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.

April 19, 2018

FERC Re-Opens Pipeline Certificate Policy for Comment
FERC Re-Opens Pipeline Certificate Policy for Comment At its April open meeting, the Commission issued a Notice of Inquiry into its 1999 Pipeline Certificate Policy Statement (Docket No. PL18-1-000).  The initiative was born of work commenced internally by former Chairman Bay, which came to light when Commissioner LaFleur dissented to the issuance of certificates, raising the fundamental question of whether reliance on precedent agreements to determine a project’s need is adequate.  Commissioner Glick has agreed with LaFleur’s concerns, including whether FERC should issue certificates prior to the conclusion of all permitting at the state and local level, an issue being raised by environmentalists.  Specifically, FERC desires comments on how FERC determines project need, its use of eminent domain, environmental assessment process, and the procedures and timelines employed now.  FERC is motivated not only by landowner dissatisfaction and concerns for climate change, but also by the fact that projects tend to be supported pipeline affiliates more than in 1999.  It seeks a more transparent and efficient process.  Commissioner Chatterjee emphasized that the policy should require that pipelines bear the financial risks of pipeline construction while Commissioner Powelson echoed that “we do not build pipelines in this country on speculation.”  Comments will be due in late June.

FERC Answers to Congressional Oversight Hearing
The U.S. House Energy and Commerce Committee held a hearing yesterday on oversight of FERC and their budget. Chairman McIntyre enumerated these priorities: resiliency of the Bulk Power System, and the review of the Commission’s Certificate Policy Statement.  Several others raised concern or at least noted the need for FERC to review its pipeline policy, including FERC Commissioner Chatterjee who said that he is committed to ensuring an efficient and open process which will allow for landowner and other public participation.

Pipes Show Displeasure with FERC MLP Policy Switch
Pipelines organized as master limited partnerships (MLPs), facing the end of their tax benefit that allows a phantom tax allowance are appealing to Congress and FERC.  At FERC’s budget authorization hearing, commissioners heard from Texas congressmen worried that pipeline projects would be negatively affected.  Among those seeking clarification/rehearing:  Interstate Natural Gas Association of America, Enbridge Energy Partners, EQT Midstream Partners, Dominion Energy, TransCanada, Enable Mississippi River Transmission, Tallgrass Pipelines, Plains Pipeline, Kinder Morgan and SFPP.  The oil pipeline association put it this way, “There is no longer any need to speculate about the effect of the commission’s decision.  The market has answered the question: MLPs have lost over $30 billion in market capitalization since the revised policy statement was issued, and financial analysts predict further financial harm to MLP pipelines.”  No consumers sought clarification.

Transco Files Southeastern Trail Extension
Transcontinental Gas Pipe Line Co. LLC has requested a certificate from FERC for its $405 million Southeastern Trail expansion project, which would provide 300,000 Dth/d by November 2020.   The project involves installing nearly 8 miles of new pipeline in Virginia, as well as more horsepower  for three existing compression stations in the state, and making modifications at existing pipeline facilities in South Carolina, Georgia, and Louisiana to allow for gas to flow bidirectionally. 

Administration to Bring CFTC to Full Strength
The White House announced its intention to nominate Dan Berkovitz, a former Commodity Futures Trading Commission general counsel, to fill the final open slot on the commission.  Dan Berkovitz, a partner at the law firm WilmerHale, was the CFTC’s general counsel during the Obama administration and played a key role in the passage and implementation of the 2010 Dodd-Frank regulatory overhaul law. He would fill the second Democratic seat at the CFTC. The CFTC currently has three members and has not had a full five-member commission since 2014.  Mr. Berkovitz is expected to be paired with Dawn Stump, a former Republican congressional staffer and derivatives lobbyist, for a Senate confirmation vote. Ms. Stump’s nomination has been in limbo since an uneventful confirmation hearing last July.

Youth Gun Violence Movement Shows Up in Climate Change Movement in Florida
A lawsuit has been filed in Florida by eight plaintiffs ages 20 and younger (and backed by Oregon-based environmental group Our Children's Trust) claiming that Florida officials are harming future generations by creating and maintaining a fossil fuel-based energy system that leads to increased greenhouse gas emissions and global temperatures.   The suit names Republican Gov. Rick Scott as well as state environmental, agricultural and utility regulators. It seeks a declaratory judgment saying that the state's fossil fuel activities violate the public trust doctrine and Florida's constitution, as well as an order that the state enact a statewide climate remediation program that includes phasing out fossil fuel use.  Essentially the same law suit is pending in an Oregon federal court.  The federal suit is also being spearheaded by Our Children's Trust, and one of the plaintiffs in the Florida suit, 10-year-old Levi Draheim, is also a plaintiff in the federal suit. Last year the judge refused to dismiss the suit, which has an October 29 trial date.

Perry Announces $105 Million in New Funding to Advance Solar Technologies
U.S. Secretary of Energy Rick Perry announced up to $105.5 million to support energy innovation through solar technology. Under the Department of Energy’s Solar Energy Technologies Office, DOE will fund about 70 projects to advance both solar photovoltaic (PV) and concentrating solar thermal power (CSP) technologies, as well as facilitate the secure integration of those technologies into the nation’s electricity grid. Funding will also support efforts that prepare the workforce for the solar industry’s future needs. 


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