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.

February 14, 2019

Pipeline Fails in Bid to Hide Rate Case Filing Update Numbers
Trailblazer Pipeline Company LLC, which had filed a routine rate increase under NGA Section 4 in August, asked FERC to delay filing of the routine update of its rate filing because the matter was in settlement negotiations and had not been set for hearing. FERC denied the request, finding that the updated test period information required by section 154.311(a) “is relevant to evaluating Trailblazer’s proposed cost-of-service rate change. Providing this information to the parties will help them make informed decisions during settlement negotiations.”

DOE To Re-Evaluate “Process Rule”
The U.S. Department of Energy has published a notice of proposed rulemaking to streamline and modernize the so-called “Process Rule.” APGA in the past has asked DOE to take this step and make the rule binding on the actions of the EERE. Found in the Code of Federal Regulations at 10 CFR 430 Appendix A to Subpart C, the Process Rule describes the procedures, interpretations, and policies that guide DOE in establishing new or revised energy-efficiency standards for consumer products. Elements of the Process Rule have been superseded or supplemented by more recent practices described elsewhere on this website or in other notices issued by DOE. DOE will accept comments, data, and information regarding this NOPR no later than April 15, 2019. DOE will also hold a process rule public meeting on March 21, 2019, in Washington, DC.

The proposal aims to improve the agency’s process for setting energy efficiency standards and test procedures for residential appliances and commercial equipment, enhancing transparency, accountability, and regulatory certainty for stakeholders. In response to numerous comments received, DOE is proposing among other things, to establish a threshold for “significant” energy savings at 0.5 quads over 30 years; to require that EERE establish test procedures 180 days before publishing a proposed energy conservation standard; to clarify that EERE will codify industry consensus standards for test procedures rather than establishing its own, separate test methods.

Green New Deal “Utter Nonsense”: Need Carbon Capture
John Hofmeister, founder and chief executive of Citizens for Affordable Energy, and the former president of Shell, is quoted in Gas Daily as disparaging the Green New Deal, a legislative framework proposed in Congress that calls for banning the use of fossil fuels within the next decade, as “utter nonsense.” Fossil fuels have an energy density factor 25 times as great as renewable fuels, such as wind and solar, he said. The proper “doable” solution, he says, is to deal with the gaseous pollution that is created with the consumption of fossil fuels. Hofmeister pointed to the Sky Scenario, proposed by Shell, which calls for the use of carbon capture technologies to meet the goal of the Paris agreement to limit the global average temperature rise to well below 2°C from pre-industrial levels. That scenario calls for the construction of 10,000 industrial-scale plants — the size of a modern refinery — to remove carbon from the atmosphere, between 2020 and 2070. “We have the technology to get it done,” Hofmeister said.

Los Angeles Cancels Natural Gas Generators Requested by City Utility
Los Angeles Mayor Eric Garcetti has announced that the city-owned utility is abandoning a plan to spend billions of dollars rebuilding three natural gas power plants along the coast. He cited the city’s goal of 100% renewable energy. State lawmakers passed a bill requiring California to get 100% of its electricity from climate-friendly sources by 2045. The staff of the Los Angeles Department of Water and Power argued that the gas plants are critical to keeping the lights on in the city. But Garcetti sided with environmental groups who lobbied the mayor not to rebuild the Scattergood, Harbor, and Haynes power plants, saying the gas-fired plants contribute to climate change and local air pollution.

Legal Challenge to '2-For-1' Reg Order Lives On
U.S. District Judge Randolph D. Moss has ruled that Public Citizen, the Communications Workers of America and other groups and individuals had "met their burden of plausibly alleging that they have standing to sue" over the January 2017 2-for-1 regulatory reduction order. But he also said the plaintiffs had nevertheless failed to show there was "no genuine dispute of material fact" regarding their standing to sue. “They have not yet met — and ultimately may be unable to meet — their burden of proving that the executive order, as opposed to separate policy considerations or other factors, has delayed the issuance of a specific regulation, which would have otherwise issued, and that the resulting delay has caused them, or their members, to suffer a redressable injury.” The judge indicated that the plaintiffs would have to make a stronger case that they have standing if they want to advance with their suit. But he left open the possibility that they could be successful, saying the "existence of ... hurdles does not mean that plaintiffs' task is impossible." The case is Public Citizen Inc. et al v. Trump et al, case number 1:17-cv-00253, in the U.S. District Court for the District of Columbia.

Children Ask Court to Halt All Government Approvals of Fossil Fuel Projects
In Kelsey Rose Juliana et al. v. the United States of America et al. (9th Cir. No. 18-36082), a group of 21 young plaintiffs have sought a preliminary injunction from the Ninth Circuit to stop the government from authoring new “leases, permits, or other federal approvals” for extracting coal from federal lands, offshore drilling and the “development of new fossil fuel infrastructure.” The filing says that “at a minimum” 100 projects awaiting permits would be affected. The plaintiffs assert constitutional claims and that their rights to a healthy environment are being violated by the federal government’s policies that authorized and subsidized the production and use of fossil fuels. The government’s decisions to increase fossil fuel production will harm the plaintiffs and make any win they may receive at trial less meaningful by putting new fossil fuel infrastructure in place, which means it will likely be operational for decades. “Plaintiffs’ harms, some of which are not yet irreparable, will become locked-in causing life-long consequences for plaintiffs in the absence of an injunction,” the motion said, adding that the status quo will bring more extreme weather, wildfires, pollution and rising temperatures. The plaintiffs said that not only are the elevated emissions worsening the degree to which the climate changes, but the young people are also facing psychological problems caused by the government’s decision-making. The plaintiffs have felt “deep anger, frustration, depression and feelings of betrayal” as they observe their government “actively causing harm,” the motion said. “Children are uniquely vulnerable to psychological harms from climate change,” the motion said. “Trauma from climate change and institutional betrayal can alter hormone levels, brain development, cognitive functioning, reproductive success and even alter children’s DNA.”

View past reports here.