Pipeline User Fees

Every five years, Congress reauthorizes pipeline safety legislation that affects APGA members. Right now, Congress is in the process of a new reauthorization.

A key issue for city- and community-owned natural gas utilities in this reauthorization is a possible change to user fees, which fund the natural gas safety programs of the Pipeline and Hazardous Material Safety Administration. User fees are collected and paid by natural gas transmission operators as part of the rates they charge downstream. In effect, transmission operators are reimbursed by their thousands of customers through the rates they pay.

This has been the approach used since the inception of the user fees, and is a simple way of collecting user fees for the relatively small number of interstate pipelines. However in recent years, required user fees have increased for both transmission and distribution.

Learn more about user fees and pipeline safety in this video.

With the recent increase in distribution user fees, interstate pipelines have been pushing to avoid filing Section 4 requests for a corresponding rate increase with the Federal Energy Regulatory Commission (FERC)  by pushing off the collection of distribution user fees onto the over 1,200 distribution companies and their thousands of customers.

APGA’s Position

It makes no sense to change the current, efficient, well-functioning user fee system. APGA believes that interstate pipelines are not filing Section 4 requests. They are doing this to avoid FERC’s scrutinization of the rates they charge their customers, and perhaps finding thems unreasonable and in breach of the Natural Gas Act.

This Natural Gas Supply Association’s interstate pipeline rate study found that pipelines had overcharged by $3 billion. These are dollars that come out of homeowners’ and businesses’ pockets, hurting the family budget and American manufacturers’ competitiveness.

What can you do about onerous user fees?

Congress shouldn’t reward pipeline monopolies that are overcharging their customers. Instead, Congress should maintain the current user fee system, which efficiently and effectively funds the Pipeline and Hazardous Material Safety Administration.

Interstate pipelines should file a Section 4 request with FERC for a corresponding increase in the rates, instead of shifting user fees onto the 1,200 natural gas distribution systems.  Every APGA member should call and meet with their members of congress to request a clean reauthorization of pipeline safety legislation with no changes to the user fee system in 2015.

To contact your senator, click here.

To contact your representative, click here.