FERC readies to vote on Jordan Cove LNG, NYISO mitigation rules

Washington — The Federal Energy Regulatory Commission's packed agenda at its next monthly meeting includes votes on 11 orders related to natural gas projects, including a key decision on whether to authorize the Jordan Cove LNG project and Pacific Connector pipeline.

And on the heels of a contentious order on PJM Interconnection's capacity market, FERC also is poised to tackle similar issues in the New York Independent System Operator's footprint.

The commission late Thursday released its Sunshine Act notice listing items on the agenda for FERC's February 20 monthly meeting.

PENDING PROJECTS

If approved and ultimately financed and constructed, the Jordan Cove project planned for Coos County, Oregon, would provide an outlet for western Rockies and Canadian production struggling to find downstream demand, according to S&P Global Platts Analytics. It may face a difficult regulatory climate in Oregon, where state agencies have repeatedly raised concerns about the adequacy of the environmental review, as well as legal challenges from a range of parties.

The project has a design capacity of about 7.5 million mt/year in its first phase, and is proposed alongside the 229-mile, 1.2 Bcf/d Pacific Connector pipeline (CP17-494, CP17-495).

Keeping with its recent practice of acting on natural gas project certificate orders primarily at its open meetings, FERC also scheduled a vote on whether to authorize Natural Gas Company of America's Gulf Coast Southbound project, which would add compression in Texas to enable about 300,000 Dt/d of new capacity to serve Corpus Christi Liquefaction, the project's anchor shipper.

Tennessee Gas Pipeline also would get a vote on authorization of its 261 Upgrade Projects, which would add 72,400 Dt/d of firm gas transportation capacity in the Northeast through looping pipeline and compressor upgrades in Agawam, Massachusetts.

Cheniere Energy is up for a decision on whether it can build its Third Berth Expansion Project at Sabine Pass, allowing it to boost the number of cargoes at its Cameron, Louisiana, facility.

PennEast Pipeline could see a decision on developers' request for a two-year extension to their certificate authorization. That request, which cited permitting delays and litigation, has generated ample pushback from environmental groups and other litigants.

FERC also looks poised to continue in its drive toward issuing faster rehearing orders for gas projects. On tap appear to be decisions on rehearing for Annova LNG and Texas LNG.

BUYER-SIDE MITIGATION

On the power side, the commission is slated to act on dockets involving buyer-side mitigation used in NYISO's wholesale installed capacity market.

Among the issues teed up is the treatment of energy storage resources and certain demand-side resources referred to as special case resources. The New York Public Service Commission has complained that the buyer-side mitigation rules "interfere with the state's legitimate policy objectives" by making it difficult for those resources to clear the region's capacity auction.

Also at issue will be proposed renewable resource and self-supply exemptions from NYISO's buyer-side mitigation protocols as well as calls by the Electric Power Supply Association and Independent Power Producers of New York for a minimum offer price rule or other mechanism to address state subsidies and the retention of uneconomic resources.

The action will be closely watched to see if FERC adopts the same hard line it took against state-subsidized resources in PJM. FERC's action there has frustrated some states to the point of their considering exiting the capacity market. Of note, the New York PSC is mulling whether to take back resource adequacy from NYISO, partly out of concern that FERC policies could disrupt the state's clean energy goals.

OIL PIPELINE RATES

Separately, the commission is poised to vote on a petition from customers asking FERC to require liquids pipelines to report more financial information, and to decide on revisions to oil pipeline indexing policies.

FERC in October 2017 issued an advance notice of proposed rulemaking (RM17-1) to address concerns about the ability of some oil pipelines to obtain additional index rate increases despite reporting revenues that significantly exceed their costs.

Oil pipelines argued the proposal would increase litigation and discourage innovation.