Thursday, January 24, 2019

FERC Whipsawed on Pipeline Policy in House Hearing

By Rich Heidorn Jr.

WASHINGTON — Congress will be watching FERC’s review of its policy on licensing natural gas pipelines very closely if the commission’s appearance before the House Energy Subcommittee on Tuesday is any indication.

FERC natural gas pipelines

Congress will be watching FERC’s review of its policy on licensing natural gas pipelines very closely. | © RTO Insider

Any changes FERC makes are unlikely to please all members, however.

At a hearing attended by all five FERC commissioners, both Republican and Democratic representatives complained that the commission has been too willing to approve pipeline projects and insensitive to landowners in their paths. Others, however, said the commission must speed up its approval process.

FERC natural gas pipelines

FERC Commissioners left to right: McIntyre, LaFleur, Chatterjee and Powelson | © RTO Insider

Energy and Commerce Committee Chairman Greg Walden (R-Ore.) said he hopes the commission’s review of its 1999 policy statement on certifying new interstate pipelines, announced in December, will “result in more efficient and timely decisions.” (See FERC to Review Gas Pipeline Approval Process.) FERC Chairman Kevin McIntyre said the commission will outline its plans for the review at Thursday’s open meeting (PL18-1).

Walden cited reports that New England relied on two LNG shipments from Russia to get through the winter, fuming: “While cross-border trade with our neighbors in Canada and Mexico may be a win-win, we should never have to be reliant on the Russians for imports again.”

FERC natural gas pipelines

Pallone (D-N.J.) | © RTO Insider

Speaking next, Rep. Frank Pallone (D-N.J.), the committee’s ranking member, said that he is concerned that ratepayers will be billed for unneeded projects and that landowners have no way to fight them. He called on the commission to conduct regional reviews of pipeline needs rather than evaluating each project individually.

Rep. Leonard Lance (R-N.J.), who is not a member of the subcommittee, attended the hearing nonetheless to tell the commission of his complaints over its approval in January of the PennEast pipeline project in Pennsylvania and New Jersey. The New Jersey attorney general went to court last month to prevent the project developer from condemning more than 20 properties acquired under open-space and farmland preservation programs.

Lance also questioned whether FERC was conducting “robust economic analysis” in using contracts with pipeline affiliates as evidence of a project’s need.

“It’s my considered judgment that this [project] is not in the best interests of the United States and certainly not in the best interests of New Jersey,” Lance said.

FERC natural gas pipelines

Griffith (R-Va.) | © RTO Insider

Rep. Morgan Griffith (R-Va.) said “the frustration level in Virginia is so high” over FERC’s pipeline reviews that he has teamed up with Democratic Sen. Tim Kaine (D-Va.) on legislation he said would increase the transparency of FERC’s licensing process (H.R. 2893, S. 1314). “Tim Kaine and I don’t generally agree,” he noted.

Griffith complained that surveyors for a pipeline appeared unannounced in his district recently and said the commission had rejected his request for additional public hearings to make travel to the sessions less burdensome for his constituents. He suggested putting two or more pipelines into the same corridor to minimize impacts on landowners. “FERC can do a better job,” he said.

LNG Exports

Rep. Pete Olson (R-Texas) said some Gulf Coast LNG projects have fallen behind schedule because of delays in receiving FERC approvals. “I’ve heard rumors that FERC has only six to eight employees [responsible] for approving these … permits. I’ve heard you actually approached the [Department of Energy] for new [employees] to help out with the backlog of approving LNG permits,” he said. “Is that true?”

McIntyre did not answer the LNG staffing question but acknowledged the commission is planning to add staff to the Office of Energy Projects to process LNG and pipeline applications.

“It’s consuming an enormous amount of attention and manpower within the agency,” he said. “If there’s any suggestion that we are somehow not giving it our full effort right now, I can assure you that is not the case at all.”

The pipeline review was just one of the issues the committee addressed during the three-hour hearing, which Walden said was the first with the full commission since 2015. Also discussed were the commission’s grid resilience inquiry, the financial struggles of coal and nuclear generation, the Public Utility Regulatory Policies Act, cybersecurity, and last week’s technical conference on distributed energy resources. (See related story, Ready to Act on DERs, FERC Tells Congress.)