FERC grants temporary certificate to Spire gas pipe, enabling winter operations

The US Federal Energy Regulatory Commission Dec. 3 granted an additional temporary certificate to Spire STL Pipeline, ending questions about whether the 65-mile, 400,000 Dt/d gas pipeline would be able to continue operating through the winter 2021-22 heating season.

After the US Court of Appeals for the District of Columbia Circuit in June vacated Spire's certificate authorization, FERC in September granted a 90-day certificate that was set to expire Dec. 13. FERC's new certificate will stay in effect until FERC acts in the case on remand in relation to Spire's long-term authorization.

In granting the new authorization, FERC concluded that an emergency exists, finding the record showed that "without a temporary certificate, Spire's customer, Spire Missouri, will experience a loss of gas supply potentially impacting hundreds of thousands of homes and business during the winter heating season."

Findings on conditions

FERC's Dec. 3 order required Spire to continue restoration along its right-of-way. But it declined to impose contested conditions sought by Environmental Defense Fund, such as placing new restrictions on Spire's rates to limit the pipeline's profits, or confining when Spire could operate to times when utility affiliate Spire Missouri could not obtain adequate capacity elsewhere.

The commission found the rate design sought by EDF was not consistent with FERC policy of using straight fixed variable ratemaking, and that FERC lacked jurisdiction to mandate conditions on how Spire Missouri meets its customers' needs.

Before arriving at the conclusion that an emergency existed, FERC found that adequate alternative firm transportation was not available for Spire Missouri to replace the pipeline capacity.

Even though Spire might be able to obtain about 180,000 Dt/d from Enable Mississippi River Transmission this winter, the upstream pipelines could not commit to delivering gas to MRT at the pressure needed, FERC said. It also found the record showed Spire Missouri could not build replacements for facilities it removed from service in time for the winter.

The extension was welcomed by Spire, which had been warning for months about risks of disruptions to St. Louis-area gas customers in the event of extended extreme cold, should the pipeline not be allowed to operate this winter.

"Spire STL Pipeline filed for this temporary emergency certificate to protect customers and communities in the St. Louis region from potential outages this winter, while providing the FERC with the necessary time to conduct a thorough review of the original certificate on remand from the DC Circuit court," Scott Smith, president of the Spire STL Pipeline, said in a statement.

The Environmental Defense Fund said in a statement that "the widely anticipated move allays fears stoked in a misleading and harmful public relations campaign by company affiliate Spire Missouri, which falsely suggested that utility customers could be left without gas heat this winter due to a ruling by a US court of appeals."

EDF Senior Director and Lead Counsel Natalie Karas said her group "has consistently told regulators that the pipeline should be allowed to operate to ensure reliable service."

Upcoming reviews

Looking ahead to FERC's upcoming review of whether it can remedy the longer-term certificate struck by the court, Karas argued the regulator "must protect customers from improper costs and protect the landowners and communities adversely impacted by the unlawful review and approval of the pipeline including the condemnation of private property."

In the June ruling in question, the DC Circuit found FERC did not adequately scrutinize the need for the pipeline and ignored evidence of self-dealing when it granted a Natural Gas Act certificate. It also found the regulator did not adequately weigh the project benefits against adverse effects.

In light of FERC's Dec. 3 action, Spire has withdrawn renewed efforts to secure a stay of the DC Circuit ruling from the US Supreme Court, although it is continuing to pursue its challenge of the DC Circuit ruling.

The company Dec. 3 filed a petition for writ of certiorari at the Supreme Court, raising the question of "whether remand without vacatur is the appropriate remedy where the record indicates that an agency's inadequately reasoned decision could be corrected on remand and vacatur of the decision could result in serious, and potentially life-threatening, disruptive consequences."