Infrastructure NGSA INGAA Petition for Rulemaking 11-22-05

The importance of sufficient pipeline infrastructure has been recognized frequently by the Commission and the industry. Many difficulties in maintaining this sufficiency have been encountered in recent years as a result of factors beyond the Commission’s control, such as the use by project opponents of statutes and post-certificate review processes that are not under the Commission’s jurisdiction. The Petitioners, however, have focused here on the regulatory process by which the Commission authorizes new facilities. Under the Commission’s goal of expediting the development of energy infrastructure projects, the Commission has stated that one of its objectives is to “(m)ake final decisions on proposed projects in a timely manner, consistent with statutory mandates and due process, and continue to seek improvements in the Commission’s processing of project applications.” Consistent with that objective, the intent of the Petitioners’ effort has been to determine whether major improvements are needed in the Commission’s certificate process and to identify regulatory factors that affect the ability of new pipeline projects to move forward from the formulation stage.

The Petitioners’ review has determined that there is little to be improved in the Commission’s processing of certificate applications once those applications have been filed. Steady improvement in certificate processing has occurred over the last several years. This petition focuses on the factors that affect the number and timing of projects, before applications are filed. All of our key recommendations relate to certainty of regulatory treatment, a critical factor when project sponsors and shippers attempt to reach the bilateral agreements that must support new facilities. Ultimately, the Petitioners arrived at five consensus proposals to enhance this certainty. Four pertain to the authorization of facilities by means of the Commission’s blanket facility rules. The fifth pertains to the predictability of regulatory treatment of rates agreed to in the transportation or precedent agreements used to attract the core of initial shippers necessary to support a new project.

Specifically, the Petitioners ask the Commission to allow the blanket authorization of certain mainline expansions, underground-storage enhancements, and takeaway facilities for liquefied natural gas. Next, the Petitioners request that the Commission initiate a process to establish the appropriate dollar limits for blanket facilities, based on updated project costs beyond the inflation that has been recognized in the Commission’s regulations. Last, the Petitioners request that the Commission clearly state that it will not be construed as undue discrimination under the Natural Gas Act to provide favorable rate treatment for the shippers who make a project financially possible.