any other person with any

Federal, State, or regulatory body in order to complete the Petal III Compression Project.

IX. NOTICES

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. Pursuant to 18 C.F.R. §157.10 of the Commission’s Regulations, Gulf South will provide a complete copy of this Application to a central public library in each county in the project area within three business days of the filing of this Application.

Pursuant to 18 C.F.R. § 157.6 (d), Gulf South will make a good faith effort to notify all landowners, towns, communities, and local, state, and federal governments and agencies involved in the Project in accordance with this section.

X. DESCRIPTION OF EXHIBITS

This is an abbreviated application filed pursuant to Section 157.7 of the Commission’s regulations under the NGA. Listed are the exhibits required under 18 C.F.R. § 157.14(a). Gulf

South has omitted the exhibits and data that are inapplicable or are unnecessary to fully disclose the nature and extent of this proposal. A list of exhibits and documents filed with this Application, incorporated by reference, and omitted with reasons relied upon are submitted herewith and as follows.

Exhibit A Articles of Incorporation and By-laws Omitted. Gulf South filed as Exhibit A in Docket No. CP02-155 and incorporated herein by reference.

Exhibit B State Authorization Omitted. Gulf South filed as Exhibit B in Docket No. CP02-155 and incorporated herein by reference.

Exhibit C Company Officials Omitted. Gulf South filed as Exhibit C in Docket No. CP18-525 and incorporated herein by reference.

Exhibit D Subsidiaries and Affiliation Submitted herewith.

Exhibit E Other Pending Applications and Filings Omitted. Gulf South has no other applications or filings pending before the Commission that might significantly affect the instant application.

Exhibit F Location of Facilities Submitted herewith.

Exhibit F-I Environmental Report Submitted herewith in Volume I-A.

Exhibit G,G-I Flow Diagrams Submitted herewith. Information for Exhibits G, and G-I is included in Volume III, 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 Omitted. The pipeline flow model is not necessary due to incremental facilities being solely horsepower and dehydration.

Exhibit H Total Gas Supply Data Omitted.

Exhibit I Market Data Submitted herewith.

Exhibit J Federal Authorizations Submitted herewith.

Exhibit K Cost of Facilities Omitted. A waiver is requested, to the extent necessary, because Gulf South has market-based rate authority for the Petal Complex.

Exhibit L Financing Omitted. A waiver is requested, to the extent necessary, because Gulf South has market-based rate authority for the Petal Complex.

Exhibit M Construction, Operation and Management Omitted. Gulf South will construct or cause to be constructed, owned, operated, and maintained the proposed facilities.

Exhibit N Revenues - Expenses - Income Omitted. A waiver is requested, to the extent necessary, because Gulf South has market-based rate authority for the Petal Complex.

Exhibit O Depreciation and Depletion Omitted. A waiver is requested, to the extent necessary, because Gulf South has market-based rate authority for the Petal Complex.

Exhibit P Tariff Omitted. Gulf South does not propose to implement any new rates, change any existing rates or rate schedules, or make other tariff changes associated with this Application.

UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION

Gulf South Pipeline Company, LP Docket No. CP19-___-000

NOTICE OF APPLICATION

(October __, 2018)

Take notice that on October 9, 2018, Gulf South Pipeline Company, LP (“Gulf South”), 9 Greenway Plaza, Suite 2800, Houston, Texas 77046, filed in Docket No. CP19-___-000, pursuant to section 7(c) of the Natural Gas Act (NGA) this abbreviated application for a certificate of public convenience and necessity.

Gulf South proposes to construct, operate, and maintain two new electric-driven 5,000 horsepower compressor units, within the existing Petal III Compressor Station (“Petal III CS”) building, and a dehydration unit, thermal oxidizer, and other auxiliary, appurtenant facilities which will be all located adjacent to the Petal III CS in Forrest County, Mississippi (“Petal III Compression Project”). The proposed Petal III Compression Project will allow Gulf South to (i) increase the injection capability to 1,738 million standard cubic feet per day (“MMscf/d”); and (ii) restate the withdrawal deliverability to 2,495 MMscf/d.

Any questions regarding this application may be directed to Juan Eligio Jr., Supervisor of Regulatory Affairs, Gulf South Pipeline Company, LP, 9 Greenway Plaza, Suite 2800, Houston, Texas 77046; by telephone at (713) 479-3480 or by email at [email protected] or Payton Barrientos, Senior Regulatory Analyst, Gulf South Pipeline Company, LP, 9 Greenway Plaza, Suite 2800, Houston, Texas, 77046; by telephone at (713) 479-8157 or by email at [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. The Commission strongly encourages electronic submissions 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, at the address above. 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 filing may also be viewed on-line at http://www.ferc.gov using the “eLibrary” link and is available for review in the Commission’s Public Reference Room in Washington, DC. There is an “eSubscription” link on the web site that enables subscribers to receive email notification when a document is added to a subscribed docket. For assistance with any FERC Online service, please email FERC at [email protected] or call toll-free, (866) 208-3676 or for TYY, (202) 502-8659.

Comment Date: 5:00 pm Eastern Time on , 2018.

