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Florida Southeast Connection can add affiliate's gas lateral, FERC says

The Federal Energy Regulatory Commission allowed Florida Southeast Connection LLC to pick up a natural gas lateral from affiliate Florida Power & Light Co. and add it to its interstate pipeline system.

In an Aug. 6 order, FERC issued Florida Southeast Connection a Natural Gas Act certificate letting it acquire and operate the 38-mile Riviera lateral and related facilities in Florida's Martin and Palm Beach counties. FERC Chairman Kevin McIntyre did not participate in the decision.

FERC asked Florida Southeast Connection to recalculate its rates based on a return on equity of 10.55%, which the commission found more appropriate for the lateral than the 13% return on equity that was approved for Florida Southeast's new greenfield pipeline. The lateral and related facilities, which include three compressors, have a book value of about $167 million. The infrastructure swap will not involve construction, and the commission said there was no need for an environmental assessment.

Florida Southeast Connection and Florida Power & Light are subsidiaries of NextEra Energy Inc. NextEra formed Florida Southeast Connection to build and operate the 126-mile pipeline, which FERC approved in February 2016 as part of the larger Southeast Market Pipelines project. The Florida Southeast Connection mainline runs from the Sabal Trail Transmission LLC gas pipeline system at a point near Intercession City, Fla., to a delivery point with Florida Power & Light at its Martin Next Generation Solar Energy Center near Indiantown. Florida Power & Light is the only firm shipper on the pipeline.

Florida Southeast Connection on March 9 filed an abbreviated application for authorization for the Riviera lateral acquisition. The acquisition will let Florida Southeast Connection provide up to 384,000 Dth/d of firm transportation service to a delivery point at Florida Power & Light's Riviera Beach Next Generation Clean Energy Center. Florida Southeast Connection has entered into a precedent agreement with Florida Power & Light for 300,000 Dth/d of firm service on the lateral beginning Sept. 1. (FERC docket CP18-108)