APGA Weekly Update November 3, 2016

11-03-2016 13:04

APGA Supports Clarksville Challenge to FERC Order

On November 1, APGA and the American Public Power Association (APPA) jointly filed an Amicus Brief in
support of a challenge by the City of Clarksville, Tenn., to a 2014 order in which the Federal Energy
Regulatory Commission (FERC) ruled that the city would be subject to Natural Gas Act (NGA) jurisdiction
for a sale of gas to another system that took place entirely in Tennessee. The sale was to the city of
Guthrie, Ky., in Tennessee. Guthrie then transported the gas across the Tennessee-Kentucky border for
use in Guthrie’s distribution system. Clarksville argued that the ruling of the prior order was
inconsistent with numerous FERC precedents over the years in which FERC ruled that a municipality that
sold or transported gas entirely within its state of origin was not subject to NGA jurisdiction. FERC did
not dispute its numerous precedents but found them “overly expansive” if it would allow a municipality
to “avoid NGA jurisdiction over the transportation and sale of gas for consumption in other states,
because such an interpretation would create a regulatory gap.” FERC essentially ruled that it needed to
extend its jurisdiction over the sale to fill a regulatory gap because the state of Tennessee could not
regulate the transportation and sale of any gas that eventually crossed state lines. This order appears to
be another step in FERC’s efforts to regulate municipal transactions which, in FERC’s judgment, are in
interstate commerce. The FERC ruling over Clarksville raises the specter that the agency will seek to
extend its regulation to other municipal transactions whenever it determines that it is part of the flow of
gas in interstate commerce.

In the brief, APGA and APPA state that Congress explicitly excluded municipalities from FERC’s
jurisdiction under the Natural Gas Act and Federal Power Act and urge the court to uphold the municipal
exemption by vacating and remanding the FERC order. The brief goes on to communicate that
“Municipally owned gas systems have been completely justified to rely upon their status as
municipalities to exempt them from FERC jurisdiction,” and that FERC’s departure from this critical
precedent was arbitrary and capricious. The brief also states that “FERC’s holding that Clarksville’s
wholesale sales and transportation services are FERC jurisdictional has broad implications for the entire
municipal gas community.”

Clarksville filed its Appellant/Petitioner Brief on October 25. A copy of that brief, as well as the Amicus
Brief filed by APGA and APPA is available on the APGA website at www.apga.org. For questions on this
article, please contact Dave Schryver of APGA staff by phone at 202-464-274 or by email at
dschryver@apga.org.

APGA Urges Administration to Finalize Leasing Plan without Removing Areas from Potential
Production

On November 3, APGA joined over 100 entities from nearly all sectors of the U.S. economy urging
President Obama to finalize the 2017-2022 Outer Continental Shelf (OCS) leasing plan without removing
any areas from potential production.

The Bureau of Ocean Energy Management is required by law to develop five-year leasing plans for oil
and gas production on the OCS off the coast of the U.S. A Supreme Court case many years ago
established that the OCS is the property of the federal government, meaning that a federal agency must
administer its development.

The 2017-2022 leasing plan has attracted significant attention from environmental groups that oppose
production in certain areas, such as the Beaufort and Chukchi Seas in Alaska and other locations. They
have exerted pressure on the Administration to block production in these areas.

To counter these anti-production groups, the letter argues that domestic production is necessary for the
U.S. economy and security and points to the President’s 2015 statement, “I would rather us – with all
the safeguards and standards that we have – be producing our oil and gas, rather than importing it,
which is bad for our people, but is also potentially purchased from places that have much lower
environmental standards than we do” as evidence of the President’s commitment to domestic
production and the fact that the U.S. has superior environmental and safety standards.

It is unclear if the Administration will remove additional areas from production from the final plan, but it
is widely expected that the finalized plan will be released this month.

For questions on this article, please contact Scott Morrison of APGA staff by phone at 202-464-2742 or
by email at smorrison@apga.org.

Federal Highway Administration Designates Alternative Fuel Corridors

The Federal Highway Administration (FHWA) announced on November 3 that it designated the first
Alternative Fuel Corridors, which is the first step in the development of a national network of alternative
fueling and charging infrastructure along national highway system corridors.