Kimberly D. Bose Secretary

GULF SOUTH PIPELINE COMPANY, LP DOCKET NO. CP19-___-000 EXHIBIT D

SUBSIDIARIES AND AFFILIATION

Gulf South Pipeline Company, LP is a wholly-owned subsidiary of Boardwalk Pipelines, LP, which is owned by Boardwalk Pipeline Partners, LP ("Boardwalk"). Boardwalk was formed by a subsidiary of Loews Corporation ("Loews") to own and operate the business that was previously conducted by Boardwalk Pipelines, LLC.

Boardwalk’s partners are Boardwalk GP, LP ("Boardwalk GP") and Boardwalk Pipelines Holding Corp. Boardwalk GP is the general partner of Boardwalk. Boardwalk GP is managed by its general partner, Boardwalk GP, LLC ("BGL"). Loews indirectly owns 100% of the equity interests in Boardwalk GP and BGL.

Gulf Crossing Pipeline Company LLC and Texas Gas Transmission, LLC, also interstate natural gas pipelines, are wholly-owned subsidiaries of Boardwalk. Boardwalk Storage Company, LLC, is also wholly owned by Boardwalk.

In addition to Boardwalk, Loews' principal subsidiaries are:

CNA Financial Corporation - Insurance Diamond Offshore Drilling, Inc. - Offshore Drilling Rigs Loews Hotels - Hotels Consolidated Container Company- Packaging GULF SOUTH PIPELINE COMPANY, LP DOCKET NO. CP19-___-000 EXHIBIT F

LOCATION OF FACILITIES

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PETAL

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^_ New Dehydration Unit "J Additional Compression Gulf South Pipeline Date: 10/3/2018 0 250 500 1,000 Feet

Document Path: O:\AppData\GIS\Cloud\Data\Commercial\GIS\Petal\Petal_Aerial\BWP-GIS-1780 - Petal Aerial.mxd GULF SOUTH PIPELINE COMPANY, LP DOCKET NO. CP19-_____-000 EXHIBIT G & G-I

FLOW DIAGRAMS

CONTAINS CRITICAL ENERGY INFRASTRUCTURE INFORMATION CEII

SEE VOLUME III

GULF SOUTH PIPELINE COMPANY, LP DOCKET NO. CP19-___-000 EXHIBIT I

MARKET DATA

Boardwalk Pipeline Partners, LP Market Power Analysis - Update

This market power analysis was conducted by Boardwalk Pipeline Partners, LP (“Boardwalk”) using the guidelines established in the Federal Energy Regulatory Commission (“FERC” or “Commission”) Policy Statement;1 the June 2006 Final Rule on Rate Regulation of Certain Natural Gas Storage Facilities (“Order No. 678”);2 and orders issued by the Commission granting market-based rate authorization to underground storage and market hub operators.

As described in the application, Gulf South Pipeline Company, LP (“Gulf South”) intends to reduce the deliverability associated with the Petal Storage Facilities (“Petal Complex”). Gulf South hereby provides a proposed market power study, attached as Appendix B, reflecting the reduction of certificated deliverability as described in the certificate application.

Boardwalk has undertaken this market power analysis to incorporate these changes in its overall storage capacity and deliverability. The updated analysis demonstrates that Boardwalk’s storage facilities, including Gulf South and Boardwalk Storage Company, LLC (“BSC”), will continue to meet the Commission’s standards for market-based rates for its storage services. This updated market power analysis reflects the most current data available as of June 2018.

The study incorporates updated data obtained primarily from FERC certificated capacities, the 191 Field Level Storage Data (Monthly) Report, as well as updated information obtained from companies’ public websites. The current market power analysis continues to utilize the same relevant geographic area, referred to as the Gulf Coast Production Area, and updated to reflect a total of 62 storage facilities.

Description of Boardwalk’s Gulf Coast Production Area Storage Facilities (by Affiliate)

Gulf South Pipeline Company, LP

Gulf South currently owns three natural gas storage facilities – the Bistineau Storage Facility near Shreveport, Louisiana, the Jackson Storage Facility near Jackson, Mississippi and, the Petal Complex located in Forrest County, Mississippi.

The Bistineau Storage Facility is jointly owned with Enable Midstream Partners, LP. Gulf South’s share of Bistineau’s working gas capacity is approximately 77,745 MMcf with an associated daily deliverability of 1,100 MMcf/d. The Commission has authorized Gulf South to charge market-based rates at Bistineau.3

The Jackson Storage Facility, with a working gas capacity of approximately 5,803 MMcf and associated daily deliverability of 303 MMcf/d, is used to support the storage component of Gulf South’s no-notice transportation services and for operational purposes.

1 Alternatives to Traditional Cost-of-Service Ratemaking for Natural Gas Pipelines and Regulation of Negotiated Transportation Services of Natural Gas Pipelines, 74 FERC ¶ 61,076, order on clarification, 74 FERC ¶ 61,194, order denying reh’g and clarification, 75 FERC ¶ 61,024, reh’g denied, 75 FERC ¶ 61,066 (1996), pet. for review denied sub nom., Burlington Res. Oil & Gas Co. v. FERC, 172 F.3d 918 (D.C. Cir. 1998) (“Policy Statement”). 2 Rate Regulation of Certain Natural Gas Storage Facilities, Order No. 678, FERC Stats. & Regs. [Regs. Preambles 2006-2007] ¶ 31,220, order on clarification and reh’g, Order No 678-A, 117 FERC ¶ 61,190 (2006). 3 See Koch Gateway Pipeline Co., 66 FERC ¶ 61,385 (1994).

