Natural Gas Committee
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FINAL 11/14/18 REPORT OF THE NATURAL GAS COMMITTEE This report summarizes policy developments and legal decisions that oc- curred at the Federal Energy Regulatory Commission (FERC or the Commission), the Pipeline and Hazardous Materials Safety Administration (PHMSA), and the United States Courts of Appeals in natural gas regulation from July 1, 2017, to June 30, 2018.* I. Rulemaking Actions ........................................................................... 3 A. Revised Policy Statement on Treatment of Income Taxes.......... 3 B. Notice of Proposed Rulemaking, Rate Changes Relating to the Federal Income Tax Rate - Interstate and Intrastate Natural Gas Pipelines; Rate Changes Relating to Federal Income Tax Rate ............................................................................................. 5 C. Notice of Inquiry, Process for Certification of New Natural Gas Transportation Facilities ...................................................... 5 II. Rates, Terms, and Conditions of Service ........................................... 6 A. Abandonment .............................................................................. 6 1. Tres Palacios Gas Storage L.L.C. .......................................... 6 2. Kinetica Deepwater Express, L.L.C. ..................................... 7 3. High Island Offshore System, L.L.C. .................................... 7 4. Peregrine Oil & Gas II, L.L.C. v. Texas Eastern Transmission, L.P. ................................................................. 8 5. Questar Southern Trails Pipeline Co. & Navajo Tribal Utility Authority .................................................................... 8 B. Capacity Release ......................................................................... 9 1. NEXUS Gas Transmission, L.L.C. ....................................... 9 2. Natural Gas Pipeline Company of America, L.L.C. .............. 9 3. Texas Gas Transmission, L.L.C. ......................................... 10 4. Midcontinent Express Pipeline L.L.C. ................................ 11 a. Capacity Release Letter Orders .................................... 11 1. Temporary Waivers for Corporate Restructuring .. 11 C. Cost Trackers ............................................................................ 12 1. National Fuel Gas Supply Corp. .......................................... 12 2. High Island Offshore System, L.L.C. .................................. 13 D. Discount Adjustments for Negotiated Rate Agreements .......... 13 E. Fuel............................................................................................ 15 1. Viking Gas Transmission Company .................................... 15 2. Tennessee Gas Pipeline Company, L.L.C. .......................... 15 3. Paiute Pipeline Company .................................................... 15 4. Nautilus Pipeline Company, L.L.C. .................................... 15 * The Natural Gas Committee is grateful to the following individuals for their contributions to this report: Lawrence Acker, Monique Watson, Emily Mallen, Joseph R. Hicks, Ammaar Joya, Natalie Karas, Jerrod L. Harrison, Randall S. Rich, Robert Ballentine, John P. Perkins, III, Joseph B. Williams, Janna Chesno, George Flugard, and Kevin Frank. 1 2 ENERGY LAW JOURNAL [Vol. 39:2 5. Rockies Express Pipeline LLC ............................................ 16 6. ANR Pipeline Company ...................................................... 16 7. Ruby Pipeline L.L.C. ........................................................... 16 8. Kinetica Energy Express, LLC ............................................ 16 F. Gas Quality ............................................................................... 17 1. Texas Gas Transmission, L.L.C. ......................................... 17 2. Southern Star Central Gas Pipeline, Inc. ............................. 17 G. Incremental Pricing ................................................................... 17 1. Gulf South Pipeline Company, L.P. .................................... 17 2. Dominion Energy Cove Point LNG, L.P. ............................ 18 3. Texas Eastern Transmission, L.P. ....................................... 19 4. Eastern Shore Natural Gas Co. ............................................ 20 5. Transcontinental Gas Pipe Line Corp. ................................. 20 6. Mountain Valley Pipeline, L.L.C. ....................................... 20 H. Jurisdiction ................................................................................ 21 1. City of Clarksville v. FERC ................................................ 21 2. Kinetica Deepwater Express, L.L.C. ................................... 22 3. Valley Crossing Pipeline, L.L.C.......................................... 23 4. Total Gas & Power North America, Inc. v. FERC .............. 23 I. Market-Based Rates .................................................................. 24 1. Arlington Storage Co., L.L.C. ............................................. 24 2. Jefferson Island Storage & Hub, L.L.C., Golden Trial Storage, Inc. ......................................................................... 25 3. Worsham-Steed Gas Storage, L.L.C. .................................. 25 4. East Cheyanne Gas Storage, L.L.C. .................................... 26 J. New Services ............................................................................. 26 K. Open Seasons ............................................................................ 28 L. Pressure Commitments.............................................................. 29 M. Rate Cases ................................................................................. 30 1. Cameron Interstate Pipeline, L.L.C. .................................... 30 2. Dominion Cove Point LNG, L.P. ........................................ 30 3. Eastern Shore Natural Gas Company .................................. 30 4. Granite State Gas Transmission, Inc. .................................. 30 5. Great Lakes Gas Transmission Limited Partnership ........... 31 6. MoGas Pipeline L.L.C. ........................................................ 31 7. Northern Border Pipeline Company .................................... 31 8. Southern Natural Gas Company, L.L.C. ............................. 32 N. Rate Investigations .................................................................... 32 1. Dominion Energy Overthrust Pipeline, L.L.C. .................... 32 2. Midwestern Gas Transmission Company ............................ 33 3. Natural Gas Pipeline Company of America L.L.C. ............. 33 4. Wyoming Interstate Company, L.L.C. ................................ 33 O. Reservation Charge Credits ....................................................... 34 1. Atlantic Coast Pipeline, L.L.C. ........................................... 34 2. American Midstream (AlaTenn), L.L.C. ............................. 34 3. PennEast Pipeline Co. ......................................................... 35 4. Equitrans, L.P. ..................................................................... 35 5. Saltville Gas Storage Company, L.L.C. .............................. 36 2018] NATURAL GAS COMMITTEE 3 P. Scheduling ................................................................................. 36 1. Atlantic Coast Pipeline, L.L.C. ........................................... 36 2. Gas Transmission Northwest L.L.C. ................................... 36 3. Kinetica Energy Express, L.L.C. ......................................... 37 4. PennEast Pipeline Co. ......................................................... 37 Q. Termination ............................................................................... 38 1. Algonquin Gas Transmission, L.L.C. .................................. 38 2. Texas Gas Transmission, L.L.C. ......................................... 38 3. Dominion Cove Point LNG, L.P. ........................................ 39 4. Dominion Transmission, Inc. .............................................. 40 R. Force Majeure ........................................................................... 41 1. Peregrine Oil & Gas II, L.L.C. v. Texas Eastern Transmission, L.P. ............................................................... 41 2. Atlantic Coast Pipeline, L.L.C. ........................................... 42 3. PennEast Pipeline Company, L.L.C. ................................... 43 4. American Midstream (AlaTenn), L.L.C. ............................. 44 5. Saltville Gas Storage Co. ..................................................... 45 III. Infrastructure .................................................................................... 46 A. Pipelines .................................................................................... 46 1. Sierra Club v. FERC ............................................................ 46 2. Adorers of the Blood of Christ v. FERC ............................. 47 3. New York State Dep’t of Environmental Conservation v. FERC ................................................................................... 47 4. NEXUS Gas Transmission, L.L.C. ..................................... 48 5. Mountain Valley Pipeline, L.L.C. ....................................... 49 6. Transcontinental Gas Pipe Line Co. .................................... 49 7. Florida Southeast Connection, L.L.C. ................................. 50 8. DTE Midstream Appalachia, L.L.C. ................................... 50 9. Dominion Transmission, Inc. .............................................. 51