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FERC approves Leach, Rayne XPress projects; 2 KMI pipes under rate investigation


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FERC approves Leach, Rayne XPress projects; 2 KMI pipes under rate investigation

FERC approves Columbia's Leach, Rayne XPress pipeline expansions

FERC approved a pair of major Columbia Pipeline Group Inc. projects to transport Appalachian natural gas supplies to Midwest and Gulf Coast markets.

A Jan. 19 certificate order granted authorization for the Leach XPress and Rayne XPress projects. Columbia Gas Transmission LLC's approximately $1.52 billion Leach XPress project would provide over 1.5 million Dth/d of firm transportation service. Columbia Gulf Transmission LLC's $173.7 million Rayne XPress expansion project will add compression to create an additional 621,000 Dth/d of north-to-south firm transportation capacity on its system. The pipeline companies are part of the Columbia Pipeline Group, a unit of TransCanada Corp.

FERC opens rate investigations into 2 Kinder Morgan gas pipelines

FERC will investigate the natural gas transportation rates charged by Kinder Morgan Inc. gas pipeline companies Natural Gas Pipeline Co. of America LLC and Wyoming Interstate Co. LLC in 2014 and 2015.

The commission plans to use its authority under Section 5 of the Natural Gas Act to see whether the two interstate pipelines, also known as NGPL and WIC, are "substantially over-recovering their costs, resulting in unjust and unreasonable rates," according to a Jan. 19 statement. FERC introduced draft orders to initiate the investigations at its monthly meeting the same day.

FERC directed the companies to file a cost and revenue study for the latest 12-month period within 75 days of the commission's orders on the investigations.

FERC rate decision could hurt all pipe expansions, Spectra unit says

FERC has made a mistake that could favor new-build natural gas transportation projects at the expense of pipeline expansions, Spectra Energy Corp's Texas Eastern Transmission LP said in asking FERC to rehear part of an approval order that covered usage charges for the Access South, Adair Southwest and Lebanon Extension projects.

"Adding system costs, as the December 21 order does, to an expansion project already subject to incremental pricing ultimately will hinder development of needed natural gas infrastructure by effectively increasing the cost of bringing such infrastructure to the market," Texas Eastern wrote.

Texas Eastern said FERC erred by requiring the pipeline company to establish a usage rate for each of the projects that was equal to the system usage rate. The company said the commission had in effect required that a portion of each project be rolled into the systemwide cost of service, which burdened the projects with added costs unrelated to their costs of service. Texas Eastern said the commission's reasoning, that it is appropriate to use the system charge when an incremental charge for a pipeline expansion is lower than the system charge, was not an adequate explanation. The company also said the order defied commission policy that requires expansion shippers to pay the full cost of the new transportation capacity.

FERC pushes back PennEast review schedule again

FERC again delayed its environmental review of PennEast Pipeline Company LLC's 1.1-MMDth/d Mid-Atlantic natural gas pipeline project, saying the process, pushed back a couple of times already, would take an additional seven weeks.

Some energy industry analysts have expressed concern with the delays, but PennEast has said the extensions are normal with a large pipeline project. Another delay certainly looks better to the developer than a whole new environmental review, which the Sierra Club requested in December 2016. As with most pipeline projects, the PennEast permit application has attracted controversy, with loud voices for and against.

Spectra gets go-ahead to begin building $442M group of gas pipe projects

FERC gave Texas Eastern Transmission LP the green light to begin constructing three natural gas projects providing 622,000 Dth/d of supply to Midwest and Southeastern markets from the Appalachian Basin.

A Jan. 19 FERC letter informed the company it can start building part of the Access South, Adair Southwest and Lebanon Extension projects. The Spectra Energy Partners LP subsidiary's projects, totaling $442 million, are intended to provide bidirectional flow capability on Texas Eastern's mainline system from Pennsylvania to markets in Ohio, Kentucky and Mississippi.

FERC denies environmental groups' attempt to stymie Dominion Pa.-Va. gas project

FERC denied a request by environmental groups to rehear its authorization of Dominion Transmission Inc.'s 155,000-Dth/d Leidy South gas transmission project between Pennsylvania and Virginia.

The Jan. 17 order will allow the Leidy South project to proceed, as the commission determined that there was no further need to analyze the project's environmental impacts in the region.

The Allegheny Defense Project, Heartwood, Wild Virginia, the FreshWater Accountability Project and the Ohio Valley Environmental Coalition filed their request to rehear the project Sept. 28, 2016, claiming that FERC violated the National Environmental Policy Act. The groups requested that FERC conduct a programmatic environmental impact statement for natural gas projects in the region.

Oil pipelines worry FERC rate proposal would hurt revenue, spur lawsuits

A group representing oil pipelines said a FERC proposal to update regulations that have governed them for the last two decades would damage a rate indexing system that was designed to make the work of government and industry more efficient.

FERC regulates oil pipeline rates under the Interstate Commerce Act, supplemented by the Energy Policy Act of 1992, or EPAct, which required the commission to establish a simple ratemaking methodology that still ensures that rates are just and reasonable. In comments submitted Jan. 19, the Association of Oil Pipe Lines said proposed changes to this system would sharply limit the use of the rate index in situations where pipeline revenues diverge from costs, among other things, and would soon lead to increased litigation between pipelines and customers.