The Petal Complex is located in Forrest County, Mississippi. For the Petal Complex, the total certificated working storage capacity is currently 29,629 MMcf with total daily deliverability of 3,430 MMcf/d. Storage services were initially offered at the Petal Complex in 1993 and subsequently the facilities have been expanded numerous times. In each instance,4 FERC authorized the use of market based rates to provide storage services at the Petal Complex, most recently on November 26, 2014, in Docket No. CP14- 473.

For purposes of the market power analysis, Boardwalk is providing both the current and proposed certificated working gas and deliverability capacities of the Petal Complex, as reflected in Appendices A and B.

Boardwalk Storage Company, LLC

BSC owns and operates facilities which are high-deliverability salt cavern natural gas storage facilities located in Iberville Parish, Louisiana. BSC facilities currently consist of one certificated natural gas storage salt cavern, Cavern No. 25, with certificated capacities totaling approximately 11.8 Bcf (7.6 Bcf working gas and 4.2 Bcf cushion gas); a compressor station comprised of four electrically driven compressors totaling 20,000 hp; and a pipeline header system. BSC is authorized to deliver natural gas at a rate of approximately 550 MMcf per day, and inject gas at a rate of approximately 350 MMcf per day. BSC’s Cavern No. 25 is currently providing storage service.

The Commission authorized BSC to charge market based rates for its storage and hub services commencing with its initial certificate issued in March 2008.5 BSC’s authorization to charge market based rates has been reaffirmed by the Commission on two subsequent occasions, once in 2010 and most recently on June 21, 2012.6

Requirements for Market-Based Rate Authority

Boardwalk is proposing to continue to provide firm and interruptible storage services at its storage facilities under the market-based rates authority previously granted by the Commission.

Under the Commission’s Policy Statement, there are three steps that must be evaluated by applicants for market-based rates to demonstrate that it lacks significant market power: (1) defining the relevant geographic and product markets; (2) measuring a firm’s market share and market concentration in the relevant market; and (3) evaluating ease of entry into the market as well as other factors relevant to the applicant’s ability to exercise market power.7

This market power analysis has evaluated each of these three steps utilizing an approach consistent with Boardwalk’s previous market power evaluations submitted in Docket Nos. CP11-50, CP02-155, CP13-31, RP93-205, CP12-464, CP14-473, and CP15-13.

4 See 64 FERC ¶ 61,190 (1993); 86 FERC ¶ 61,224 (1999); 90 FERC ¶ 61,243 (2000); 102 FERC ¶ 61,243 (2003); 118 FERC ¶ 61,253 (2007); 124 FERC ¶ 61,066 (2008); 132 FERC ¶ 61,168 (2010), 142 FERC ¶ 61,119 (2013), and 149 FERC ¶ 61,174 (2014). 5 See PetroLogistics Natural Gas Storage, LLC, 122 FERC ¶ 61,193 (2008). 6 See 139 FERC ¶ 62,246 (2012). See also 133 FERC ¶ 62,074 (2010). 7 Policy Statement at p. 61,231.

1. Defining the Relevant Geographic and Product Markets

Consistent with its previous market power studies, Boardwalk has continued to define its relevant geographic market area to reflect what is referred to as the Gulf Coast Production Area. The Gulf Coast Production Area includes the states of Louisiana and Mississippi, as well as the two neighboring states of Alabama and the eastern portion of Texas. The Commission has accepted this geographic market definition (i.e. the Gulf Coast Production Area) in numerous market-based storage orders.8 This area now includes 62 underground natural gas storage facilities, including the Gulf South, and BSC storage facilities. Also consistent with its most recent market power study, Boardwalk has continued to define its relevant product market to include all natural gas storage facilities (both interstate and intrastate) in the Gulf Coast Production Area.

2. Measuring Boardwalk’s Market Share and Market Concentration in the Relevant Market

The Commission explains in the Policy Statement that a seller can exercise market power by either raising price acting alone, or acting together with other sellers.9 In the Commission’s market power framework, an applicant’s market share is an indicator of whether an applicant can exercise market power “acting alone,” and the Herfindahl-Hirschman Index (“HHI”) indicates whether an applicant can “act together” with competing providers to exercise market power. Each seller’s market share is calculated by dividing its capacity by the total capacity of the market. A market share near or below 10 percent has been used by the Commission as a “safe harbor” and a lack of market power acting alone.10 In evaluating market shares above 10 percent, the Commission also considers other mitigating factors, such as ease of entry into the market.11

The HHI for the market is calculated by squaring each participant’s market share, and then summing the results and typically multiplying this figure by 10,000 to avoid decimals. The Policy Statement provides that an HHI of less than 1,800 indicates a market in which sellers cannot exercise market power acting together.12 A low HHI is indicative of an unconcentrated market in which sellers will be unable, acting together, to increase price above competitive levels.

