The Federal Energy Regulatory Commission today approved two contentious East Coast gas pipelines proposed by TransCanada Corp., developer of the stalled Keystone XL oil project. FERC Chairman Norman Bay and Commissioners Cheryl LaFleur and Colette Honorable announced the approval of the $1.8 billion Leach XPress and Rayne XPress pipelines after a meeting that was webcast but otherwise closed for what the commission said were “public safety” concerns. Stan Chapman, TransCanada’s senior vice president, said in a statement the approval followed a “very thorough review.”
U.S. EPA had faulted FERC’s work on the Leach Xpress, calling its assessment of downstream greenhouse gas emissions “insufficient” and suggesting that the agency look at alternative routes and further environmental protections (Greenwire, Oct. 13, 2016). Today’s meeting, the last before President-elect Donald Trump’s inauguration, could end that dispute as EPA isn’t expected to push for deeper reviews of gas projects.
TransCanada said it plans to begin construction on both projects in February after it secures remaining regulatory approvals.
FERC also approved in a split vote a policy statement on electric storage resources seeking to recover investments through cost- and market-based rates. LaFleur was the lone dissenter on the policy statement, which says allowing electric storage resources to receive cost-based rate recovery concurrently with revenue from market-based services shouldn’t hurt its competitors.
LaFleur said she’s “very open” to compensating storage through cost-based rates, but she disagreed with how the policy is written. “I’m concerned about the broad rationale in the policy statement, which I believe is both flawed in its conclusion and premature in its timing,” she said.
The commission at the meeting also opened investigations into how much two pipeline companies — Natural Gas Pipeline Company of America LLC and Wyoming Interstate Co. LLC — are recouping from their customers. The agency wants to ensure rates charged to customers are fair under the Natural Gas Act.
FERC economist Seong-Kook Berry said the calculated return rates for the two companies suggests “the pipelines may be charging rates” that are no longer just and reasonable. “We do not prejudge, and we look forward to reviewing the findings,” Honorable said.
FERC’s decision to close the meeting to public participation and provide a live stream happened once before. In May, the commission closed its public meeting over fears of having its work obstructed by demonstrators. Bay then defended his decision to keep the public out, saying it wasn’t “made lightly” and was based on recommendations from law enforcement and FERC security staff (Greenwire, May 19, 2016). “The primary concern was preserving the safety of the public and staff,” Bay told about 50 agency employees and reporters. FERC spokeswoman Mary O’Driscoll said the decision on today’s meeting was “based on public safety consultation with the Federal Protective Service.”
Protesters opposed to hydraulic fracturing and the commission’s approval of gas pipelines, compressor stations, export terminals and other infrastructure broadcast protests outside FERC headquarters on Facebook. Margaret Flowers, a Maryland physician who has fought FERC’s approval of a gas export terminal in her state, said the agency’s decision to close the meeting to the public shows its “fear and lack of interest in hearing the views of people whose communities FERC threatens.”
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