Friday, May 25, 2018

FERC OKs Pipelines, Delegation Order Before Losing Quorum

Bay Opines on Natural Gas Development, MOPR on Exit

By William Opalka

Preparing for the loss of its quorum, FERC last week issued an order delegating additional authority to staff and approved two massive natural gas pipelines that could have languished for months after former Chairman Norman Bay’s resignation.

The commission granted a certificate of public convenience and necessity (CPCN) on Thursday for the 510-mile Rover Pipeline, which would transport 3.25 million dekatherms/day from eastern Ohio to southern Michigan (CP15-93). On Friday, the commission approved a CPCN for Transcontinental Gas Pipe Line Co.’s Atlantic Sunrise pipeline, which would transport 1.7 million dekatherms/day from Pennsylvania to South Carolina (CP15-138).

ferc pipelines quorum

The approval of Rover prevented a yearlong delay in construction. Tree-clearing on the project is prohibited between March 31 and Oct. 1 in Michigan, Ohio and Pennsylvania, and between Nov. 15 and March 31 in West Virginia, to protect the endangered Northern Long-eared bat, according to its environmental impact statement.

The commission also approved two smaller pipeline projects late last week:

  • A 99-mile pipeline proposed by National Fuel Gas Supply and Empire Pipeline to connect McKean County in north-central Pennsylvania to an existing main line in Erie County, N.Y. The project includes an interconnection to the TransCanada system at the Canadian border west of Buffalo. Empire will be able to transport 350,000 dekatherms/day into Ontario (CP15-115).
  • A 12.9-mile pipeline loop in Wayne and Pike counties in eastern Pennsylvania to serve Tennessee Gas Pipeline’s mainline that runs into New England (CP16-4).

The orders issued by FERC last week, Bay noted, added “more than several billion cubic feet of new gas pipeline capacity.” In all, the commission issued more than 60 orders last week, including issuances on capacity market rules in MISO, NYISO and ISO-NE, financial transmission rights in PJM, the Energy Imbalance Market run by CAISO and SPP’s measurement of reactive power.

In at least two of the orders, Bay issued statements recommending changes in FERC policies, including one criticizing the minimum offer price rule in capacity markets. (See related stories, Bay Blasts MOPR on Way Out the Door and Bay Calls for Review of Marcellus, Utica Shale Development.)

Loss of Quorum Sparks Fears

Bay resigned effective Feb. 3 after President Trump named Commissioner Cheryl LaFleur as acting chairman.

There were already two vacancies on the commission, so Bay’s departure left FERC with only LaFleur and Commissioner Colette Honorable — one member short of the quorum needed to resolve contested cases, including challenges to infrastructure projects. (See Backlog, Delays Feared as FERC Loses Quorum and LaFleur Reinstates Morenoff as FERC General Counsel.)

A coalition of 14 energy trade associations representing the oil and gas industry, utilities, hydropower and nuclear interests wrote to Trump on Thursday urging him to fill the vacancies. “The absence of a quorum will leave the agency unable to tackle much of its important work promoting energy infrastructure for the benefit of U.S. energy consumers,” the letter said.

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On Wednesday, U.S. Sens. Ed Markey and Elizabeth Warren, both Democrats from Massachusetts, expressed concern that rehearing requests for the recently approved Atlantic Bridge project would go unheeded. (See Atlantic Bridge Project Approved by FERC.) “We request that FERC immediately rescind the order authorizing the Atlantic Bridge pipeline project until such time as the agency has a newly constituted quorum in place that will allow it to hear an appeal of this project,” they wrote.

New Delegation Order

The commission on Friday delegated additional authority to staff to keep some cases moving (AD17-10).

Under the order, effective Feb. 4, Office of Energy Market Regulation (OEMR) Director Jamie Simler or her designee can:

  • Accept and suspend rate filings, and make them effective subject to refund and further order of the commission, or set them for hearing and settlement judge procedures. For initial rates or rate decreases submitted under Section 205 of the Federal Power Act, for which suspension and refund protection are unavailable, FERC staff has authority under FPA Section 206 to institute proceedings to protect customers’ interests.
  • Take “appropriate action” on uncontested filings seeking waivers of the terms and conditions of tariffs, rate schedules and service agreements (including waivers related to capacity release and capacity market rules) under the FPA, the Natural Gas Act and the Interstate Commerce Act.
  • Accept settlements not contested by any party or participant, including commission trial staff.

FERC staff also can extend the time for action on matters when permitted by statute. “By issuing the order today, the commission intends that to ensure that FERC staff has authority to prevent such filings from taking effect by operation of law during the no-quorum period,” the commission said in a statement.

The commission also said it would be guided by the 2012 Anti-Deficiency Act, which allows work to continue during a lapse in appropriations on activities the suspension of which would “imminently threaten the safety of human life or the protection of property.”

That ensures commission staff will continue inspecting and responding to incidents at LNG facilities and jurisdictional hydropower projects, FERC said.

All pre-existing delegations of authority to staff will remain in effect, FERC said. The temporary order will remain in effect until after the confirmation of a third member restores the quorum.

Because FERC commissioners are subject to Senate confirmation, that may not happen for months. Trump, focused in his first few weeks on filling out his cabinet and his Supreme Court pick, has not named any FERC candidates.

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