8 See, e.g., Gulf South Pipeline Co., LP, 149 FERC ¶ 61,174 (2014); D'lo Gas Storage, LLC, 140 FERC ¶ 61,182 (2012) Sawgrass Storage, LLC, 138 FERC ¶ 61,180 (2012); Golden Triangle Storage, Inc., 138 FERC ¶ 61,036 (2012); Cadeville Gas Storage, LLC, 132 FERC ¶ 61,115 (2010); BCR Holdings, Inc., 132 FERC ¶ 61,085 (2010); Atmos Pipeline and Storage, LLC, 127 FERC ¶ 61,260 (2009); Liberty Gas Storage, L.L.C., 127 FERC ¶ 61,221 (2009) (“Liberty”); Southeast Gas Storage, LLC, 125 FERC ¶ 61,307 (2008); Leaf River Energy Center, LLC, 125 FERC ¶ 61,131 (2008); Bay Gas Storage Co., Docket Nos. PR08-7-000 and PR08-7-001 (2008); PetroLogistics Natural Gas Storage, LLC, 122 FERC ¶ 61,193 (2008); and Monroe Gas Storage Co., 121 FERC ¶ 61,285 (2007). 9 Policy Statement at p. 61,234. 10 Red Lake Storage, LP, 102 FERC ¶ 61,077 at P 39 (2003). 11 Id. The Commission has granted market-based rate authority in Copiah Storage, LLC, 121 FERC ¶ 61,272 (2007), with a 22.0 percent market share for daily deliverability capacity; ONEOK Gas Storage, L.L.C., 90 FERC ¶ 61,283 (2000), with a market share of 21.8 percent for daily deliverability capacity; in Egan Hub Partners, LP, 95 FERC ¶ 61,395 (2001) with a 19.3 percent market share for incoming hub capacity; and in Liberty, with a 16.0 percent market share for daily deliverability. 12 Policy Statement at p. 61,235.

Boardwalk has calculated the market shares and HHI’s for both the working gas capacity and the daily deliverability in the relevant market area, grouped by corporate ownership. See attached Appendices A and B.

As shown in Appendix B, the proposed calculated HHI’s for the relevant market are 1,137 for working gas and 791 for daily deliverability, suggesting that Boardwalk lacks the ability to exercise market power at its storage facilities acting together with other storage providers. These proposed HHI’s are significantly below the 1,800 level that the Commission has determined would warrant additional scrutiny.

The analysis further indicates that, after incorporating the reduction to the deliverability at the Petal Complex, Boardwalk will possess a 10.03% market share for working gas capacity and a 9.63% market share for daily deliverability.

Given the calculated, proposed HHI results and the other mitigating factors discussed below, these market shares indicate that Boardwalk continues to lack the ability to exercise market power at its storage facilities acting alone.

3. Evaluating Ease of Entry into the Market as well as Other Relevant Factors

The Commission has consistently stated that ease of entry into the relevant market can limit the potential for natural gas storage companies operating in an area to exercise market power.13 The attached Appendices A and B provide evidence on the ease of entry in the Gulf Coast Production Area. Both Appendices A and B show there are currently 62 separate facilities owned by 25 corporate entities in the relevant market area. Of the 25 corporate entities, 23 of them possess a working gas market share of less than 10 percent, which demonstrates that no significant barriers to entry exists with respect to the size and scale of market participants. The ease of entry into the Gulf Coast Production Area is also demonstrated by the multitude of recently certificated projects for expansion and new capacity by the Commission. Appendix C lists the 59 certificated storage projects in the Gulf Coast Production Area since 2000, which amounts to approximately 793 Bcf of working gas capacity and 45 Bcf/d of daily deliverability. Appendix D lists currently certificated storage projects which are expected to be placed into service in the future, including capacity expected outside of one year.14 The appendices included herein all demonstrate the ease of entry within the Gulf Coast Production Area.

Furthermore, the product market is conservative, since it excludes potential competition from non-storage alternatives, including local natural gas production, pipeline capacity and park and loan services, and financial market instruments, which the Commission allows to be included in relevant market evaluations.15

13 See, e.g., Sawgrass, 138 FERC ¶ 61,180 at P 43; Golden Triangle, 138 FERC ¶ 61,036 at P 19; Perryville Gas Storage LLC, 137 FERC ¶ 61,160 at P 18 (2011). 14 EIA reflects AGL Resource’s development of its Golden Triangle Caverns 3 and 4 as “Planned;” however, on December 20, 2017 in Docket No. CP11-531-000, FERC denied its request for an extension of time to complete the construction of these caverns. 15 Order No. 678, 115 FERC ¶ 61,343 at PP 6, 48.

Conclusion

The market power analysis indicates that after incorporating the changes to the deliverability at the Petal Complex, Boardwalk will continue to lack market power for its storage services in its relevant geographic market. The market shares for Boardwalk and the HHI’s in the relevant geographic market are low, with the HHI’s significantly below the 1,800 HHI threshold which is indicative of possible market power concerns. The analysis also demonstrates that there is substantial ease of entry into the Gulf Coast Production Area that can help mitigate any remaining possible market power concerns.

For all the above reasons, the revised storage capacities at Boardwalk’s Petal Complex should not adversely affect Boardwalk’s authorization to charge market based rates at its various storage facilities pursuant to the Commission’s Alternative Rate Policy Statement.

