On Jan. 12, the Federal Energy Regulatory Commission (FERC) issued data requests to four interstate pipelines that are proposing incremental recourse rates in pending Natural Gas Act (NGA) Section 7 certificate applications.1 This action was significant because it appears to be FERC’s first step toward responding to tax law changes in the Law to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018, also known as the Tax Cuts and Jobs Act of 2017 (2017 Tax Act).
FERC permits pipelines and public utilities to recover their actual or potential tax expenses in their regulated rates. The 2017 Tax Act reduces the corporate tax rate to 21 percent and allows certain investments to receive bonus depreciation treatment. FERC asked each pipeline to 1) explain how the 2017 Tax Act impacts its proposed project cost of service and the resulting initial recourse rate proposal; 2) provide an adjusted cost of service and recalculated initial incremental recourse rates; and 3) provide all supporting work papers and formulas.2 (more…)
Topics discussed this week include:
- Environmental group brings Clean Water Act citizen suit against Shell and Motiva that alleges climate change-related harms.
- District court stays CERCLA unilateral administrative order.
- District court overturns Department of the Interior stay of rule governing royalties for oil, natural gas and coal production on federal and Indian lands.
- Second Circuit upholds New York State’s decision to deny Clean Water Act certification to proposed pipeline.
- C. Circuit holds that FERC should consider power plant emissions in pipeline environmental impact statement.
- Hurricane Harvey affects Gulf Coast energy and chemical resources.
In a 2-1 decision that issued today, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) in Sierra Club et. al v. Federal Energy Regulatory Commission (Sierra Club) vacated and remanded a Natural Gas Act (NGA) Section 7 certificate of public convenience and necessity granted by the Federal Energy Regulatory Commission (FERC) to the Southeast Market Pipelines Project (Project) in 2016. The Project comprises three natural gas pipelines currently under construction in Alabama, Georgia, and Florida that, once built, will transport over 1 billion cubic feet of natural gas per day over 500 miles to feed new and existing natural gas-fired electric plants in Florida and to serve the growing natural gas demand of Florida utility customers. (more…)
On July 19, 2017, the U.S. House of Representatives passed a pair of bills aimed at reforming natural gas and oil pipeline permitting, and granting additional authority to the Federal Energy Regulatory Commission (“FERC”). Both bills passed on largely party-line votes. The two bills are H.R. 2883, Promoting Cross-Border Energy Infrastructure Act, and H.R. 2910, Promoting Interagency Coordination for Review of Natural Gas Pipelines Act. H.R. 2883, removes the current requirement that gas and oil pipelines, as well as electric transmission projects, obtain a Presidential Permit to cross an international border. Instead, pipelines would obtain a certificate of crossing from FERC and transmission projects would obtain such a certificate from the Department of Energy. If enacted into law, this change would mark a significant change for oil pipeline projects. FERC currently has no authority over any aspect of interstate oil pipeline siting. Currently, all siting decisions not on federal lands are handled at the state level, with international border crossings overseen by the State Department through the presidential permit process. FERC does, however, oversee the siting of interstate natural gas pipelines, including Presidential Permits for international border crossings, under current law.