Tag Archives: FERC

After Three Years, PennEast Pipeline Approved by Federal Energy Regulatory Commission, Construction to Begin

FERCThe Federal Energy Regulatory Commission (FERC) issued an Order under section 7(c) of the Natural Gas Act approving construction of the PennEast Pipeline.

PennEast Pipeline Logo

Anthony Cox, Chair of the PennEast Pipeline Company LLC Board of Managers said “They will reap the benefits of accessing one of the most affordable and abundant supplies of natural gas in all of North America. PennEast will lower gas and electricity costs, increase reliability, improve air quality, and make the region more competitive for jobs in the coming decades.”

The approximately 120-mile pipeline route begins in the Marcellus Shale production area near Dallas, Pennsylvania, and connects with the existing underground Transcontinental Pipeline near Pennington, New Jersey. The route includes 24 municipalities in Pennsylvania and six in New Jersey.

Access to additional natural gas supplies via PennEast Pipeline should reduce the cost of gas in eastern Pennsylvania and New Jersey, even during non-peak periods. Natural gas prices in the market areas worsen during periods of peak demand, such as the sustained recent cold snap, where natural gas prices spiked 31 times higher in New Jersey than supplies in the Pennsylvania production areas. This is due to pipeline constraints and inadequate supply to meet demand.

Since 2005, natural gas use has more than doubled in New Jersey and increased five-fold in Pennsylvania for electric generation. As a result, carbon emissions are dropping to their lowest level in nearly three decades while air quality has improved across the region. A diverse fuel supply and the reliability of the electric grid are the primary reasons PJM Interconnection, the largest electric grid operator in the world, cited in an October 2016 report to FERC that the PennEast Pipeline is needed for grid reliability.

FERC issued its Draft Environmental Impact Statement (EIS) first under the Obama Administration in July 2016, and finalized its recommendations after nearly nine months of additional public input. The Final EIS in April 2017 affirmed that construction and operation of the PennEast Pipeline would have minimal environmental impact, which would be reduced to “less than significant levels” with PennEast’s and FERC’s mitigation measures.  The Pennsylvania Department of Environmental Protection under Democrat Governor Tom Wolf issued its 401 Water Quality Certification in February, and in May, the United States Environmental Protection Agency Region 3 added that the Final EIS included “improved safeguards for the protection of human health and the environment.”

Additionally, the PennEast Pipeline Company updated its estimated in-service date to 2019, with construction still beginning in 2018. The original project timeline allowed for many variables, though did not anticipate the many months without a voting quorum at FERC.

“In the coming days, we will work to finalize fair and positive compensation agreements with landowners,” added Cox. “In the weeks ahead, survey crews will collect remaining field data in support of our permit applications to ensure minimal environmental and community impact. We look forward to continuing our work with state, bi-state and regional permitting agencies and expect those permit reviews to be conducted on the merits of the application, without outside interference.”

If you or your business have questions regarding energy law or real estate law, including right of way and easement negotiations, condemnations or eminent domain, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.


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Pennsylvania’s Powelson to Join FERC from PaPUC


President Donald J. Trump announced May 8, 2017 his intent to nominate the following individuals to key positions in his Administration:

Neil Chatterjee of Kentucky to be a Member of the Federal Energy Regulatory Commission for the term expiring June 30, 2021. Mr. Chatterjee is energy policy advisor to United States Senate Majority Leader Mitch McConnell of Kentucky. Over the years he has played an integral role in the passage of major energy, highway, and farm legislation. Prior to serving Leader McConnell, he worked as a Principal in Government Relations for the National Rural Electric Cooperative Association and as an aide to House Republican Conference Chairwoman Deborah Pryce of Ohio. He began his career in Washington, DC, with the House Committee on Ways and Means. A Lexington, Kentucky native, he is a graduate of St. Lawrence University and the University of Cincinnati College of Law.