Exhibit I Appendix A

Page 1 of 2

Appendix A - Natural Gas Storage Fields in the Gulf Coast Production Area (Operational) HHI and Market Share - Current Daily Working Gas Deliverability State Corporate Owners Operator Gas Storage Field Capacity (MMcf) Market Share HHI (MMcf/d) Market Share HHI

1 LA AGL Resources (1) Pivotal Energy Jefferson Island 5,733 720 2 TX Pivotal Energy Golden Triangle / Spindletop 13,784 600 Subtotal 19,517 1.62% 3 1,320 2.80% 8

3 TX Alinda Capital Partners (2) Hill-Lake Gas Storage, LLC Hill Lake 9,879 350 4 TX Worsham-Steed Gas Storage, LLC Worsham-Steed 26,214 500 Subtotal 36,092 3.00% 9 850 1.80% 3

5 MS Atmos Energy (3) Mississippi Valley Gas Co. Amory 995 25 6 MS Mississippi Valley Gas Co. Goodwin 913 6 7 MS Atmos Pipeline Company Bethel 6,232 597 8 TX Atmos Pipeline Company Lake Dallas 2,944 152 9 TX Atmos Pipeline Company La-Pan 3,407 119 10 TX Atmos Pipeline Company New York City 5,619 152 11 TX Atmos Pipeline Company Tri-Cities 27,692 410 Subtotal 47,802 3.97% 16 1,461 3.10% 10

12 TX Cago, Inc. (4) Cago, Inc. Ambassador (Mississippi) 651 0.05% 0 1 0.00% 0

13 LA Cardinal Gas Storage Partners (5) Arcadia Gas Storage , LLC Arcadia 15,500 900 14 LA Cadeville Gas Storage, LLC Cadeville/ James Sand 17,000 250 15 MS Monroe Gas Storage Four Mile Creek 6,700 237 16 LA Perryville Gas Storage, LLC Perryville 11,850 641 Subtotal 51,050 4.24% 18 2,029 4.31% 19

17 LA Enable Midstream (6) Enable Gas Transmission Ruston 4,000 70 18 LA Enable Mississippi River East Unionville 27,568 487 19 LA Enable Mississippi River West Unionville 11,466 190 20 LA Enable Gas Transmission Bistineau 8,000 100 Subtotal 51,034 4.24% 18 847 1.80% 3

21 LA Enlink (7) Bridgeline Holdings LP Sorrento 3,258 240 22 LA Enlink Napoleonville 7,752 500 23 TX Chevron Phillips Chemical Co. Clemens NE Cavern 20 223 75 Subtotal 11,234 0.93% 1 815 1.73% 3

24 TX Devon Energy Corp./Enlink (8) Enlink Midstream Services, LLC Lone Camp 713 0.06% 0 27 0.06% 0

25 TX Dow Chemical Co. (9) Dow Chemical Co. Stratton Ridge (DW69) 760 0.06% 0 100 0.21% 0

26 TX Energy Transfer Partners (10) Houston Pipe Line Co. Bammel 52,500 1,200 27 TX Energy Transfer Fuel Bethel Salt Dome 7,721 400 28 TX Energy Transfer Fuel South Bryson 5,968 175 Subtotal 66,189 5.50% 30 1,775 3.77% 14

29 TX Enstor (11) Enstor Katy Storage and Transportation LP Katy Hub & Storage 23,500 700 30 AL MultiFuels/Freebird Assets, Inc. Freebird / East Detroit 11,200 305 31 MS Caledonia Energy Partners, LLC Caledonia/Carter 18,500 550 Subtotal 53,200 4.42% 20 1,555 3.30% 11

32 LA Enterprise Products Partners (12) Pontchartrain Natural Gas System Pontchartrain /Grand Bayou 1,600 225 33 TX Enterprise Texas Pipeline Boling 12,990 1,400 Subtotal 14,590 1.21% 1 1,625 3.45% 12

34 TX Entergy (13) PB Energy Storage Services Spindletop 7,200 0.60% 0 480 1.02% 1

35 TX Freeport LNG (14) FLNG Storage LP Stratton Ridge Salt Dome 4,500 0.37% 0 500 1.06% 1 Page 2 of 2

36 TX Inergy Midstream/Crestwood Midstream LP (15) Tres Palacios Gas Storage LLC Tres Palacios / Markham 34,910 2.90% 8 2,500 5.31% 28

37 TX Kinder Morgan Energy Part. (16) Underground Services Markham LP Markham 21,900 1,080 38 TX Underground Storage LLC Pierce Junction 2,230 250 39 TX Kinder Morgan Texas Pipeline Dayton North 11,000 875 40 TX Kinder Morgan Tejas Pipeline Stratton Ridge 1,410 100 41 TX Natural Gas Pipeline Co. North Lansing 96,000 1,240 42 TX Kinder Morgan Tejas Pipeline West Clear Lake 99,350 895 43 LA Bear Creek Storage Company Bear Creek 59,200 900 44 MS Southern Natural Gas Muldon 36,000 750 Subtotal 327,090 27.16% 738 6,090 12.93% 167

45 TX Lower Colorado River Authority (17) Lower Colorado River Authority Hilbig 4,000 0.33% 0 110 0.23% 0

46 MS Macquarie Infrastructure (18) Leaf River Energy Center LLC Leaf River / New Home Dome 32,203 2.67% 7 2,500 5.31% 28