The Alternative Fuel Corridors is an APGA-supported concept that was developed several years ago by a
coalition of alternative fuel vehicle advocates. The purpose is to incent the development of alternative
fuel vehicle infrastructure by directing the federal government to play a coordinating role among a wide
variety of stakeholders. The concept was finally adopted by Congress in the Fixing America’s Surface
Transportation (FAST) Act, which provided funding for America’s surface transportation programs and
was signed into law by President Obama on December 4, 2015.

The FHWA will support the expansion of the network through a process that:
 Provides the initial opportunity for a formal corridor designation now and in the future on a
rolling basis, without a cap on the number of corridors;
 Ensures that corridor designations are selected based on criteria that promote the "build out" of
a national network;
 Develops national signage and branding to help catalyze applicant and public interest;
 Encourages multi-State and regional cooperation and collaboration; and,
 Brings together a consortium of stakeholders including state agencies, utilities, alternative fuel
providers, and car manufacturers to promote and advance alternative fuel corridor designations
in conjunction with the Department of Energy.
In addition, the FHWA has a website at www.fhwa.dot.gov/environment/alternative_fuel_corridors/,
which includes a variety of resources including maps that allow users to view existing and pending
corridors by alternative fuel type whether natural gas, propane, or electric vehicles. APGA will keep
members apprised of further developments with the Alternative Fuel Corridors.
For questions on this article, please contact Scott Morrison of APGA staff by phone at 202-464-2742 or
by email at smorrison@apga.org.

ICC Voting Begins November 8

Over the last several months, APGA has been discussing the importance of becoming involved in the
International Code Council (ICC) code development process. Many of APGA’s members have joined the
ICC as a governmental member. As a governmental member, systems have the ability to vote on final
actions. These actions are how the next iteration of ICC codes is determined. For the 2018 International
Energy Conservation Code (IECC), electronic voting will begin November 8 and will stay open until
November 21.

APGA will hold a webinar to help members who are ICC governmental members with registered voting
representatives cast their votes. Jason Stanek will be walking everyone through the voting process.
The webinar is scheduled for November 16 from 1:00 p.m. to 2:00 p.m. EST. There is no cost for the
webinar. In addition to the webinar, we are also developing a voting guide that will identify proposals,
detail their impact and list our position on the proposal.

Different advocacy groups are beginning to rally their supporters. Recently, the American Council for an
Energy-Efficient Economy (ACEEE) has begun to encourage state affiliates and like-minded code officials
to get involved. In this code cycle, the direct-use of natural gas may face multiple proposals that could
try to eliminate or severely limit the use of natural gas in homes.

The basic structure of the ICC code development is a two-tiered process. The first part of the code
development process allows for a wide range of proposals that are accepted, debated and eventually
voted on by both government and corporate members for approval of adoption. Because historically
these votes have had a low voter turnout, a recommendation of a final standard has often been made
based on very narrow margins. Participation by APGA members would have an immediate impact on
what codes are allowed to proceed to the final adoption vote. As an example, recent votes to augment
the International Fuel Gas Code standards were decided on a margin of less than five votes in some
cases.

Please make participation in the ICC’s model code development process a top priority every year. For
questions on this article, please contact Dan Lapato of APGA staff by phone at 202-464-2742 or by email
at dlapato@apga.org.

APGA and AGA Comment on Cooking Products

On November 2, APGA and AGA submitted comments to the Department of Energy (DOE) on their
proposed Standards for Residential Conventional Cooking Products. DOE is proposing to reverse the
current ban on standing pilot lights, and instead establish a Maximum Integrated Annual Energy
Consumption (IAEC) of 924.4 kBtu/year. Unfortunately, eliminating the no standing pilot prohibition
and establishing a maximum IAEC does not make sense when the method for determining the IAEC has
not been finalized or vetted through industry-wide testing and verification of its reproducibility.
As stated in multiple previous proposed rules, DOE must first complete and finalize any changes to the
testing procedures prior to proposing changes to the energy efficiency standard. We stated in our
comments that the limited testing that the DOE conducted on measuring the IAEC cannot and should
not be considered adequate on such an important minimum efficiency requirement. To help prove our
point we referenced the Association of Home Appliance Manufacturers (AHAM) comments, which
provided specific problems and needed clarifications on the test method that must be addressed prior
to proposing a new efficiency standard.

In addition to the procedural issues, we commented on the point that DOE failed to assess the potential
for fuel switching from natural gas conventional cooking products to electric products. We also
commented on DOE’s failure to conduct a natural gas utility impact analysis as required by the DOE
standards development rulemaking procedures.

