On May 10, 2017, FERC issued notice that FERC staff will convene a technical conference on June 29, 2017 on natural gas index liquidity and transparency. Specifically, the purpose of the technical conference is to (1) understand the state of liquidity in physical natural gas markets; (2) explore trends in physical gas trading and price reporting and how the use of natural gas indices have evolved over time; (3) obtain industry views on the confidence in natural gas indices and price formation; and (4) consider whether there is a need to improve natural gas market liquidity and price reporting and, if so, how. Continue Reading FERC to Convene Technical Conference on Natural Gas Index Liquidity and Transparency
On May 1, 2017, FERC filed a brief in the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) arguing for the dismissal of United Airlines Inc. and UPS Fuel Services Inc’s (together, “Shippers”) petition for review of a 2013 FERC order in which FERC allowed Enterprise TE Products Pipeline Company LLC (“Pipeline”) to discontinue its jet fuel and diesel fuel transportation service to various shipping entities, including Shippers. Shippers’ petition for review alleged that Pipeline’s termination of this service violated a 2013 settlement agreement (“Settlement Agreement”) requiring Pipeline to provide this service through May 31, 2015. FERC’s brief argued that the petition should be dismissed for lack of justiciability, or in the alternative, for lack of standing.
On March 23, 2017, a group of environmental advocates including the Allegheny Defense Project, Clean Air Council, and Sierra Club (“Environmental Petitioners”) filed a petition in the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) to review a FERC order issuing a certificate for a pipeline proposed by Transcontinental Gas Pipe Line Company (“Order Issuing Certificate”), despite FERC Staff having issued an order granting rehearing for further consideration (“Tolling Order”)—a mechanism frequently used by FERC to allow it more time to act on a request for rehearing beyond the 30 days it is statutorily allowed. Continue Reading In Petition to D.C. Circuit, Environmental Groups Claim FERC Staff “Tolling Order” on Request for Rehearing Invalid
On March 22, 2017, the U.S. District Court for the District of Columbia (“District Court”) dismissed a complaint by the Delaware Riverkeeper Network (“DRN”) alleging that its members had been deprived of constitutional due process because FERC is unable to make unbiased determinations on the issuance of natural gas pipeline certificates of public convenience and necessity (“CPCNs”). Specifically, DRN argued that because FERC’s funding mechanism requires FERC to recover its budget through a charge to regulated natural gas companies, it has a pro-industry bias. Continue Reading Federal District Court Dismisses Suit Accusing FERC of Pro-Industry Bias
On February 28, 2017 FERC Staff released their Energy Infrastructure Update for January 2017. In these monthly reports, Staff provides updates on various projects in the natural gas, hydropower, electricity generation, and electricity transmission sectors. Continue Reading FERC Staff Issues Energy Infrastructure Update for January 2017
On July 11, 2016, FERC imposed fines on BP America Inc., BP Corporation North America Inc., BP America Production Company, and BP Energy Company (collectively, “BP”) of over $20 million in civil monetary penalties, and disgorgement of over $200,000 in profits, for manipulating natural gas prices by, FERC found, uneconomically trading physical natural gas at the Houston Ship Channel to benefit BP’s financial spread positions based on the price differential between the Houston Ship Channel and the Henry Hub. Continue Reading FERC Upholds ALJ’s Finding of Natural Gas Market Manipulation and Fines BP Entities
On June 16, 2016, FERC affirmed its process outlined in Opinion No. 538 for analyzing whether natural gas storage companies lack significant market power for the purposes of determining whether to grant market-based rate (“MBR”) authority for natural gas storage service. However, FERC clarified that the burden to show lack of control over an affiliate rests with the applicant. Continue Reading FERC Largely Upholds Market Power Analysis for Market-Based Rate Authority for Natural Gas Storage Service
On June 1, 2016, FERC granted in part and denied in part National Fuel Gas Supply Corporation’s (“National Fuel’s”) request for rehearing regarding its request to expand the reservoir and buffer boundaries of its Beech Hill Complex natural gas storage facility. In its initial order, issued December 17, 2015, the Commission stated that it “grants jurisdictional storage field operators additional certificate authority to revise the boundaries of storage fields when the applicant can demonstrate, with engineering and geological data, that such authorization is required . . . to improve the operation of a storage field or to maintain its integrity.” In its June 1 rehearing order, the Commission found geochemical data and evidence of hydraulic connections to be persuasive evidence that gas was migrating, discounted theories based on seismic evidence, and observed that “[w]hile geochemical data is not always required to support expansion of certificated boundaries, it is highly persuasive.” Continue Reading FERC Notes “Highly Persuasive” Nature of Geochemical Data, Discounts Seismic Data, in Considering Request to Expand Natural Gas Storage Reservoir and Claims of Gas Migration