APGA Weekly Update, May 26, 2016

Transcription

1 FERC Extends Jurisdiction to Municipal Gas System APGA Weekly Update, May 26, 2016 The Federal Energy Regulatory Commission (FERC) has denied a rehearing request by the City of Clarksville, Tenn., of a 2014 order in which FERC ruled that the city would be subject to Natural Gas Act (NGA) jurisdiction for a sale of gas to another local distribution company (LDC) that took place entirely in Tennessee. The sale was to the city of Guthrie, Ky., in Tennessee. Guthrie then transported the gas across the Tennessee-Kentucky border for use in Guthrie s distribution system. Clarksville argued that the ruling of the prior order was inconsistent with numerous FERC precedents over the years in which FERC ruled that a municipality that sold or transported gas entirely within its state of origin was not subject to NGA jurisdiction. FERC did not dispute its numerous precedents but found them overly expansive if it would allow a municipality to avoid NGA jurisdiction over the transportation and sale of gas for consumption in other states, because such an interpretation would create a regulatory gap. FERC essentially ruled that it needed to extend its jurisdiction over the sale to fill a regulatory gap because the state of Tennessee could not regulate the transportation and sale of any gas that eventually crossed state lines. FERC sought to bolster its case by citation to court decisions which, according to FERC, allowed it to regulate municipal transactions that are part of an interstate flow of gas. It also told its staff to investigate whether Guthrie required a certificate. This order is another step in FERC s efforts to regulate municipal transactions which, in FERC s judgment, are in interstate commerce. In Order No. 636, FERC asserted jurisdiction over the release of pipeline capacity controlled by a municipality. In a 2002 order, FERC ruled that it had NGA jurisdiction over a municipality where it transported gas outside its state of origin. The recent FERC ruling over Clarksville raises the specter that the agency will seek to extend its regulation to other municipal transactions whenever it determines that it is part of the flow of gas in interstate commerce. The APGA Regulatory Subcommittee discussed this issue on its May 23 conference call and it was agreed that the next step would be to survey APGA members to determine the member-wide impact of this FERC action. For questions on this article, please contact Dave Schryver of APGA staff by phone at or by at dschryver@apga.org. House Names Energy Legislation Conferees On May 26, the House of Representatives named conferees for the House-Senate Conference Committee to resolve differences between the House and Senate-passed versions of comprehensive energy legislation. House Republicans named 24 conferees and Democrats named 16 conferees. The list is below. The Senate has yet to name its conferees. Congress will be out for a Memorial Day recess, it remains unclear and perhaps unlikely that the House and Senate will be able to complete the conference committee prior to the summer recess beginning July 16. APGA will be following up with its members

2 located in the congressional districts of the conferees in terms of communicating APGA s priority energy bill issues for conference committee. Republican Conferees Energy and Commerce Committee: Chairman Fred Upton (MI) Rep. Joe Barton (TX) Rep. Ed Whitfield (KY) Rep. John Shimkus (IL) Rep. Robert Latta (OH) Rep. Cathy McMorris Rodgers (WA) Rep. Pete Olson (TX) Rep. David McKinley (WV) Rep. Mike Pompeo (KS) Rep. Morgan Griffith (VA) Rep. Bill Johnson (OH) Rep. Bill Flores (TX) Rep. Markwayne Mullin (OK) Natural Resources Committee: Chairman Rob Bishop (UT) Rep. Don Young (AK) Rep. Cynthia Lummis (WY) Rep. Jeff Denham (CA) Rep. Bruce Westerman (AR) Science, Space, and Technology Committee: Chairman Lamar Smith (TX) Rep. Randy Weber (TX) Agriculture Committee Chairman Mike Conaway (TX) Rep. Glenn Thompson (PA) Transportation and Infrastructure Committee: Rep. Cresent Hardy (NV) Rep. Lee Zeldin (NY) Democrat Conferees