We did support DOE’s use of the American National Standard Institute (ANSI) Z21.1 for Household
Cooking Gas Appliances as the appropriate standard to distinguish residential gas conventional cooking
products from commercial gas cooking products. The ANSI Z21.1 standard has requirements for
additional safeguards such as push to turn control valves and surface temperature limitations that
would not be needed in a commercial kitchen application. Even if a gas conventional cooking product
has the appearance of a commercial type product, the added requirements in the residential Z21.1
safety standard would distinguish it from a commercial product.

For questions on this article, please contact Dan Lapato of APGA staff by phone at 202-464-2742 or by
email at dlapato@apga.org.

PHMSA to Sponsor Pipeline Safety Forum

The Pipeline and Hazardous Materials Safety Administration (PHMSA) will sponsor a Pipeline Safety
Research and Development Forum in Cleveland this November 17-18. PHMSA periodically holds this
public forum to generate a national research agenda that fosters solutions for the many challenges with
pipeline safety and with protecting the environment. This forum allows public, government, and
industry pipeline stakeholders to develop a consensus on the technical gaps and challenges for future
research. It also reduces duplication of programs, factors ongoing research efforts, leverages resources,
and helps coordinate with other pipeline research bodies. The national research agenda developed
through this forum is aligned with the needs of the pipeline safety mission and makes use of the best
available knowledge and expertise, and considers stakeholder perspectives.

The public forum will be held at the Cleveland Marriott Downtown at Key Center. Members of the public
may attend this free forum. Please note that this public forum will not be available by webcast. Onsite
registration will also be available for those attending in person. Event reporting and presentations will
be available shortly after the public forum. Members of the public may submit written comments either
before or after the public forum.

For questions on this article, please contact John Erickson of APGA staff by phone at 202-464-0834 or by
email at jerickson@apga.org.

PHMSA Creates Webpage on Status of PIPES Act

President Obama signed the Protecting Our Infrastructure of Pipelines and Enhancing Safety (PIPES) Act
on June 22. The Pipeline and Hazardous Materials Safety Administration (PHMSA) has created a
webpage dedicated to PIPES and the status of a final rule for each outstanding regulation. Visit the page
at www.phmsa.dot.gov/pipes-act.

APGA Supports Request for an Extension in the Furnace SNOPR

On October 28, APGA and the American Gas Association (AGA) sent a letter to the Department of Energy
(DOE) in support of a request filed earlier in the day by Spire, Inc., to extend the comment period in the
furnace Supplemental Notice of Proposed Rulemaking (SNOPR) to total a period of 120 days from the
date of publication of the SNOPR in the Federal Register. APGA and AGA previously asked for a 30-day
extension beyond the current November 22 deadline, but it was communicated at the October 17 DOE
public meeting that DOE would not extend the comment period.

In its letter requesting the extension, Spire argues among other things, that pursuant to the settlement
agreement in APGA v. DOE, DOE agreed to provide a minimum of 90 days for public comment following
the issuance of the proposed rule. However, as Spire points out, that would make comments due just
before Christmas, thus making a 120-day period more reasonable for all stakeholders. The letter also
states that the serious and complex technical issues warrant extending the comment period to allow
entities, such as the Gas Technology Institute, the time needed to conduct a thorough analysis of the
DOE technical support data and develop meaningful comments.
A copy of the letter sent by APGA and AGA is available on the APGA website at www.apga.org. In
addition, you can view the letter sent by Spire to DOE requesting the extension at www.regulations.gov.
For questions on this article or on APGA’s efforts to respond to the furnace SNOPR, please contact Dave
Schryver of APGA staff by phone at 202-464-2742 or by email at dschryver@apga.org.

EIA Reports Storage Increase of 54 Bcf to Put Working Gas Storage at 3,963 Bcf

Here is the weekly EIA Summary Report issued on Thursday, November 3, 2016, which reports the
week’s storage report highlights for Friday, October 28, 2016. A 54 Bcf increase has been reported.
Working gas in storage was 3,963 Bcf as of Friday, October 28, 2016, according to EIA estimates. This
represents a net increase of 54 Bcf from the previous week. Stocks were 48 Bcf higher than last year at
this time and 173 Bcf above the five-year average of 3,790 Bcf. At 3,963 Bcf, total working gas is above
the five-year historical range.

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