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Budget request: FERC to decide soon on next steps for pipeline policy review

The Federal Energy Regulatory Commission will decide before October what steps to take to update its natural gas pipeline certification process, according to the agency's budget request for the fiscal year 2020.

In its annual budget request, FERC said it will determine sometime in the 2019 fiscal year that runs through September "what, if any, actions are appropriate" to revise its 1999 gas certificate policy after launching a review in April 2018.

The review, which FERC's late former Chairman Kevin McIntyre initiated, was aimed at reassessing the policy's applicability, efficiency and transparency, including with respect to projects' downstream greenhouse gas emissions. But McIntyre emphasized that the review would not necessarily result in policy changes.

The commission released its fiscal-year 2020 budget request and annual performance report March 18, a week after the Trump administration rolled out a summary of its budget proposal to the U.S. Congress for the upcoming fiscal year.

FERC requested total appropriations of $382.0 million for fiscal year 2020, up 3.3% from estimated actual appropriations of $369.9 million the prior year. FERC offsets the full cost of its operations through annual charges and filing fees paid by the industries it regulates, meaning the agency receives a net appropriation of zero.

The commission said its full funding needs to meet base operating requirements and the continuation of a modernization effort for its Washington, D.C., headquarters will total $386.5 million. FERC also asked to apply $4.5 million of prior-year unobligated budget authority to offset its fiscal-year 2020 funding requirements.

Despite proposing an overall increase to its budget, the agency wants to slash funding in the new fiscal year for its "environmental and program contracts" by 39.5% to $7.5 million and information technology expenditures by 21.2% to $48.1 million. At the same time, FERC requested a 48.7% increase in its building modernization funds to $22.9 million. But most of FERC's budget, or over two-thirds, goes to employee compensation.

The budget request provided updates and outlooks for key FERC priorities. The commission said it is evaluating comments on its grid resilience review launched in January 2018. FERC also expects to continue work "into [fiscal years] 2019 and 2020" on how to remove barriers to distributed energy resource aggregation; potential updates to the Public Utility Regulatory Policies Act, known as PURPA, a law requiring power companies to buy electricity from small qualifying renewable energy facilities; and a review of its return-on-equity policy for electric transmission projects.

Turning to natural gas, FERC said it expects the number of gas pipeline project applications to fall in fiscal years 2019 and 2020, even as demand for U.S. gas-fired electric generation and LNG exports remains high. The commission processed 15 applications for new LNG facilities or modifications to existing LNG facilities in fiscal year 2018. But FERC expects developers to file only three new LNG export terminal applications through fiscal year 2019, according to its budget request released March 18.

FERC Chairman Neil Chatterjee and lawmakers on Capitol Hill are pushing to get the agency more resources to process LNG applications amid a backlog of projects infrastructure applications. But FERC's desired number of full-time employees for fiscal year 2020 was 1,465, unchanged from the 2019 fiscal year.