GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

S	2 

SENATE BILL 570
Corrected Copy 4/5/95

Short Title:  Pipeline Generation Exemption.	(Public)

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Sponsors: Senators Soles, Jordan, Parnell, Kerr, and Warren.

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Referred to:  Commerce

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April 3, 1995

A BILL TO BE ENTITLED
AN ACT TO FACILITATE EXTENSION OF A CERTAIN INTERSTATE NATURAL GAS PIPELINE BY EXEMPTING GENERATION SERVED BY THAT PIPELINE FROM REGULATION AS A PUBLIC UTILITY.
Whereas, there currently exists only one pipeline authorized to transport natural gas in interstate commerce; and
Whereas, because the existing pipeline traverses the western and central portion of the Piedmont region of North Carolina on a generally southwest to northeast axis, there are several areas in eastern North Carolina in which natural gas service presently is unavailable; and
Whereas, because of limits on the capacity of the existing interstate pipeline there also are limits on the availability of reliable natural gas service for industries in North Carolina that purchase natural gas delivered on the existing pipeline; and
Whereas, due to the locations of the termini of existing interstate pipelines outside of North Carolina, southeastern North Carolina is the region where the introduction of a new interstate pipeline is most likely to become economically feasible during the foreseeable future; and
Whereas, the introduction into the southeastern region of North Carolina of a second pipeline authorized to provide interstate transportation services for natural gas would provide substantial economic development opportunities to that region and would increase the speed at which gas services will become available to areas in that region which have no such services at present; and
Whereas, a second such pipeline also would make available reliable natural gas service to industries that are located or may locate within the southeastern region of the State; and
Whereas, the introduction of competition between the operators of two interstate pipelines serving North Carolina would result in lower costs to industrial consumers and reduce the risk of service interruptions, and accordingly would be desirable for industry and commerce throughout the whole of North Carolina; and
Whereas, before a second pipeline providing interstate transportation services for deliveries of natural gas into North Carolina can be built, it will be necessary to obtain certain approvals from the Federal Energy Regulatory Commission; and
Whereas, in order for such approvals to be obtained, it will be necessary to demonstrate sufficient commitments for natural gas service to justify an extension of an existing pipeline that presently terminates in Aiken, South Carolina, across the state of South Carolina, through the Counties of Robeson, Columbus, and Brunswick, North Carolina, to end at a point in the County of New Hanover, North Carolina; and
Whereas, the potential customers presently located along the proposed route of this extended interstate pipeline cannot commit to purchase a sufficient quantity of gas to presently justify the extension of the pipeline into North Carolina; and
Whereas, there would be sufficient demand to justify the extension of the pipeline into North Carolina if gas-fired facilities for the generation of electricity, thermal energy, or both, using in the aggregate not less than 100 million cubic feet of natural gas per day were located in one or more of the Counties of Robeson, Columbus, Brunswick, and New Hanover, and if such generation facilities committed to purchase gas transportation services from the extended pipeline; and
Whereas, the timely siting and establishment of such generation facilities and associated facilities for the transmission and delivery of the electric or thermal output of such facilities, or both, would be delayed or prevented if ownership or operation of such facilities, or the sales of the power or thermal output thereof, or both, would cause the owners, lessees, or operators of such facilities to be determined to be a "public utility" within the meaning of Chapter 62 of the General Statutes, or require certification or approval by the North Carolina Utilities Commission; and
Whereas, the proposed extension of the pipeline for natural gas along the proposed route would provide substantial economic benefits throughout southeastern North Carolina by facilitating the attraction of new industry and the expansion of the facilities of existing industries, fostering new employment, and increasing tax bases in that region and revenue taxes for the State as a whole; and
Whereas, the extension of the pipeline along the proposed route at this time could facilitate further extensions of the pipeline in the future into other counties in eastern North Carolina as the need and demand for such services in those areas justifies those extensions; Now, therefore,
The General Assembly of North Carolina enacts:
Section 1.  G.S. 62-3(23) is amended by adding a new sub-subdivision to read:
"i.	The term 'public utility' shall not include any person or persons owning, leasing, or operating equipment or facilities for producing, generating, transmitting, delivering, or furnishing electric power, thermal energy, or both, for compensation within the Counties of Robeson, Columbus, Brunswick, and New Hanover, nor the making of sales of the electric or thermal output thereof, or both, so long as (i) such generation is fired by natural gas as its primary fuel; (ii) the person or persons owning, leasing, or operating that equipment or facilities provide commitment documents which are filed for the purpose of obtaining necessary approvals from the Federal Energy Regulatory Commission for the extension of an interstate natural gas transportation pipeline through the Counties of Robeson, Columbus, and Brunswick to the County of New Hanover; and (iii) the natural gas which fires that generation is directly or indirectly delivered to those facilities through that pipeline."
Sec. 2.  G.S. 62-101(c) reads as rewritten:
"(c)	A certificate is not required for construction of the following lines:
(1)	A line designed to carry less than 161 kilovolts;
(2)	The replacement or expansion of an existing line with a similar line in substantially the same location, or the rebuilding, upgrading, modifying, modernizing, or reconstructing of an existing line for the purpose of increasing capacity or widening an existing right-of-way;
(3)	A transmission line over which the Federal Energy Regulatory Commission has licensing jurisdiction, if the Commission determines that agency has conducted a proceeding substantially equivalent to the proceeding required by this Article;
(4)	Any transmission line for which, before March 6, 1989, a public utility or other person has surveyed a proposed route and, based on that route, has acquired rights-of-way for it by voluntary conveyances or has filed condemnation proceedings for acquiring those rights-of-way which, together, involve twenty-five percent (25%) or more of the total length of the proposed route;
(5)	An electric membership corporation owned transmission line for which the construction or upgrading has had a proceeding conducted which the Commission determines is substantially equivalent to the proceeding required by this Article;
(6)	Any line owned by a municipality to be constructed wholly within the corporate limits of that municipality;
(7)	Any line owned by a person or persons exempt from public utility status under G.S. 62-3(23)i."
Sec. 3.  G.S. 62-110.1(g) reads as rewritten:
"(g)	The certification requirements of this section shall not apply  to persons who construct an electric generating facility primarily for that person's own use and not for the primary purpose of producing electricity, heat, or steam for sale to or for the public for compensation, or to persons exempt from public utility status under G.S. 62-3(23)i.; provided, however, that such persons shall, nevertheless, be required to report to the Utilities Commission the proposed construction of such a facility before beginning construction thereof."
Sec. 4.  This act is effective upon ratification.