Archive for the 'Pipeline Infrastructure' Category

Pipeline Safety Bill Unanimously Passed by Pennsylvania Senate – By Elizabeth Witmer, Esq.

The Pennsylvania Senate unanimously passed an amended version of Rep. Matt Baker’s bill, House Bill 344, on December 13, 2011. The bill now goes back to the Pennsylvania House for concurrence.

The bill as passed by the Senate grants the Pennsylvania Public Utility Commission the power to register, assess and inspect natural gas and hazardous liquids pipelines and facilities, but not those that are under the exclusive jurisdiction of the Federal Energy Regulatory Commission. The Commission may enact regulations, but those regulations “shall not be inconsistent with or greater or more stringent than the minimum standards and regulations adopted under the Federal Pipeline Safety Law.”

The bill does not address the siting of pipelines or pipeline facilities and specifically states that “[n]othing in this Act grants the Commission additional authority to determine or regulate a pipeline operator as a public utility as defined in 66 Pa.C.S. §102 (relating to definitions) or as a natural gas supplier or natural gas supply services as defined in 66 Pa. C.S. §2202 (relating to definitions).” The Commission has decided in at least one case that a midstream natural gas operator who provides services only to natural gas producers is a “public utility.” Although that application was eventually withdrawn by the operator, the Commission refused to rescind its order containing that decision. That question is on appeal to the Pennsylvania Commonwealth Court and is at issue in at least two other cases currently pending before the Commission.

For further information about the regulation of natural gas and hazardous liquids pipelines in Pennsylvania, whether regulated by the Federal Energy Regulatory Commission or the Pennsylvania Public Utility Commission, please contact Elizabeth Witmer.

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PUC Decisions – Laser Northeast Gathering

by Elizabeth U. Witmer, Esquire, Saul Ewing, LLP

The Pennsylvania PUC today issued an Order in response to two motions for reconsideration and one for clarification of its June 2011 order in Laser Northeast Gathering Company, LLC, Docket No. A-2010-2153371, which found that Laser, as a natural gas gathering/midstream pipeline, is a public utility, but remanded for further proceedings to determine whether a Certificate of public convenience and necessity should be issued. The PUC denied the reconsideration motions, but granted clarification. The clarification appears to be the articulation of a 4 part test used to determine Laser’s public utility status:
1. That Laser is a pipeline.
2. That Laser says it “will serve any and all potential customers needing to move gas through the pipeline system”
3. That Laser intends to use negotiated contracts with customers but that those contracts “are not meant to be exclusionary.”
4. That Laser “made a commitment to expand its capacity, as needed, to meet increased customer demand.”
The test is extremely broad, and appears to rely entirely on the stated intent of the applicant. The PUC noted, in a footnote, that “we wish to clarify that it is not the intent of the Commission to seek to exert jurisdiction over entities that provide services similar to Laser but do not fall under the definition of public utility service, which definition includes holding oneself out as being willing to serve the public” Nonetheless, the four factors identified by the PUC as being the test applied to Laser are so broad that they appear to include any pipeline which declares that it will serve any customers which will enter into a contract, so long as the pipeline indicates it is willing to expand the pipeline capacity to meet the customer’s demand. There was a strong dissent to the clarification Order by Commissioner James Cawley, who has published directed questions that he would like answered during the proceeding on remand on the question of whether Laser is entitled to a Certificate. There are now two other gathering/midstream pipeline cases currently before the PUC, and it appears that hearings will move forward in both.

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PUC Administrative Law Judge Recommends Denial of Public Utility Certificate for Marcellus Shale Midstream Pipeline

Judge Susan Colwell of the PUC yesterday (12/1/10) issued a Recommended Decision strongly recommending denial by the Commission of the application of Laser Northeast Gathering Company, LLC for certification as a public utility.  The 95 page Recommended Decision sets the stage for legislation on the issue of regulation of non-interstate pipelines in Pennsylvania. In the meantime, midstream and gathering lines in the Marcellus Shale region must be built without the advantage of eminent domain authority.  Several midstream pipelines intervened in the application and opposed the issuance of a Certificate.  For further information, contact Saul Ewing partner Elizabeth Witmer, ewitmer@nullsaul.com, http://www.saul.com/attorneys/bio.aspx?attID=298, who represented one of the intervenors in the action. 

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Saul Ewing’s Elizabeth Witmer Blogs from the Pennsylvania PUC Hearing on Pipeline Regulation April 22d

“Commissioner Cawley began the en banc hearing today on Marcellus Shale jurisdictional issues by announcing that there has been so much interest in providing testimony to the Commission that the PUC will hold a second en banc hearing at 1 pm on June 16.”

“Chairman Cawley, during his questioning of the first panel testifying today stated that the PUC is not interested in “building an empire”, a sentiment echoed by Commissioners Powelson and Gardner explicitly. Chairman Cawley continued that while he has an interest in license jurisdiction, to support more safety inspection, he has no interest in economic jurisdiction. He stated that the PUC has no desire to add to the more than 8000 public utilities in the state.”

Elizabeth U. Witmer Saul Ewing LLP

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