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FERC to decide on PennEast and Columbia pipelines, Rio Grande LNG rehearing


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FERC to decide on PennEast and Columbia pipelines, Rio Grande LNG rehearing

The Federal Energy Regulatory Commission is poised to vote on high-profile natural gas matters, including requests that it should weigh in on litigation that has stalled the PennEast Pipeline Co. LLC natural gas transportation project and that could affect gas pipeline siting.

In other matters, the 66-mile, 275-MMcf/d Buckeye XPress pipeline from Columbia Gas Transmission LLC could finally see an authorizing decision. The pipeline project lingered even as FERC cleared a group of project decisions at the end of 2019.

FERC has also prepared to vote — much faster than customary — on requests to rehear its decision authorizing NextDecade Corp.'s Rio Grande LNG project and the Rio Bravo pipeline project. The pipeline and LNG project items, as well as electric power market matters, were listed in the Sunshine Act notice for the Jan. 23 commission meeting.

PennEast in October 2019 asked FERC for help to overcome an unfavorable ruling by the U.S. Appeals Court for the 3rd Circuit that found state sovereign immunity prevented the developer of the 116-mile, 1.1-Bcf/d PennEast project from pulling states into federal court for condemnation proceedings. The case is closely watched because it could unsettle a long-established process for taking land for gas pipeline routes, according to both the 3rd Circuit ruling and pipeline companies. (FERC docket RP20-41)

As PennEast pursued rehearing at the 3rd Circuit in October 2019, the company asked FERC for an expedited declaratory order to provide its "authoritative interpretation" of the Natural Gas Act's eminent domain authority.

FERC did not immediately bite on that request, and the 3rd Circuit denied PennEast's rehearing request, but the pipeline joint venture has announced plans for a U.S. Supreme Court challenge. The FERC decision on Jan. 23 should shed light on the commission's willingness to weigh in further.

Quick turnover decision

Just a month after FERC approved the Rio Grande LNG project, planned for the Brownsville Ship Channel in Texas, and the related Rio Bravo pipeline, the commission put a decision on rehearing requests on the meeting agenda. The LNG project is being challenged by a coalition of groups led by the Sierra Club, as well as by an individual who is a member of the Rio Grande Valley community group Save RGV From LNG. (FERC dockets CP16-454, CP16-455)

While it would be unusual for FERC to act on a lengthy rehearing request so quickly, the agency is under pressure in court over its practice of routinely issuing tolling orders that extend the time it has to make decisions on rehearing.

The full U.S. Court of Appeals for the District of Columbia has agreed to reconsider a ruling by a three-judge panel on whether FERC's tolling orders deprive property owners of a fair process in gas pipeline cases. While the panel upheld FERC in its orders approving the Atlantic Sunrise project, Judge Patricia Millett, in a concurring opinion, slammed FERC's approach as putting landowners in administrative limbo while construction is allowed to proceed.

With that case advancing, FERC may be seeking to demonstrate it is acting more quickly. Commission Chairman Neil Chatterjee said in September that he had directed FERC staff to prioritize decisions on rehearing orders within 30 days on the "narrow set of rehearing requests involving landowner rights."

Finally, FERC is poised to act on the Buckeye XPress project, which entails the replacement of 60.8 miles of 20- and 24-inch-diameter pipeline with about 66.1 miles of new 36-inch-diameter pipeline. The primary purpose, according to Columbia Gas parent TC Energy Corp., is to replace certain portions of Columbia Gas' R-System to ensure continued safe and reliable transportation service.

In October 2019, Columbia asked FERC for a prompt decision, noting that it already faced a compressed time frame to complete the project. An environmental assessment for the project was issued back in May 2019 with a finding that the project would not constitute a major federal action significantly affecting the environment.

PJM offer cap

Among power dockets teed up for action on Jan. 23 are a pending complaint to lower the default offer cap in PJM Interconnection's capacity market, and New York ISO's proposal to boost distributed energy resource participation in its markets.

PJM's independent market monitor last year filed the complaint asserting that the offer caps were overstated and that an update was needed to the assumptions used to calculate those caps. Under the monitor's proposed revisions, the default offer cap in the capacity market would be reduced by a factor of six to around $36/MW-day, putting the cap below the last auction's average offer price. (FERC docket EL19-47)

NYISO's proposal is intended to help distributed energy resources participate in its markets, even if those resources have commitments to the local distribution system, would otherwise be too small, or would fail to meet other physical and operational characteristics currently required for full market participation. NYISO's plan was twice flagged by FERC as "deficient" on certain details, requiring subsequent updates to the proposal. (FERC docket ER19-2276)

Maya Weber and Jasmin Melvin are reporters with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.