3 Energy and Commerce Committee: Frank Pallone (N.J.) Bobby Rush (Ill.) Lois Capps (Calif.) Doris Matsui (Calif.), Kathy Castor (Fla.) John Sarbanes (Md.) Peter Welch (Vt.) Ben Ray Luján (N.M.) Paul Tonko (N.Y.) Dave Loebsack (Iowa) Natural Resources Committee: Raúl Grijalva (Ariz.) Jared Huffman (Calif.) Debbie Dingell (Mich.) Agriculture Committee: Collin Peterson (Minn.) Science, Space, and Technology Committee: Eddie Bernice Johnson (Texas) Transportation and Infrastructure Committee: Peter DeFazio (Ore.) For questions on this article, please contact Dan Lapato of APGA staff by phone at or by at Plastic Pipe Database Committee Releases Report on Plastic Pipe Performance On May 26, the Plastic Pipe Database Committee (PPDC) released the latest update on in-service failures of plastic pipe and components. The PPDC is composed of representatives from APGA, the American Gas Association (AGA), Plastics Pipe Institute (PPI), National Association of Regulatory Utility Commissioners (NARUC), National Association of Pipeline Safety Representatives (NAPSR), National Transportation Safety Board (NTSB) and U.S. Department of Transportation s (DOT) Pipeline and Hazardous Materials Safety Administration (PHMSA). For the past 16 years, the PPDC has been receiving information on inservice plastic piping system failures and/or leaks with the objective of identifying possible performance issues. Company participation in this initiative is voluntary. Matt Stennett of Middle Tennessee Natural

4 Gas and Jon Mason of Chambersburg, Penn., represent APGA on the PPDC. The full report can be found here. The purpose of the PPDC data collection and analysis is to identify possible problems with plastic pipe and components such as the brittle failures that occurred with Century Utility Products polyethylene (PE) pipe produced from 1970 through 1974, Aldyl A PE pipe manufactured from 1970 through 1972 and pipe manufactured from PE 3306 resin. No additional problem materials were identified in the latest report. The PPDC effort has proven invaluable in maintaining confidence in the continued safe use of plastic pipe in distribution piping. APGA strongly encourages all members to voluntarily submit data to the PPDC. Even if a utility has had no plastic pipe failures, that information is crucial to the effort. For information on the PPDC, go to For questions on this article, please contact John Erickson of APGA staff by phone at or by at jerickson@apga.org. APGA, NGVAmerica, and AGA Kick Off the CNG from Sea to Shining Sea Rally On May 30, APGA, NGVAmerica, and the American Gas Association s (AGA) CNG from Sea to Shining Sea road rally will kick off thanks to the hard work of the participants and the generous support of 44 sponsor organizations. APGA s Natural Gas Vehicle (NGV) Committee Chairman Pat Riley, General Manager of Gibson County Utility District, and Mike Kearns, Energy Services Manager for the City of Richmond s Department of Public Utilities, will begin their cross country, CNG-only journey in their respective vehicles with a rally in Long Beach, Calif. From there, they will make an additional 12 stops for rallies across the country, with the final one in Washington, D.C. The locations of each stop are: Long Beach, CA Mesa, AZ Albuquerque, NM Oklahoma City, OK Little Rock, AR Memphis, TN Trenton, TN Dickson, TN Sevierville, TN Rock Hill, SC

5 Greenville, NC Richmond, VA Washington, DC The mission of this road rally is to inform and educate the American public on the benefits of NGVs and natural gas fueling infrastructure through local, state, and national media outlets. This rally will demonstrate the viability and vibrancy of the domestic NGV market and shows that NGVs can travel across the nation as there are already adequate refueling stations to make this trip a reality. You can follow the progress of the rally and view photos from the events on the CNG from Sea to Shining Sea Facebook page. For questions on this article, please contact Scott Morrison of APGA staff by phone at or by at smorrison@apga.org. APGA Files Comments with the IRS on Definition of a Political Subdivision On May 23, APGA filed comments with the Internal Revenue Service (IRS) in response to proposed regulations that would establish a new definition of Political Subdivision. This regulation is significant as an entity that is not a political subdivision cannot issue tax-exempt bonds. The proposed regulation would add two new tests a governmental or public purpose test and a governmental control test in the determination of whether an entity is a political subdivision and all three tests (the two new tests and the original one) must be met for an entity to qualify as a political subdivision. APGA is concerned that the proposed rule could terminate the status of scores of public natural gas distribution systems and their joint action gas supply agencies as political subdivisions for purposes of issuing tax-exempt bonds. In its comments, APGA expresses opposition to the proposed rule and urges the IRS to withdraw it. The comments also communicate that APGA members depend on access to tax-exempt funding for the construction of necessary infrastructure to ensure their ability to continue to provide safe and reliable natural gas service in their communities and to acquire long-term gas supplies at reasonable and competitive prices for the benefit of the consumers they serve. The comments further state that while some APGA members have all three of the sovereign powers (taxation, eminent domain, and police) and therefore meet the governmental control test, others do not and this proposed rule would deny many public natural gas systems and joint action agencies the ability to issue tax-exempt bonds despite those entities meeting every reasonable standard of providing a public benefit under powers expressly granted by the people of the states through their elected representatives. A copy of the comments filed with the IRS is available on the APGA website at APGA also asked its members to submit letters to the IRS communicating their own individual concerns while expressing support for APGA s comments and many APGA members did so. The IRS has scheduled a public hearing on the proposed rule for June 6 and APGA has requested an opportunity to make a public statement at the hearing. For questions on this article, please contact Dave Schryver of APGA staff by phone at or by at dschryver@apga.org.