47 TX Phillips 66 (DCP Midstream) (19) Centana Intrastate Pipeline Co. Spindletop 6,800 0.56% 0 250 0.53% 0

48 LA Plains All American (20) Pine Prairie Energy Center, LLC Pine Prairie Energy Center 56,000 3,200 49 MS SG Resources Mississippi LLC Southern Pines Energy Center 40,000 2,400 Subtotal 96,000 7.97% 64 5,600 11.89% 141

50 AL Sempra Energy (21) Bay Gas Storage Company Ltd. McIntosh 21,950 2,400 51 MS Mississippi Hub LLC Mississippi Hub/Bond 23,222 900 Subtotal 45,172 3.75% 14 3,300 7.01% 49

52 LA Southern Union Co. (22) Trunkline Gas Pipeline Epps 13,000 1.08% 1 150 0.32% 0

53 LA Spectra Energy (23) Bobcat Gas Storage Bobcat Gas Storage / Port Barre Salt 28,440 2,000 54 LA Texas Eastern Transmission, LP Egan 18,710 2,500 55 TX Moss Bluff Hub Partners LP Moss Bluff 20,960 1,100 56 TX (DCP Midstream) Centana Intrastate Pipeline Co. Spindletop 6,800 250 Subtotal 74,910 6.22% 39 5,850 12.42% 154

57 LA Williams Companies (24) Transcontinental Gas Pipe Line Washington 75,000 790 58 MS Transcontinental Gas Pipe Line Eminence 10,048 1,198 Subtotal 85,048 7.06% 50 1,988 4.22% 18

59 LA Boardwalk Pipelines (25) Gulf South Pipeline Co., LP Bistineau 77,745 1,100 60 MS Gulf South Pipeline Co., LP Jackson 5,803 303 61 MS Gulf South Pipeline Co., LP Petal Gas Storage/ Hattiesburg 29,629 3,430 62 LA Boardwalk Storage Company, LLC Choctaw Cavern 25 7,600 550 Subtotal 120,777 10.03% 101 5,383 11.43% 131

TOTALS 1,204,442 100.00% 1,137 47,107 100.00% 802

Sources: Energy Information Administration, 191 Field Level Storage Data (Monthly) Report (As of June 2018), and Boardwalk FERC Orders.

Exhibit I Appendix B

Page 1 of 2

Appendix B - Natural Gas Storage Fields in the Gulf Coast Production Area (Operational) HHI and Market Share - Proposed Daily Working Gas Deliverability State Corporate Owners Operator Gas Storage Field Capacity (MMcf) Market Share HHI (MMcf/d) Market Share HHI

1 LA AGL Resources (1) Pivotal Energy Jefferson Island 5,733 720 2 TX Pivotal Energy Golden Triangle / Spindletop 13,784 600 Subtotal 19,517 1.62% 3 1,320 2.86% 8

3 TX Alinda Capital Partners (2) Hill-Lake Gas Storage, LLC Hill Lake 9,879 350 4 TX Worsham-Steed Gas Storage, LLC Worsham-Steed 26,214 500 Subtotal 36,092 3.00% 9 850 1.84% 3

12 TX Cago, Inc. (4) Cago, Inc. Ambassador (Mississippi) 651 0.05% 0 1 0.00% 0

21 LA Enlink (7) Bridgeline Holdings LP Sorrento 3,258 240 22 LA Enlink Napoleonville 7,752 500 23 TX Chevron Phillips Chemical Co. Clemens NE Cavern 20 223 75 Subtotal 11,234 0.93% 1 815 1.77% 3

24 TX Devon Energy Corp./Enlink (8) Enlink Midstream Services, LLC Lone Camp 713 0.06% 0 27 0.06% 0

25 TX Dow Chemical Co. (9) Dow Chemical Co. Stratton Ridge (DW69) 760 0.06% 0 100 0.22% 0

34 TX Entergy (13) PB Energy Storage Services Spindletop 7,200 0.60% 0 480 1.04% 1

35 TX Freeport LNG (14) FLNG Storage LP Stratton Ridge Salt Dome 4,500 0.37% 0 500 1.08% 1 Page 2 of 2

36 TX Inergy Midstream/Crestwood Midstream LP (15) Tres Palacios Gas Storage LLC Tres Palacios / Markham 34,910 2.90% 8 2,500 5.41% 29

45 TX Lower Colorado River Authority (17) Lower Colorado River Authority Hilbig 4,000 0.33% 0 110 0.24% 0

46 MS Macquarie Infrastructure (18) Leaf River Energy Center LLC Leaf River / New Home Dome 32,203 2.67% 7 2,500 5.41% 29

47 TX Phillips 66 (DCP Midstream) (19) Centana Intrastate Pipeline Co. Spindletop 6,800 0.56% 0 250 0.54% 0

50 AL Sempra Energy (21) Bay Gas Storage Company Ltd. McIntosh 21,950 2,400 51 MS Mississippi Hub LLC Mississippi Hub/Bond 23,222 900 Subtotal 45,172 3.75% 14 3,300 7.15% 51

52 LA Southern Union Co. (22) Trunkline Gas Pipeline Epps 13,000 1.08% 1 150 0.32% 0

57 LA Williams Companies (24) Transcontinental Gas Pipe Line Washington 75,000 790 58 MS Transcontinental Gas Pipe Line Eminence 10,048 1,198 Subtotal 85,048 7.06% 50 1,988 4.31% 19

59 LA Boardwalk Pipelines (25) Gulf South Pipeline Co., LP Bistineau 77,745 1,100 60 MS Gulf South Pipeline Co., LP Jackson 5,803 303 61 MS Gulf South Pipeline Co., LP Petal Gas Storage/ Hattiesburg 29,629 2,495 62 LA Boardwalk Storage Company, LLC Choctaw Cavern 25 7,600 550 Subtotal 120,777 10.03% 101 4,448 9.63% 93

TOTALS 1,204,442 100.00% 1,137 46,172 100.00% 791

Sources: Energy Information Administration, 191 Field Level Storage Data (Monthly) Report (As of June 2018), and Boardwalk FERC Orders.

