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US FERC to act on backstop transmission siting, long-running gas pipeline disputes


Pipe affiliate rates get attention at year-end meeting

Spire certificate redo, Transco expansion on tap

  • Author
  • Maya Weber    Zack Hale
  • Editor
  • Valarie Jackson
  • Commodity
  • Electric Power Energy Transition Natural Gas

The US Federal Energy Regulatory Commission is poised to act on transmission siting, key pipeline rate disputes, and two important natural gas pipeline certificates at its last meeting of the year Dec. 15, potentially Democrat Richard Glick's final session as chairman.

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Glick's nomination to serve a second five-year term has been stalled by US Senator Joe Manchin, Democrat-West Virginia, who announced in November that he is not "not comfortable" holding a confirmation hearing for US President Joe Biden's pick to continue helming the commission. Glick must leave FERC if he is not confirmed before the 117th Congress adjourns.

As FERC chairman, Glick has launched multiple important rulemakings designed to speed the expansion of the US electric transmission system. Momentum in those proceedings could slow next year with FERC evenly divided along a 2-2 partisan split.

Glick has sought buy-in from state utility regulators who play a central role in the siting and permitting of power lines needed to accommodate more renewable energy. Meanwhile, the US Congress clarified in the 2021 Infrastructure Investment and Jobs Act that FERC has backstop siting authority when states either fail to act on or deny applications for transmission projects sited in national-interest corridors designated by the US Department of Energy.

The legal status of FERC's backstop siting authority on transmission has remained in limbo since the US Court of Appeals for the 4th Circuit ruled in 2009 that the commission read too much into its authority granted under the Energy Policy Act of 2005.

Glick has stressed that FERC's members do not want to use the commission's backstop siting authority if that can be avoided. Nevertheless, the commission listed what appears to be a proposed update (RM22-7) to its backstop siting regulations as the first item on its Dec. 15 meeting agenda. The agenda notice indicates that the regulations would apply to developers who petition FERC to exercise its backstop siting authority, a step that no party has taken since the 4th Circuit ruling.

FERC is also poised to act on a complaint (EL22-34) filed by the Office of Ohio Consumers' Counsel against efforts by the American Electric Power Service, American Transmission Systems, and Duke Energy Ohio to receive a 50-basis point return on equity for participating in a FERC-jurisdictional regional transmission organization.

To the dismay of investor-owned utilities, FERC is considering whether to eliminate the adder after three years. Glick has argued that the benefits of participating in regional wholesale power markets are clear, thereby undermining the case for an ongoing rate incentive.

Gas decisions on tap

On the natural gas side of its agenda, FERC will decide whether and how to revamp its authorization for the Spire STL Gas Pipeline, after an appeals court in 2021 found FERC had failed to adequately scrutinize the reliance on an affiliate contract to demonstrate need for the natural gas project.

FERC's new action (CP17-40) could shed light on how the commission will test the need for projects that rely solely on affiliate contracts, but it comes in an unusual situation in which the pipeline has been operating for several years.

While FERC has been mulling its answer to the court, the 65-mile, 400,000 Dt/d pipeline has continued to supply the St. Louis, Missouri, area under a temporary certificate FERC issued last year.

Transcontinental Gas Pipe Line's 829 MMcf/d Regional Energy Access Expansion (CP21-94) also comes up for a vote. If approved, the expansion project would move gas from the Marcellus Shale in northern Pennsylvania to markets in the Northeast.

Like multiple Northeast projects, it has faced a flood of opposition in the FERC dockets from environmental groups.

The project entails about 36 miles of pipeline in Pennsylvania, as well as modification to compressor stations in New Jersey and Pennsylvania.

Left off of the agenda for what could be Glick's last meeting are policies governing FERC's gas pipeline project reviews, as well as how it considers greenhouse emissions.

Action on those policies looks likely to spill over into the New Year, when FERC likely faces a 2-2 split.

But several pipeline rate matters face votes Dec. 15, including a new policy addressing service for affiliated companies on oil pipelines.

That comes as FERC also will act on a long-idling rehearing request with implications for affiliate rates: Magellan sought clarification or rehearing back in 2017, after FERC found that Magellan's proposal to establish a marketing affiliate to ship oil would violate the Interstate Commerce Act if the price the affiliate paid was too low to cover the pipeline's filed tariff rate and the pipeline subsidized those losses (OR17-2).

Finally, FERC is poised to act on Panhandle Eastern Pipe Line rates, following up on a January 2019 Section 5 rate investigation that was consolidated with the company's own Natural Gas Act Section 4 proceeding. An administrative law judge released an initial decision back in 2021, and FERC has been under pressure to act from federal lawmakers, as shippers faced higher rates going into effect (RP19-78, RP19-1523).