powelsonRobert F. Powelson of Pennsylvania to be a Member of the Federal Energy Regulatory Commission for the term expiring June 30, 2020. Commissioner Powelson has served as a Commissioner on the Pennsylvania Public Utility Commission (PUC) since 2008. Commissioner Powelson was first nominated to the PUC on June 19, 2008, by Governor Edward G. Rendell and appointed Chairman by Governor Tom Corbett in 2011. Currently, Commissioner Powelson serves as the President of National Association of Regulatory Utility Commissioners (NARUC) based in Washington, DC. Commissioner Powelson serves on the Electric Power Research Institute Advisory Board (EPRI) as well as the Drexel University Board of Trustees. From 1994 to 2008, Powelson served as the President and CEO of the Chester County Chamber of Business and Industry based in Malvern, PA. In 2005, he was selected by the Eisenhower Presidential Fellow to be a United States fellow in Singapore and Australia. Commissioner Powelson holds a Bachelor of Administration from St. Joseph’s University and a Master of Governmental Administration with a concentration in public finance from the University of Pennsylvania.

Prince Law Offices, P.C. congratulates Commissioner Powelson.  To learn how Prince Law Offices, P.C. can assist you or your business with real estate, business, FERC, or PUC matters, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.

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U.S. Supreme Court Upholds FERC’s Demand Response Rule, Order No. 745

On January 25, 2016, the U.S. Supreme Court reversed the D.C. Circuit’s May 2014 ruling inSCOTUS EPSA v. FERC and instead upheld the Federal Energy Regulatory Commission’s (FERC) demand response rule, Order No. 745, thereby affirming FERC’s jurisdiction to regulate FERCwholesale markets. FERC issued Order No. 745 with the aim of encouraging participation of demand resources – generally industrial and other large energy users that can reduce or forego energy consumption during certain periods – in wholesale markets administered by FERC by allowing such demand resources to bid their reduced energy consumption for compensation at the same price and in the same markets as generating resources.

Several Independent Power Producers (IPPs), which compete directly with demand resources under Order No. 745, led by the Electric Power Supply Association (EPSA), EPSAchallenged FERC’s Order No. 745 on the grounds that a FERC-supervised demand response market necessarily intruded into the area of retail rate regulation, which is exclusively the jurisdiction of the states. EPSA prevailed at the D.C. Circuit, which rejected FERC’s Order No. 745 in a decision issued on May 27, 2014. By a 6-2 majority (Justice Alito did not participate), the Supreme Court overturned the D.C. Circuit. The Court’s opinion, authored by Justice Kagan, validated Order No. 745, concluding that FERC acted within its authority. Specifically, Court found that:

  • Order No. 745 easily meets the Federal Power Act (FPA) standard of being a practice that “directly affects wholesale rates” because compensating demand resources necessarily lowers wholesale electricity prices. Slip Op. at 14-17;
  • Order No. 745 does not regulate retail sales, even though it may affect the quantity or terms of retail sales. The Court reasons that wholesale energy transactions of many varieties have consequences at the retail level without legal consequence. Moreover, FERC had taken care not trample on state regulatory authority, evidenced by the fact that FERC’s demand response regime permits retail purchasers to participate in wholesale markets only if the state regulators do not forbid them from doing so. Slip Op. at 17-25.
  • EPSA’s position would subvert the FPA by rendering the entire practice of wholesale demand response outside of FERC’s jurisdiction, as well as outside the authority of states to regulate. The effect of such a vacuum of regulatory jurisdiction would halt a practice that enables FERC to fulfill its statutory duty to hold down wholesale prices and enhance reliability. Slip Op. at 25-29.
  • FERC decision to compensate demand resources at the same Locational Marginal Price (LMP) that is paid to generating resources was a reasonable one. Slip Op. at 29-33.

There was a dissent by Justice Scalia, joined by Justice Thomas, which was premised upon seeing the case through a different lens. His analysis started with determining whether sales of demand response (DR) involved wholesale sales of electricity. Since demand response is non consumption, Justice Scalia argues that FERC is without jurisdiction to regulate it, directly or indirectly. This was essentially the position of the majority of the D.C. Circuit panel below, which was rejected by the Court majority. The dissent also quarreled with the economic analysis in the majority opinion, although it is unclear how that disagreement relates to the majority’ underlying premise.