Exhibit I Appendix C

Appendix C - Certificated Natural Gas Projects Since 2000 Gulf Coast Production Area

Daily Working Gas Deliverability Company (Storage Field or Project) State Docket No. Order Date Capacity (MMcf) (MMcf/d)

1 Petal Gas Storage Company, LLC (Forrest) MS CP99-615 3/15/2000 3,600 640

2 Egan Hub Partners, LP (Egan Hub) LA CP01-66 6/14/2001 4,000 1,500

3 Copiah County Storage Company (Copiah) MS CP02-25 6/13/2002 3,300 300

4 SG Resources Mississippi, LLC (Southern Pines Energy Center) MS CP02-229 10/10/2002 12,000 1,200

5 Gulf South Pipeline Company, LP (Magnolia Gas Storage Facility) LA CP02-155 11/21/2002 10,600 600

6 Natural Gas Pipeline Co of America (North Lansing Storage Field Project) TX CP02-391 12/24/2002 10,700 1,100

7 Petal Gas Storage Company, LLC (Forrest) MS CP02-387 2/28/2003 8,000 800

8 Egan Hub Partners, LP (Egan Hub) LA CP03-12 4/2/2003 8,000 1,500

9 Pine Prairie Energy Center, LLC LA CP04-379 11/23/2004 24,000 3,200

10 Gulf South Pipeline Company, LP (Jackson Storage Field Project) MS CP04-366 3/24/2005 1,200 250

11 Freebird Gas Storage, LLC (East Detroit) AL CP05-29 4/15/2005 6,000 160

12 Caledonia Energy Partners, LLC (Caledonia Energy Complex Project) MS CP05-15 4/19/2005 11,720 330

13 Liberty Gas Storage, LLC (Liberty Gas Storage Project) LA CP05-92 12/8/2005 17,600 1,000

14 Natural Gas Pipeline Co of America (Sayre Storage Field Expansion) TX CP05-405 1/23/2006 10,000 1,240

15 Port Barre Investments, LLC d/b/a Bobcat Gas Storage LA CP06-66 7/20/2006 12,000 1,200

16 MoBay Gas Storage Hub, Inc. AL CP06-398 12/20/2006 50,000 1,000

17 SG Resources Mississippi, LLC (Southern Pines Energy Center) MS CP02-229-002 1/24/2007 12,000 1,200

18 Mississippi Hub, LLC MS CP07-4 2/15/2007 12,000 1,200

19 Petal Gas Storage, LLC MS CP07-30 3/28/2007 2,850 475

20 Port Barre Investments, LLC d/b/a Bobcat Gas Storage LA CP06-66-001 4/19/2007 1,500 0

21 Tres Palacios Gas Storage, LLC TX CP07-90 9/20/2007 36,000 2,500

22 Egan Hub Storage, LLC (Egan Hub Fourth Cavern Project) LA CP07-88 10/18/2007 8,000 200

23 Copiah Storage, LLC (Copiah Storage Project) MS CP02-25-001 12/20/2007 12,200 300

24 Monroe Gas Storage Company, LLC MS CP07-406 12/21/2007 12,000 465

25 Golden Triangle Storage, Inc. TX CP07-414 12/31/2007 16,000 600

26 PetroLogistics Natural Gas Storage, LLC LA CP07-427 3/3/2008 6,000 300

27 Port Barre Investments, LLC d/b/a Bobcat Gas Storage LA CP06-66-002 3/4/2008 2,100 0

28 Enstor Houston Hub Storage and Transportation, LP TX CP07-390 4/4/2008 30,000 1,000

29 Black Bayou Gas Storage LA CP07-451 6/19/2008 15,000 1,200

30 Tarpon Whitetail Gas Storage, LLC MS CP08-46 6/19/2008 8,600 300

31 Caledonia Energy Partners, LLC (County Line/Delta Pressure) MS CP08-52 7/17/2008 5,200 147

32 Petal Gas Storage, LLC MS CP08-66 7/18/2008 10,000 1,094

33 Southeast Gas Storage (Black Warrior Storage Project) MS CP08-418 12/18/2008 24,700 500 Daily Working Gas Deliverability Company (Storage Field or Project) State Docket No. Order Date Capacity (MMcf) (MMcf/d)

