Midweek Energy Updates: December 6, 2017

The full version of these articles will appear in The Foster Report No. 3177, published on Dec. 8, 2017


Questions Raised About Chatterjee Social Media Posts With Actor James Cromwell

December 6, 2017

After a social media spat with actor and activist James Cromwell, FERC Chairman Neil Chatterjee is facing criticism for his reactions on his personal Facebook page that have been altered.

Several sources said Chatterjee’s post of “Come at me bro!” on the evening of December 3 and other remarks disparaging Cromwell were unprofessional and do not reflect well on the Commission or Chatterjee’s temperament.

“I’m questioning Chairman Chatterjee’s fitness to continue serving on the Commission,” said Tyson Slocum, energy program director for consumer group Public Citizen.

The social media activity, combined with Chatterjee’s effort to support coal and nuclear generation in a notice of proposed rulemaking (NOPR) from Energy Secretary Rick Perry, raise questions about whether Chatterjee is leading an independent agency or acting as an agent of the Trump administration, Slocum said.

The FERC chairman may be enamored with President Donald Trump’s social media style, “but Neil Chatterjee cannot get away with what the President can get away with,” Slocum said.

Others who spoke without wanting to be identified also questioned Chatterjee’s engagement and taunting of Cromwell, who has protested at pipeline projects and has been a vocal opponent of Millennium Pipeline projects in New York state. Even though it was on Chatterjee’s personal Facebook page and not his official Twitter feed as FERC Chairman, “he crossed a line,” said an industry source.

The posts, which started on November 16 after Cromwell was removed from the FERC open meeting by security for speaking out against the Commission, were not visible to the public on Chatterjee’s Facebook page following media reports and reactions to them. They were not removed and Chatterjee does not regret the posts, a spokeswoman for Chatterjee said.


Rover Gains OK for New Compressor, Loses Rehearing on Blanket Certificate

December 4, 2017

Rover Pipeline LLC was not successful in its attempt to gain a blanket certificate to perform routine construction activities, as FERC determined in a November 30 order (CP15-93) that the company cannot be trusted to comply with FERC’s blanket certificate regulations.

The order denied the rehearing request of Rover, which is building a $4.2 billion pipeline to transport up to 3.25 Bcf/d of natural gas from the Marcellus and Utica Shale region to markets in Ohio and Michigan, with pipeline connections to reach market hubs in the U.S. and Canada. The project has seen plenty of controversy, including the destruction of a building in 2016, before it received FERC’s order granting a Natural Gas Act (NGA) section 7 certificate.

Rover’s demolition of the Stoneman House in Ohio, which was built in 1843 and was eligible for inclusion in the National Register of Historic Places, has cost it the ability to obtain a blanket certificate. That incident also is the subject of a FERC staff investigation, while construction of Rover’s facilities has continued and been halted in certain areas following allegations of environmental violations at the state level, and concerns at FERC about horizontal directional drilling activities.

Rover was more successful in its request to amend its NGA section 7 certificate by adding a third compressor unit at the Majorsville Compressor Station in Marshall County, West Virginia. A November 28 order (CP17-464) from FERC authorized the additional compressor unit, which will not change the overall system-wide capacity of Rover’s facilities.


Companies Respond to West Texas LPG Pipeline’s Attempts to Challenge Intervention

December 5, 2017

Interveners ConocoPhillips Co., Anadarko Energy Services Co., and XTO Energy Inc. filed responses December 4, to West Texas LPG Pipeline LP’s (OR17-19) attempts to challenge their intervention in WTXP’s rate case.

ConocoPhillips. ConocoPhillips argues that WTXP’s claim that ConocoPhillips didn’t have a direct interest in the outcome of the proceeding is incorrect, because ConocoPhillips says that as a producer of NGLs in the Permian Basin it is both a potential customer and potential supplier of shippers on WTXP’s system.

ConocoPhillips notes that, much like Pioneer Natural Resources USA, Inc.’s argument about the standard for intervening,[1]  ConocoPhillips only needs to show a “direct interest” in the proceeding to intervene. WTXP erroneously claimed that ConocoPhillips needed to meet the higher “substantial economic interest” standard, which ConocoPhillips says only applies to protests and not interventions.

ConocoPhillips also argues that it has demonstrated good cause for intervening out of time because of an administrative oversight, and explains that the Commission has consistently held that an administrative oversight constitutes good cause to intervene out of time.

ConocoPhillips notes that its motion to intervene was close to the actual deadline; there would be no disruption to the proceeding if intervention were granted; WTXP has stated it will not file a response to the protests until 1/4/18; and granting the intervention won’t prejudice any of the parties.

Anadarko and XTO. A joint response was filed by Anadarko and XTO, in which the companies contend that WTXP incorrectly claims they don’t have a direct interest in the proceeding. The companies note they filed their separate motions to intervene with sworn affidavits that they are potential shippers on the WTXP system. The companies say they became parties by operation of law on 10/10/17, and no one opposed their intervention, and WTXP only opposed the motions after the deadline and gave no reason.