6 APGA Board Recognizes Jeff Weise At its May 2 meeting, the APGA Board of Directors voted to present Jeff Wiese, the Pipeline and Hazardous Materials Safety Administration s (PHMSA) Associate Administrator for Pipeline Safety, with a Special Recognition Award in honor and recognition of his exceptional contributions and devoted dedication over a lifetime to advance and improve the level of safety of America s pipeline industry. Jeff had been with PHMSA for the past 16 years and in the federal government for 32 years. On May 1, he left PHMSA to pursue other opportunities. He managed PHMSA's safety program for the nation's 2.6 million miles of natural gas and hazardous liquid pipelines during a period of rapid transformation, and directed major new policy initiatives, including the design, development, and deployment of integrity management oversight and public awareness programs. He was also instrumental in building the framework for the Common Ground Alliance, which works to prevent underground utility damage. Prior to working for PHMSA Jeff was with the Minerals Management Service. Jeff has appeared at many APGA events and worked closely with APGA s leadership. He was also instrumental in arranging for PHMSA to provide financial support for the APGA Security and Integrity Foundation (SIF). APGA and the SIF thank Jeff for his support as Associate Administrator and wish him all the best in his future career. PHMSA has named Alan Mayberry as Interim Associate Administrator for Pipeline Safety while the search for a permanent replacement proceeds. For questions on this article, please contact John Erickson of APGA staff by phone at or by at jerickson@apga.org. APGA Look Closer Calendars Now Available! The 2017 Look Closer calendars are now available for ordering. These calendars were developed by Crabtree Ink and use the themes from the APGA Look Closer marketing campaign. You can order the calendars by going to and click on the link at the top of the page (calendar). No login is required. The 2017 calendar will feature 12 months devoted to promoting the natural gas industry through marketing messages and professional photography. A custom tab (two inches below the bottom page) allows for your company information, web address and logo. Order today before pre-sales end on August 5, and receive them before Public Natural Gas week in October. Every one of your customers would love to have one! For questions on the 2017 calendars or on the Look Closer marketing campaign, please contact Audrey Anderson by phone at or by at aanderson@apga.org. APGA Sends Out Membership Satisfaction Survey On May 23, APGA sent out its annual membership satisfaction survey to all of its members. The survey is done to assess member views of APGA s performance, value, and the quality of services provided.

7 The survey also seeks input on additional potential services that APGA may offer that will provide value to its members. The survey is broken into segments that address membership value, advocacy, communications, education and more. A survey has been sent to the primary contact of each member system. The survey is intended to take no more than minutes to complete. The survey will help APGA staff and the Board of Directors identify the value of the services APGA provides as well as areas where improvement is needed. APGA has always been, and continues to be, a member-driven organization. As such, this survey plays a critical role in helping ensure that APGA meets the future needs of its members. The comments and suggestions APGA receives will also play an important role in helping the APGA Board of Directors and leadership to strategically plan for the future. We strongly encourage you to take the time to complete the survey so that we may continue to work to increase and improve the value of your APGA membership. Your input will help improve APGA and the overall value of membership. For questions on the survey or additional information, please contact Dave Schryver of APGA staff by at dschryver@apga.org or by phone at View Past APGA Educational Webinars Did you miss an APGA educational webinar? APGA keeps an archive of video recordings of past webinars as a resource for members at Please log in with your APGA member credentials and the Past Webinars section will be unlocked under the Upcoming APGA Educational Webinars section. EIA Reports Storage Increase of 71 Bcf to Put Working Gas Storage at 2,825 Bcf Here is the weekly EIA Summary Report issued on Thursday, May 26, 2016, which reports the week s storage report highlights for Friday, May 20, A 71 Bcf increase has been reported. Working gas in storage was 2,825 Bcf as of Friday, May 20, 2016, according to EIA estimates. This represents a net increase of 71 Bcf from the previous week. Stocks were 756 Bcf higher than last year at this time and 769 Bcf above the five-year average of 2,056 Bcf. At 2,825 Bcf, total working gas is above the five-year historical range.