FERC okays gas pipeline to serve Calpine’s Garrison power project

Eastern Shore Natural Gas Co. was approved Nov. 27 by the Federal Energy Regulatory Commission for a certificate on a gas pipeline that will serve Calpine’s (NYSE: CPN) planned Garrison power project in Delaware.

Eastern Shore had filed an application under section 7(c) of the Natural Gas Act seeking authorization to construct and operate the White Oak Lateral Project located in Kent County, Del. Eastern Shore said the proposed project will enable it to provide 55,200 dekatherms per day (Dth per day) of firm transportation service for Calpine Energy Services LP.

Eastern Shore is a natural gas company as defined under the NGA, engaged primarily in the business of transporting natural gas in interstate commerce. It is a wholly owned subsidiary of Chesapeake Utilities Corp.

In April 2011, Garrison Energy Center LLC (GEC) and Eastern Shore began discussions regarding GEC’s proposal to develop the Garrison Energy Center, a proposed 309-MW combined cycle power plant, and their need to secure natural gas transportation service. The Garrison Energy Center will be developed by GEC and will be situated within the Garrison Oak Technical Park.

In April 2013, Eastern Shore and Calpine executed a binding Precedent Agreement which contemplates that they will execute a long-term service agreement under Eastern Shore’s new Rate Schedule Delivery Lateral Firm Transportation (DLFT). Also during negotiations, GEC and Eastern Shore obtained a $2.5m Infrastructure Grant from the state of Delaware to partially offset the cost of constructing the White Oak Lateral Project.

Eastern Shore conducted a binding open season in January 2013 seeking additional participation for the project. Garrison Energy Center was the only shipper that elected to subscribe for 55,200 Dth per day of transportation service, equal to the entire design capacity of the project. Thus, the proposed White Oak Lateral Project is fully subscribed.  

The White Oak Lateral Project will consist of approximately 5.5 miles of 16-inch diameter pipeline lateral, one mainline valve assembly and a new delivery point meter and regulation station. It will commence at the interconnection with Eastern Shore’s mainline system near an existing gate station located on Fork Branch Road in Dover, Del., and terminates at the site of the future Garrison Energy Center located in the Garrison Oak Technical Park in the City of Dover. The total estimated cost of the pipeline project is $11.2m.

Calpine in June announced that it had broken ground on the Garrison Energy Center project. Construction is to be completed by the second quarter of 2015. Calpine has indicated that this first 309 MW is an initial phase for Garrison, with a 309-MW second phase possible.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.