The Supreme Court’s decision in FERC v. Electric Power Supply Assn may be found here.

If you or your business have questions regarding energy law, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.

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PennEast Submits Application To FERC For PA to NJ Pipeline

Today, September 24, 2015, PennEast Pipeline Co, LLC, located in Wyomissing, PA, said it is submitting its application to the Federal Energy Regulatory Commission (FERC) for a permit to proceed with construction of the proposed about $1 billion PennEast Pipeline that will offer natural gas to consumers in Pennsylvania and New Jersey. 

PennEast is requesting that FERC issue a Certificate of Public Convenience and Necessity, which would authorize PennEast to construct, install, own, operate and maintain the 118-mile, 36-inch diameter PennEast Pipeline.

Upon completion, the underground natural gas pipeline would deliver about 1 billion cubic feet of natural gas per day and address the current pipeline constraints that result in higher costs, increased price volatility and reduced reliable energy supplies for consumers.

Pending regulatory approval and issuance of a FERC certificate, PennEast anticipates beginning construction in 2017.

It is not yet clear if PennEast intends to seek to utilize condemnation to secure property rights.

The PennEast Pipeline partners are AGL Resources; NJR Pipeline Co; PSEG Power LLC; SJI Midstream; Spectra Energy Partners and UGI Energy Services form the PennEast Pipeline Co. UGI Energy Services serves as the project manager and would be the operator of the proposed PennEast Pipeline.

If you or your business have questions regarding energy law or real estate law, contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C.

The current proposed route is below:

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PJM and Gas Pipelines Coordinate to Fuel Electric Power Plants

PJM Interconnection and several large interstate natural gas pipelines that provide fuel for electric generators in the PJM footprint, which includes Pennsylvania, have signed a memorandum of understanding spelling out coordination efforts to promote reliability. They have agreed to work more closely with each other to improve operational planning and address growing interdependence between the electric and natural gas industries.

“This agreement sets the stage for greater coordination between electric generators and the natural gas pipeline industry” said Mike Kormos, PJM Chief Operations Officer.  “As electricity-generating facilities increasingly turn to natural gas, it is important that we all communicate clearly to assure reliable service.”

PJM Interconnection – a regional transmission organization that coordinates wholesale electricity for 13 states and the District of Columbia – and several large natural gas pipelines that provide fuel for electric power generators in the PJM footprint have agreed to work more closely with each other to improve operational planning and address growing interdependence between the electric and natural gas industries.  “These individual pipeline companies and PJM are to be commended for taking the initiative to create a process to promote greater transparency and shared knowledge. Continued dialogue will result in more informed decisions by the PJM market participants that operate and rely upon gas-fired electric generators,” said Don Santa, president and CEO of the Interstate Natural Gas Association of America. The intent of the agreement is to provide a better understanding of the needs of gas-fired generators and work toward providing reliable and flexible solutions that promote adequate natural gas pipeline capacity.

In addition to the PJM Interconnection, parties to the coordination effort include Dominion Cove Point LNG, LP; Dominion Transmission, Inc.; Columbia Gas Transmission LLC; National Fuel Gas Supply Corporation; Natural Gas Pipeline Company of America; Tennessee Gas Pipeline Company, L.L.C.; Texas Eastern Transmission, LP; Texas Gas Transmission, LLC; and Transcontinental Gas Pipe Line Company, LLC. The parties are also in consultation with the Independent Market Monitor, Monitoring Analytics. As permitted by the Federal Energy Regulatory Commission Order No. 787, PJM and the participating pipeline companies plan to share certain non-public information to promote reliable service and improved operational planning for both the electric grid and the interstate natural gas pipeline network. The initial effort will continue through June 2016, and will be evaluated for next steps. The parties expect to communicate their progress and any insights that emerge from this continued dialogue to the FERC and other interested stakeholders.

Contact attorney Jeffrey A. Franklin at Prince Law Offices, P.C. for more information or assistance with electric and gas matters.

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