173 FERC ¶ 61,048 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Before Commissioners: Neil Chatterjee, Chairman; Richard Glick and James P. Danly. ANR Pipeline Company Docket No. CP20-1-001 ORDER AMENDING CERTIFICATE (Issued October 15, 2020) On March 19, 2020, the Commission issued a certificate authorizing ANR Pipeline Company (ANR) to acquire five natural gas storage facilities in Michigan that ANR previously leased from its affiliate, Mid Michigan Gas Storage Company (Mid Michigan),1 and to establish a new lease with Mid Michigan for base gas in the acquired storage fields.2 On July 20, 2020, ANR filed an application pursuant to section 7(c) of the Natural Gas Act (NGA)3 and Part 157 of the Commission’s regulations4 requesting authorization to amend the Certificate Order as it relates to the lease agreement with Mid Michigan. For the reasons discussed below, we grant the requested authorizations. 1 Mid Michigan (formerly Michigan Consolidated) is a “Hinshaw” pipeline under section 1(c) of the NGA, exempt from the Commission’s jurisdiction. Mich. Consolidated Gas Co., 14 FPC 535 (1955) (confirming Mid Michigan’s status as a Hinshaw pipeline). 2 ANR Pipeline Co., 170 FERC ¶ 61,234 (2020) (Certificate Order). 3 15 U.S.C. § 717f(c). 4 18 C.F.R. pt. 157 (2020). Docket No. CP20-1-001 - 2 - I. Background and Proposal ANR,5 a corporation organized under Delaware law, is a natural gas company as defined by section 2(6) of the NGA6 engaged in the transportation and storage of natural gas in interstate commerce. ANR’s interstate transmission system consists of approximately 9,400 miles of pipeline extending from Texas and Oklahoma to Wisconsin and Michigan. ANR also owns and operates ten natural gas storage facilities in central Michigan. The Certificate Order authorized ANR to acquire five previously leased natural gas storage facilities from Mid Michigan, including the Austin, Goodwell, Lincoln-Freeman, Loreed, and Reed City storage facilities (acquired storage fields).7 The Certificate Order also authorized ANR to establish an interim lease agreement with Mid Michigan to lease the Mid Michigan-owned base gas in the acquired storage fields.8 The interim lease allows ANR to continue to use the Mid Michigan-owned base gas to operate the storage facilities while ANR purchases replacement base gas over time. As approved, the lease agreement requires ANR to periodically hold an open season to solicit offers for the purchase of base gas, and as ANR purchases its own base gas, the quantity of Mid Michigan-owned base gas covered by the interim lease will decrease until it reaches zero.9 ANR proposes to amend its certificate of public convenience and necessity to implement changes to its lease agreement with Mid Michigan related to the open season procedures applicable to ANR’s base gas purchases.10 Specifically, ANR proposes to amend: (1) the timing of base gas purchases, allowing base gas transfers between ANR and the winning bidder to take place on a mutually agreed-upon date instead of requiring the transfer date to be the first day of the month; and (2) the open season procedural 5 ANR is an indirect, wholly owned subsidiary of TransCanada PipeLine USA Ltd. ANR July 20, 2020 Amendment Application at 2 (ANR Amendment Application). 6 15 U.S.C. § 717a(6). 7 Certificate Order, 170 FERC ¶ 61,234 at PP 3, 27. 8 Id. P 23. 9 Id. P 6. 10 ANR Amendment Application at 4. Docket No. CP20-1-001 - 3 - steps, adding procedures and criteria for open season bids and awards in the event the parties agree to a pre-arranged base gas contract.11 II. Notice, Interventions, and Comments Notice of ANR’s application was published in the Federal Register on July 29, 2020, establishing August 13, 2020, as the deadline for filing comments and motions to intervene.12 No comments, protests, or motions to intervene were filed. III. Discussion Because the leased storage facilities are used to provide natural gas storage service in interstate commerce, subject to the Commission’s jurisdiction, ANR’s proposal is subject to the requirements of subsections (c) and (e) of section 7 of the NGA.13 In the Certificate Order, the Commission determined that ANR’s base gas lease agreement with Mid Michigan was in the public convenience and necessity, finding that the lease arrangement had significant benefits, the lease payments were satisfactory, and the project would not negatively affect other customers.14 In making the determination, the Commission noted that the lease is for a limited duration and allows ANR to use a transparent, arms-length process to acquire the base gas needed to operate the storage fields.15 The changes to the lease agreement that ANR proposes are not discriminatory and do not give either ANR or Mid Michigan preferential rights. As ANR notes in its application, the proposed revisions will not only provide clarity to the procedures and criteria for open season bids and awards when there is a pre-arranged base gas contract, but will also provide ANR and the winning bidder of each base gas bid with the 16 flexibility to determine when such transfer takes place. Therefore, the amended lease 11 Id. at 4–5, Ex. 1. 12 85 Fed. Reg. 45,630 (July 29, 2020). 13 15 U.S.C. § 717f(c), (e). 14 Certificate Order, 170 FERC ¶ 61,234 at P 22. 15 Id. P 21. 16 ANR Amendment Application at 5. Docket No. CP20-1-001 - 4 - agreement continues to satisfy the requirements of the Certificate Order, and the proposed revisions do not alter the Commission’s findings in that order.17 A. Environmental Analysis On July 30, 2020 Commission staff issued an Environmental Assessment Report finding that ANR’s proposal qualifies as a categorical exclusion under section 380.4(a)(27) of the Commission’s regulations.18 B. Conclusion Based on our determination that the proposed amendment will not alter the Commission’s findings in the Certificate Order and that the proposal will have no impacts on the environment, we find under section 7 of the NGA that the public convenience and necessity requires approval of ANR’s proposal to amend its certificate as it relates to the lease agreement with Mid Michigan for base gas in the acquired storage fields, as discussed herein. At a hearing held on October 15, 2020, the Commission, on its own motion, received and made a part of the record in this proceeding all evidence, including the application, and exhibits thereto, and all comments, and upon consideration of the record. 17 Certificate Order, 170 FERC ¶ 61,234 at PP 18–22. 18 18 C.F.R. § 380.4(a)(27) (2020) (stating that the Commission will not prepare an environmental assessment or environmental impact statement for the sale, exchange, or transportation of natural gas under sections 4, 5, and 7 of the Natural Gas Act that does not require construction of facilities). Docket No. CP20-1-001 - 5 - The Commission orders: (A) ANR’s certificate of public convenience and necessity is amended to permit ANR to implement the changes related to the open season procedures in its lease agreement with Mid Michigan for base gas in the acquired storage fields, as more fully described in the body of this order and in Exhibit 1 of ANR’s application. (B) In all other respects, the Certificate Order, as amended, shall remain in full force and effect. By the Commission. ( S E A L ) Kimberly D. Bose, Secretary. .