Midweek Energy Updates: October 25, 2017

The full version of these articles will appear in The Foster Report No. 3171, published on Oct. 27, 2017.

 

New Pipeline Planned to Serve Dominion East Ohio, Industrial Customer

October 20, 2017

A new company, RH energytrans LLC, filed an application at FERC to build a new natural gas pipeline from northwest Pennsylvania into Northeast Ohio to provide 55,000 Dth/d of firm transportation service to Dominion East Ohio (DEO) and an industrial customer planning to build a pig iron plant in Ashtabula, Ohio.

The October 16 Natural Gas Act Section 7(c) application (CP18-6) seeks an order from FERC by 6/1/18 so that RH can place the project into service by 11/1/18 as required by the foundation shipper, local distribution company DEO.

DEO signed a binding precedent agreement with RH for 40,000 Dth/d of capacity with a term of 15 years, while North Atlantic Iron Corp. (NAIC) has expressed an interest in contracting for 15,000 Dth/d for a term of 25 years, beginning in the second half of 2019. RH is negotiating the terms of a precedent agreement with NAIC that would cover the needs of the pig iron plant, which is expected to begin service in the second half of 2019.

RH intends to provide a new means of delivering gas to DEO from the East to overcome peak day supply deficits and support economic development in the area around Ashtabula. The project will bring a new source of gas supply to an area of Ohio that needs additional sources of gas and will reinforce DEO’s delivery capabilities, the company said.

The RH project, dubbed the Risberg Line, is estimated to cost $87.92 million.

 

Texas Eastern Files Application for Louisiana Market Expansion Project and Texas Industrial Expansion Project

October 24, 2017

Texas Eastern Transmission LP (CP18-10) on October 19, filed with the Commission an abbreviated application under Natural Gas Act Section 7(c) for the proposed Louisiana Market Expansion Project and Texas Industrial Expansion Project.

The projects will provide firm transportation capacity necessary for Texas Eastern to transport up to an additional 157,500 Dth/d of natural gas on Texas Eastern’s existing mainline facilities from receipt points in Evangeline and Calcasieu Parishes, Louisiana.

In-Service Date. Texas Eastern asked the Commission to issue a final certificate on or before 9/1/18, so that it will have time to complete and place the project facilities into service by 8/1/19.

NEPA. Texas Eastern explained that, while the projects are stand-alone projects with different customers and market needs, it is proposing to construct them at the same site during the same construction season, and was submitting them together so that only one environmental document would have to be produced under the National Environmental Policy Act (NEPA).

Texas Expansion Project. The Texas Industrial Market Expansion Project would provide up to 82,500 Dth/d of firm transportation capacity from a receipt point in Zone WLA in Evangeline Parish, Louisiana, to an existing delivery point in Texas Eastern’s Zone WLA in Orange County, Texas, and a future delivery point in Texas Eastern’s Zone STX in Jefferson County, Texas.

 

Kinetica Energy Responds to Protest of Tariff Changes Required by Commission Order

October 25, 2017

Kinetica Energy Express LLC (RP16-1299) responded on October 23, to a protest of a compliance filing it filed with the Commission, by saying it followed the Commission’s order when it deleted a clause in a section of its tariff about secondary points.

Kinetica said in response to the October 10 protest by a Producer Coalition,[1] that if it had left the language in the tariff, it would have been criticized for not deleting it.

Kinetica explained that the Commission’s order required the deletion of the clause from the tariff because any language that would be inconsistent with the rule that all shippers already have access to all secondary points had to be deleted. The deletion of the language is consistent with the Commission’s order, said Kinetica, and it was simply acting in good faith.

The Producer Coalition also objected to the use of the word “deliverability” in section 14.1 of the General Terms & Conditions of the tariff, and Kinetica said the Producer Coalition wanted to define the term. Kinetica contends there is no need for a definition, and the Producer Coalition’s proposed definition “would appear to make ‘deliverability’ synonymous with ‘capacity’ and thus make the addition to Section 14.1 completely redundant.”

August 25 FERC Order. On August 25, following a technical conference and comments from different parties in the proposed tariff revisions of Kinetica, the Commission accepted some of the pipeline’s proposal, required modifications to some portions, and rejected several elements.[2]

The order denied Kinetica’s plan to eliminate Rate Schedule FFT-3, to shorten the time frame in which it requires a net monthly imbalance to be within a 5% tolerance, to limit a shipper’s secondary receipt and delivery points’ rights, to curtail secondary firm transactions before primary firm transactions, and to list examples of the term domestic use of gas to describe gas used by the pipeline to support operations.

The order accepted several of Kinetica’s tariff changes after the pipeline revised them, including the withdrawal of a proposed hurricane surcharge, deleting the term displacement from its tariff, reducing the penalty for unauthorized overruns during non-critical periods and increasing the penalty for unauthorized overruns during critical periods.

[1] The Producers Coalition includes: Arena Energy LP, Deepwater Development Co. LLC, LLOG Exploration Offshore LLG, W&T Offshore Inc., and Walter Oil & Gas Corp.

[2] See, FERC Accepts, Rejects Various Elements of Kinetica Tariff Change, FR No. 3164, pp. 19-22.

 

Groups Seek Deliberative, Independent Process at FERC on Grid Resilience NOPR

October 24, 2017

With a vast amount of comments being filed at FERC on the power grid resilience notice of proposed rulemaking (NOPR) from Energy Secretary Rick Perry, and most them in opposition to the proposal, attention is turning to how the Commission will handle the plan to improve compensation for coal and nuclear power plants in organized markets.

At an October 24 briefing with media members, representatives from the natural gas, oil, and renewable energy sectors expressed confidence that FERC commissioners will maintain their independence and not cater to the directive from Perry and the Trump administration. The Commission will have to develop a solid proposal based on the record to withstand any legal challenge, and the record thus far does not support what Perry submitted to FERC (RM18-1) under Section 403 of the Department of Energy Organization Act, officials said.

Among the comments filed by consumer groups, lawmakers, state regulators, grid operators, environmental groups, and others are that: the issue of grid resilience is not clearly defined; the NOPR is designed to reward coal and nuclear plants in organized markets with no justification; it would distort markets and cost consumers billions of dollars; FERC can use market-based solutions or other options to address compensation for certain generation attributes; the short time frame for adoption does not allow enough time for FERC and the energy industry to address such complex issues; and the proposal is a “solution” to a non-existent problem.

FERC could “take final action” as called for under the statute within the time frame proposed by rejecting the proposal, several groups said. Alternatively, it could take one of the steps that FERC Chairman Neil Chatterjee laid out in comments on the proposal.[1] Those include issuing an Advanced NOPR, a Notice of Inquiry, holding a technical conference, or addressing the comment schedule, speakers said at the media briefing.

[1] For past stories, see Chatterjee Lays Out Priority List, Addresses Grid NOPR, Pipeline Reviews, FR No. 3170, pp. 1-5, Perry Defends ‘Getting Conversation Started’ on NOPR; Chatterjee Lists Options, FR No. 3169, pp. 1-4 and DOE NOPR on Grid Resiliency Lights Firestorm; Eyes Turn to FERC for Response, FR No. 3168, pp. 1-8.

 

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. 3171, being issued on October 27, 2017

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