Midweek Energy Updates: November 1, 2017

The full version of these articles will appear in The Foster Report No. 3172, published on Nov. 3, 2017

 

DOE Official, Former Commissioners Discuss Grid NOPR, Likely FERC Actions

October 31, 2017

FERC is not likely to embrace the power grid resilience notice of proposed rulemaking (NOPR) as written by Energy Secretary Rick Perry under the tight deadline of the NOPR, but may instead issue an order to hold a technical conference, craft a policy statement, or seek additional information on the issues, former FERC Commissioner James Hoecker said October 31.

“I’d be shocked” if the Commission endorsed the NOPR as proposed by Perry, Hoecker said after speaking on one of two panels at a Bipartisan Policy Center (BPC) event on the NOPR (RM18-1).

Speaking in favor of the NOPR was Sean Cunningham, executive director of the Department of Energy’s Office of Energy Policy and Systems Analysis, Kathleen Barron of Exelon Corp., and Paul Stockton, managing director at consulting firm Sonecon LLC. More cautious support came from William Murray, vice president of state and electric public policy at Dominion Energy, which owns generation and pipeline assets that would be affected by the NOPR’s planned compensation for coal and nuclear power plants in wholesale markets with independent system operators (ISOs) and regional transmission organizations (RTOs).

One thing FERC should not do is harm state-specific actions to support generation resources, Murray said.

 

NYSDEC Asks FERC to Stay Notice to Procced with Construction of Millennium’s Valley Lateral

October 31, 2017

The Commission should not have authorized Millennium Pipeline (CP16-17) to proceed with construction of the Valley Lateral Project without ruling on a pending motion for reopening and stay, and a pending request for rehearing, the New York State Department of Environmental Conservation (NYSDEC) said in an October 30 request for a stay.

On October 27, FERC’s Office of Energy Projects issued a notice to proceed with construction for the Valley Lateral Project. On October 20, Millennium had renewed its request to the Commission for a notice to proceed with construction activities[1] after filing an initial request to proceed on July 21.

The project is designed to deliver up to 127,000 Dth/d to the Valley Energy Center being built by Competitive Power Ventures (CPV) in Wawayanda, New York.

Millennium filed a response to the NYSDEC on October 30, arguing that it shouldn’t have taken the NYSDEC more than 21 months to review Millennium’s water quality application, and the Commission’s determination that the NYSDEC had waived its authority by failing to act within the one-year statutory deadline was proper.

Also on October 30, CPV filed an opposition to the NYSDEC’s request for a stay, and argued that FERC’s September 15 determination that NYSDEC waived its right to act on Millennium’s water quality certificate application by taking too long to issue a decision regarding the project, was correctly based on the plain meaning of Clean Water Act (CWA) Section 401.

[1]   For more information, see, Following Court’s Advice, Millennium Asks FERC for Authority to Build Valley Lateral, FR No. 3159, pp. 17-18, FERC Rules Against NYSDEC on Millennium Valley Lateral Project, FR No. 3165, pp. 13-14, and Millennium Pipeline Renews Request for Notice to Proceed for Valley Lateral Project, FR No. 3171, pp. 31-32.

 

FERC Sets Peregrine Complaint Against Texas Eastern for Hearing, Settlement Procedures

October 31, 2017

The complaint of producer Peregrine Oil & Gas II LLC against Texas Eastern Transmission LP regarding a leak and outage on Texas Eastern’s offshore system in the Gulf of Mexico deserves a hearing even though Peregrine is not a firm transportation shipper on Texas Eastern, FERC said in an October 27 order (RP17-811).

Because Peregrine does not have a firm service contract on Texas Eastern, its complaint against the pipeline should be dropped, Texas Eastern argued in the proceeding. In its complaint and subsequent answers to the pipeline challenging it, Peregrine provided no basis for its claim that it is entitled to compensation due to the outage on Texas Eastern’s offshore Line 41-A system because the producer has never reserved capacity or paid for service on the system, the pipeline said.

Peregrine admitted that it does not have either a firm or interruptible transportation service agreement with Texas Eastern, and that it instead has a no-fee TABS-1 agreement, which provides for aggregation of supplies at no charge to various aggregation points on the Texas Eastern system, the pipeline told FERC. Texas Eastern said the only form of compensation it might owe a company in circumstances as presented in the case would be reservation charge credits to firm shippers. But since Peregrine did not receive firm service, it is not entitled to the compensation and damages sought in the complaint.

Texas Eastern disputed Peregrine’s claim that the pipeline essentially abandoned its Line 41-A system by not keeping the system in good working order for timely service. The disruption of service was temporary and Texas Eastern worked diligently to bring the line back into service, Texas Eastern said, taking offense at Peregrine including audio recordings of meetings without providing notice to the pipeline.[1]

FERC found that Peregrine’s complaint warrants a hearing. “As the Commission has previously held, natural gas producers whose gas is transported on a pipeline do have a substantial indirect interest in that pipeline’s rates, terms and conditions of service, even if they do not themselves have contracts for service on that pipeline,” FERC said

[1]   For past stories, see Texas Eastern Shoots Back in Complaint Case with Offshore Producer Peregrine, FR No. 3159, pp. 9-11, Peregrine Challenges Texas Eastern’s Answer to Complaint About Offshore Service, FR No. 3156, pp. 17-19, Texas Eastern Responds to Peregrine’s Complaint About Service Outage, FR No. 3155, pp. 20-24, and Producer Files Complaint Against Texas Eastern for Offshore Pipeline Maintenance, FR No. 3152, pp. 20-22.

 

FERC, Other Agencies Respond to Trump Executive Order on Energy Resources

October 30, 2017

FERC and other federal agencies submitted reports to the Trump administration about their efforts to comply with Executive Order (EO) 13783, which called for them to review regulations and policies that could potentially burden the development or use of domestic energy resources.

The Department of Energy (DOE), Department of the Interior (DOI), Environmental Protection Agency, and others highlighted their efforts to reduce regulatory burdens on energy companies, including trying to repeal the Clean Power Plan (CPP), streamline natural gas exports, improve reviews under the National Environmental Policy Act (NEPA), enhance hydropower project licensing, expedite permitting for energy projects, and improve the leasing of federal lands for energy production.

The reports were submitted to the Office of Management and Budget, Vice President Mike Pence, the head of the Council on Environmental Quality, the assistant to the president for economic policy, and others as directed in the EO. They were in response to the EO issued by President Donald Trump at the end of March on promoting energy independence and economic growth.

The DOE report, from Energy Secretary Rick Perry, mentioned the formation of a regulatory reform task force and the review of comments from policymakers, stakeholders, and the public on rules DOE has undertaken. The report calls for reforms to the NEPA process, a review of appliance and energy conservation standards, streamlining exports to include faster approval of small-scale LNG export facilities, and reforms to DOE’s national laboratories to have them operate more efficiently and focus on early-stage research and development.

DOE in September proposed a rule to provide quicker approval of small-scale LNG export projects, and the regulatory reform task force will consider whether future rulemakings could allow for faster processing of larger gas export projects consistent with applicable law and DOE’s statutory authority, the report said.

 

For more information on how to access the full articles, please contact Gina Smith at Concentric Energy Publications.

Gina Smith

508.263.6263

gsmith@fosterreport.com

www.fosterreport.com

 

 

These articles will appear as published in The Foster Report No. 3172, being issued on November 3, 2017

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