[1] See, Shippers Respond to West Texas LPG Pipeline’s Opposition to Interventions, FR No. 3176, pp. 33-35.


Algonquin Files Settlement Extension with FERC in FRQ Filing Proceeding

December 5, 2017

Algonquin Gas Transmission LLC (RP18-75) on December 4, filed an extension of a 2013 fuel reimbursement quantity (FRQ) Settlement that established the allocation of fuel use and lost and unaccounted for gas (LAUF) among Algonquin’s customers.

The 2013 FRQ Settlement became effective on 2/1/14 for a term of four years, and was scheduled to expire on 1/31/18. Algonquin asks the Commission for a shortened comment period of December 14 on the settlement extension, and a reply comment deadline of December 19.

Algonquin says the extension is from 2/1/18 through 11/30/22, and includes a modification to the settlement to reflect a conforming change.

Algonquin filed a response November 24, to the protests of Repsol Energy North America Corp., BP Energy Co., and the New England Local Distribution Companies (New England LDCs),[1] to Algonquin’s annual FRQ filing.[2]

On November 29, the Commission issued an order accepting for filing and suspending Algonquin’s proposed fuel reimbursement percentages (FRPs) in the filing, to be effective 12/1/17, subject to refund and the outcome of a hearing. The Commission held the hearing in abeyance, and directed that a settlement judge be appointed.

The Commission determined that Algonquin’s proposal to increase its FRPs raised several issues that require further investigation. The Commission also determined that the protests of the filing raise additional issues of material fact.

The Commission said a hearing was the appropriate context for examining whether the methodology used to calculate the FRQ deferred account, or the allocation for incremental FRPs, was in accordance with Commission policy and will result in just and reasonable rates.

[1]  The New England LDCs include Bay State Gas Co. d/b/a Columbia Gas of Mass.; Conn. Natural Gas Corp.; Liberty Utilities (New England Natural Gas Co.) d/b/a Liberty Utilities; Middleborough Gas & Elec. Dept.; NSTAR Gas Co. d/b/a Eversource; N. Utilities, Inc.; City of Norwich, Dept. of Public Utilities; the S. Conn. Gas Co.; and Yankee Gas Services Co. d/b/a Eversource.
[2] See, FERC Directs Settlement Judge Appointment for Algonquin’s Annual FRQ Filing, FR No. 3176, pp. 23-25.


Badlands NGLs Asks FERC to Reject Alliance Rehearing Request; Consolidate Cases

December 6, 2017

Alliance Pipeline’s (RP15-1022; RP15-581) motion for expedited action on its rehearing request repeats stale claims that have already been rejected by the Commission, said Badlands NGLs LLC in a December 4 response to Alliance’s motion.

Badlands urges the Commission to reject Alliance’s motion because it raises no new issues and the evidentiary hearing should be allowed to proceed.

Alliance Canada Marketing LP filed an answer December 4, in support of Alliance Pipeline’s motion.

Also on December 4, Badlands filed a limited protest in Docket No. RP18-181, and requested that the proceeding be consolidated with Docket Nos. RP15-1022 and RP15-581, because the issues in RP18-181 are directly related to the issues in the other two dockets.

Badlands’ Arguments. Badlands argues that Alliance’s claim that the sole and exclusive processing arrangement it has with its affiliate, Aux Sable Liquids Products LP, is not anticompetitive or unduly discriminatory because the words “sole and exclusive” don’t appear in the restated heat content management agreement (HCMA) between Alliance and Aux Sable, misses the point because the effect of the agreement as written is an improper sole and exclusive processing arrangement with an affiliate.

Badlands also argues that Alliance‘s claim that the remand order exceeds the Commission’s authority is incorrect because contrary to Alliance’s faulty assumption, the Commission has jurisdiction over the extraction agreements since they involve the transportation of natural gas and not processing. Alliance also incorrectly claims that the Commission improperly sought to exercise jurisdiction over Alliance affiliate Alliance Canada, says Badlands, because any inquiry into gas processing on the Alliance system involves understanding the part Alliance Canada plays in the extraction agreements, which falls short of an exercise of jurisdiction by the Commission.

Badlands dismisses Alliance’s reliance on the Trailblazer[1] settlement options, saying Alliance misapplied the holdings in the cases.

Finally, Badlands says Alliance’s November 17 filing in RP18-181 to remove the words “sole and exclusive” from the definition of “extraction agreement” doesn’t eliminate the issue of affiliate abuse.

[1] See, Trailblazer Pipeline Co., 85 FERC 61,082 (1998) (Trailblazer I); Trailblazer Pipeline Co., 85 FERC 61,345 (Trailblazer II), order on reh’g, 87 FERC 61,110 (Trailblazer III), setting forth the conditions under which contested settlements may be approved by FERC.



These articles will appear as published in The Foster Report No. 3177, being issued on December 8, 2017

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