Time to move away from old precedents in FERC pipeline reviews
Utility Dive, Nov. 19, 2019
Senior Advisor Susan Tierney has published an op-ed in Utility Dive recommending that the Federal Energy Regulatory Commission (FERC) update its 1999 Policy Statement on Certification of New Interstate Natural Gas Pipeline Facilities to end its reliance on “precedent agreements,” among other changes. Dr. Tierney, who is a former Assistant Secretary for Policy at the US Department of Energy, reviewed the more than 1,600 responses FERC received for its request for comment on its guidelines. While some commenters felt otherwise, Dr. Tierney concluded the arguments in favor of change were most compelling for economic, environmental, and reputational reasons.
Dr. Tierney noted that FERC has approved every gas pipeline project since 1999 that had at least one precedent agreement, which are prearranged agreements between pipeline developers and natural gas shippers who wish to purchase pipeline capacity. Since a precedent agreement indicates the private interests of two parties, not the “public convenience and necessity” required by the Natural Gas Act, it offers no proof that a new project is needed consistent with the public interest, according to Dr. Tierney. In the op-ed, Dr. Tierney calls on FERC to “administer a more fulsome review of project need” and offers other recommendations to ensure “the orderly development of plentiful supplies of natural gas at reasonable prices.”