34 SG Resources Mississippi, LLC MS CP02-229-004 11/20/2008 16,000 2,400

35 Leaf River Energy Center, LLC MS CP08-8 10/30/2008 32,000 2,500

36 Port Barre Investments, LLC d/b/a Bobcat Gas Storage LA CP09-19 3/19/2009 24,000 1,800

37 Liberty Gas Storage, LLC LA CP08-454 6/3/2009 18,900 1,200

38 Atmos Pipeline and Storage LLC LA CP09-22 6/18/2009 15,000 1,500

39 Pine Prairie Energy Center Expansion LA CP04-379-002 8/5/2009 24,000 0

40 Mississippi Hub, LLC MS CP09-110 9/17/2009 3,000 200

41 Perryville Gas Storage, LLC LA CP09-418 1/26/2010 15,000 600

42 PetroLogistics Natural Gas Storage, LLC LA CP10-66 3/31/2010 5,300 0

43 Port Barre Investments, LLC d/b/a Bobcat Gas Storage LA CP10-30 3/31/2010 9,300 0

44 MoBay Gas Storage Hub LLC AL CP06-398-002 5/20/2010 9,600 0

45 Mississippi Hub, LLC MS CP10-65 7/2/2010 15,000 1,400

46 BCR Holdings, Inc. LA CP10-40 7/26/2010 15,000 1,200

47 Cadeville Gas Storage LLC LA CP10-16 8/10/2010 16,400 420

48 Petal Gas Storage, LLC MS CP10-50 8/24/2010 5,000 600

49 PetroLogistics Natural Gas Storage, LLC LA CP10-473 10/21/2010 4,600 150

50 Tres Palacios Gas Storage, LLC TX CP10-499 12/14/2010 2,400 0

51 Tallulah Gas Storage, LLC LA CP10-494 3/18/2011 24,000 1,575

52 Pine Prairie Energy Center, LLC LA CP11-1 5/19/2011 32,000 0

53 Perryville Gas Storage, LLC LA CP11-159 11/29/2011 5,000 0

54 Golden Triangle Storage, Inc. TX CP11-531 1/19/2012 16,600 0

55 Sawgrass Storage, LLC LA CP11-523 3/15/2012 30,000 300

56 PetroLogistics Natural Gas Storage, LLC LA CP11-50 6/19/2012 7,000 850

57 D'Lo Gas Storage LLC MS CP12-39 9/6/2012 24,000 1,200

58 Leaf River Energy Center LLC MS CP12-526 3/21/2013 16,000 0

59 Mississippi Hub, LLC MS CP13-493 9/23/2013 1,700 0

TOTALS 793,670 45,396 Source: FERC Office of Energy Projects, "Certificated Natural Gas Storage Projects Since 2000"(As of November 2016) and FERC Orders

Exhibit I Appendix D

Appendix D - EIA Document on Upcoming U.S. Natural Gas Storage Facilities (Limited to reflect any projects located in TX, LA, MS, and AL)

Total Capacity Working Deliverability Project Name Operator Company Year in Service Development Status State Storage Region (Bcf) Capacity (Bcf) (MMcf/day) Field Type FERC Regulated? Docket Bobcat Gas Storage Cavern 3 Spectra Energy Corp 2017 Terminated LA South Central 12 10 - Salt Dome Yes CP10-30; CP11-124-000

Crowville Salt Dome Project Cavern 2 Perryville Gas Storage LLC 2017 Operational LA South Central 4 - 600 Salt Dome Yes CP09-418 Golden Triangle Storage Cavern 3 AGL Resources 2017 Planned TX South Central 11 7 - Salt Dome Yes CP11-531 Golden Triangle Storage Cavern 4 AGL Resources 2017 Planned TX South Central 11 7 - Salt Dome Yes CP11-531 D'Lo Gas Storage Cavern 1 D'Lo Gas Storage LLC 2018 On Hold MS South Central - 8 400 Salt Dome Yes CP12‐39-000 D'Lo Gas Storage Cavern 1 D'Lo Gas Storage LLC 2018 On Hold MS South Central - 8 400 Salt Dome Yes CP12‐39-000 D'Lo Gas Storage Cavern 2 D'Lo Gas Storage LLC 2018 On Hold MS South Central - 8 400 Salt Dome Yes CP12‐39-000 D'Lo Gas Storage Cavern 2 D'Lo Gas Storage LLC 2018 On Hold MS South Central - 8 400 Salt Dome Yes CP12‐39-000 D'Lo Gas Storage Cavern 3 D'Lo Gas Storage LLC 2018 Planned MS South Central - 8 400 Salt Dome Yes CP12‐39-000

Highlighted cells contain updated information

Source: Unformatted original document can be found at : http://www.eia.gov/naturalgas/storage/EIA-Storageplan.xls, Updated Q4 2017 GULF SOUTH PIPELINE COMPANY, LP DOCKET NO. CP19-___-000 EXHIBIT J

FEDERAL AUTHORIZATIONS

Federal and State Permits and Approvals

Agency or Organization Permit/Approval Status

Federal

Federal Energy Regulatory Certificate of Public Convenience and Provided herein Commission Necessity

U.S. Fish and Wildlife Service – Endangered Species Act, Section 7 Concurrence issued Mississippi Ecological Field Consultation September 24, 2018 Office State

Received occurrence letter Mississippi Department of Threatened and Endangered Species with recommendations Wildlife, Fisheries, and Parks Consultation/Clearance August 6, 2018

Mississippi Department of National Historic Preservation Act Section Request submitted Archives and History 106 Consultation September 20, 2018 Notification to be provided Mississippi Department of prior to discharge in Hydrostatic Test Discharge Permit Environmental Quality accordance with Gulf South’s Statewide General Permit