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Natural gas

Southern Natural Gas Company Submits Response to Federal Energy Regulatory Commission Data Request

Strategic Insights

— 1 min read

The Southern Natural Gas Company and Elba Express Company have responded to a data request from the Office of Energy Projects (OEP) regarding the construction of the South System Expansion 4 Project. The project, which entails the construction of pipeline facilities in Mississippi, Alabama, and Georgia, has sparked interest from regulatory bodies. The companies have submitted responses to the OEP's data request, providing justifications for the estimated capitalized Allowance for Funds Used During Construction (AFUDC) and addressing concerns regarding the accrual of AFUDC during construction interruptions.

Key Takeaways:

  • The Southern Natural Gas Company and Elba Express Company have submitted a response to the Office of Energy Projects (OEP) regarding the South System Expansion 4 Project, a pipeline facility construction project in Mississippi, Alabama, and Georgia.
  • The companies justified the accrual of AFUDC during the construction period, arguing that there was no interruption in construction activities but rather payments were being delivered at agreed-upon intervals for the construction of expansion facilities.
  • The response also stated that the inclusion of progress payment activities in the calculation of AFUDC was supported by Accounting Release AR-5, given that the companies had incurred capital expenditures and activities were necessary to get the construction project ready for its intended use.
  • The companies will provide an AFUDC schedule supporting the actual total project cost upon completion of the project, showing continuous cash expenditures during the construction period.

Statistics:

  • Estimated capitalized Allowance for Funds Used During Construction (AFUDC): $16,775,233
  • Project duration: April 2025 to November 2026
  • Construction interruption period: April 2025 to November 2026
  • Total project cost: To be determined
  • Number of pipeline facilities: Multiple facilities in Mississippi, Alabama, and Georgia

Sources:

  • Southern Natural Gas Company, L.L.C. and Elba Express Company, L.L.C. South System Expansion 4 Project Docket No. CP25-517-000 Data Request Dated August 14, 2025
  • Accounting Release AR-5, Capitalization of Allowance for Funds Used During Construction
  • Elibrary.ferc.gov (accessed August 25, 2025)

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