General Counsel Report

APGA's General Counsel, John Gregg of McCarter & English, prepares this weekly report to highlight the industry news for public natural gas professionals.

August 16, 2018

Interstate Pipelines Tackle Methane Emissions
Some 26 pipeline companies that are members of INGAA have pledged to minimize methane emissions. INGAA’s board of directors on July 19 formally affirmed its commitment to minimize methane emissions from their interstate natural gas transmission and storage facilities through a series of voluntary pledges that embrace the following core principles to 1) minimize emission from interstate natural gas pipelines and pneumatic controllers; 2) minimize emissions from natural gas storage and compressor stations; and 3) develop effective practices and information sharing protocols related to detecting and reducing methane emissions. INGAA’s methane commitments include pledges such as: installing air-driven, low-bleed, or intermittent pneumatic controllers when installing new pneumatic controllers, unless a different device is required for safe operations; minimizing emissions during maintenance, repair and replacement of pipelines; replacing rod packing on all transmission and storage reciprocating compressors; conducting leak surveys at member-owned and member-operated transmission and storage compressor stations and natural gas storage wells; and committing to transparently reporting methane emissions. A whitepaper released by INGAA this week provides technical details, but does not address the costs of remediation and how much would be owed by ratepayers.

California Charged with Using Phony Data to Support Solar Mandate
A Duke University professor writing in the Wall Street Journal has claimed that the California Energy Commission, which approved the rule that all homes built in the state after 2020 be equipped with solar panels as part of new energy-efficiency regulations, failed to conduct an objective, independent investigation of the rule’s effects. Instead it relied on economic analysis from the consultancy that proposed the policy, Energy and Environmental Economics Inc., which claimed that home buyers get a 100% investment return—paying $40 more in monthly mortgage costs but saving $80 a month on electricity. The regulator assumed the cost of new solar panels was $2.93 a watt in 2016 and will decline 17% by 2020. Yet the Lawrence Berkeley National Laboratory estimated the average cost of installed panels to be $4.50 a watt for the 2- to 4-kilowatt systems the policy mandates. That is $4,000 more than regulators claim for a 2.6-kilowatt model system in the central part of the state, where 20% of new homes are expected to be built. As for alleged savings on energy bills, the state has assumed the continuation of net energy-metering that effectively subsidizes electricity produced by a rooftop solar panel. Today residential solar generators are paid as much as eight times for their excess electricity than what wholesale generators receive. Yet most states are rethinking these generous subsidies, paid by ratepayers, because they shift the costs of maintaining the electric grid to relatively poor nonsolar households. The California Public Utilities Commission is set to revisit this policy in 2019. The professor has calculated the savings at $12.50 a month, far less than the $80 savings relied upon by policymakers. He writes that large-scale solar farms generate twice the electricity of the solar residential mandate at the same cost.

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