[Federal Register Volume 63, Number 214 (Thursday, November 5, 1998)] [Notices] [Pages 59777-59778] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 98-29592] ----------------------------------------------------------------------- DEPARTMENT OF ENERGY Federal Energy Regulatory Commission [Docket No. OR99-2-000] Lakehead Pipe Line Company Limited Partnership; Notice of Offer of Settlement October 30, 1998. Take notice that pursuant to 18 CFR 385.602, Lakehead Pipe Line Company, Limited Partnership (Lakehead), a common carrier oil pipeline regulated by this Commission, on October 27, 1998 tendered for filing an Offer of Settlement. By this offer, Lakehead seeks Commission approval for a comprehensive settlement agreement (1998 Settlement Agreement), which was entered into on October 21, 1998 by Lakehead and the Canadian Association of Petroleum Producers (CAPP), the principal representative of the producers Lakehead serves. The 1998 Settlement Agreement is intended to govern the rate recovery by Lakehead of the costs of three projects for the expansion of Lakehead's capacity and the broadening of its capability to transport heavier crude oil. Its primary features are: (1) A cost-of-service based surcharge, for 15 years, on terms included as part of the settlement of Lakehead's most recent rate case, for recovery of costs associated with Lakehead's portion of the System Expansion Program Phase II (SEP II); (2) An agreed-upon flat-rate surcharge for 15 years for recovery of costs associated with Lakehead's portion of the so-called Terrace Expansion Project (Terrace); and (3) An increase in the existing heavy oil surcharge from 20 percent of the standard rate to as much as 22 percent to reflect a planned operational change permitting shippers to transport heavier grades of crude through the Lakehead system. In the case of the two expansion-related surcharges, the terms of those surcharges have been extensively negotiated between CAPP and Lakehead's Canadian affiliate Enbridge [[Page 59778]] Pipelines, Inc. (Enbridge),\1\ on behalf of itself and Lakehead. The resulting agreements have been formally approved by the National Energy Board of Canada (NEB), and the terms of the SEP II surcharge were included in the Lakehead rate settlement approved by this Commission on October 18, 1996. The proposed change to the heavy oil surcharge has also been agreed to by CAPP and the affected heavy oil producers, and has been approved in principle by the NEB. This change is conditional on CAPP giving notice to Enbridge and Lakehead of CAPP's intent to have the higher viscosity limit implemented, and on Lakehead's operations being altered to permit movement of much heavier crudes than could be accommodated in the past. --------------------------------------------------------------------------- \1\ Enbridge was formerly known as Interprovincial Pipe Line Inc. (IPL). The name was changed to Enbridge effective October 7, 1998. --------------------------------------------------------------------------- Lakehead states that its rates are currently governed by the 1996 FERC Settlement, which resolved Lakehead's most recent major rate proceeding before this Commission. Under the 1996 FERC Settlement, to the extent Lakehead undertakes system capacity expansions during the initial five-year period, the costs of such expansions can be recovered through an incremental surcharge to Lakehead's rates calculated in accordance with Appendix D to the 1996 FERC Settlement. The Commission will follow its Rule 602 procedures for processing this Offer of Settlement. Parties seeking to comment on any aspect of the proposed settlement are required to do so within 20 days of the date of the filing of this Offer of Settlement (Rule 602(f)(2), 18 CFR 385.602(f)(2)), on or before November 16, 1998. Reply comments are due November 27, 1998. David P. Boergers, Secretary. [FR Doc. 98-29592 Filed 11-4-98; 8:45 am] BILLING CODE 6717-01-M