FERC’s Energy Infrastructure Update for December 2018

FERC’s Energy Infrastructure Update for December 2018

On February 4, the Federal Energy Regulatory Commission (FERC) released its Energy Infrastructure Update for December 2018, which gives the highlights of changes and expansions in the industry.

For natural gas pipelines, five were placed in service, two were certified, and six more were proposed; there were no updates in December for storage facilities or liquified natural gas (LNG) imports of exports. The total number of pipeline projects placed into service in 2018 was 26, which is lower than the 32 in 2017. There were 48 certified in both 2017 and 2018. No storage facilities were placed into service in 2018, and only one was in 2017. There were four storage facilities certified in 2018, compared to only two in 2017. One LNG export was placed into service, compared to three in 2017. There was one import/export facility certified in 2018, and there were none in 2017.

For hydropower, one capacity amendment was filed in December, and another hydropower facility was licensed. In 2018, two facilities files for 10-MW Exemption and three filed for capacity amendments. Only one license was issued last year, and one capacity amendment was issued. Two licenses were placed in service in 2018.

In December, no new coal facilities were put into service, and only four were put in service in 2018; three were put in service in 2017. Seven new natural gas facilities were put in service, and 103 were opened in 2018; this is compared to the 106 put in service in 2017. No nuclear facilities opened in December, but five opened last year; only one opened in 2017. No oil facilities opened in December either, but 14 opened in 2018, compared to the 37 opened in 2017. No hydropower facilities opened either, but 10 opened in 2018; 14 opened in 2017. Twelve wind power facilities opened in December, 55 opened in 2018; 83 opened in 2017. No biomass facilities opened in December, but 13 opened last year; 27 opened in 2017. Two geothermal steam facilities opened, half of the four that opened last year; only two opened in 2017. There were 15 solar facilities opened in December, and 429 total in 2018; in 2017 750 opened.

There were a number of suggestions for additions and retirements to take place by January 2022. One coal addition was suggested, and 57 retirements. For natural gas, 276 additions were suggested and only 94 retirements. There were 11 additions suggested for nuclear power, and nine retirements. Seventeen oil additions and 24 retirements were suggested. For hydropower, 237 additions and 20 retirements were suggested. There were 530 wind additions and no retirements suggested. There were 53 biomass additions and 29 retirements recommended. For geothermal steam, 19 additions and no retirements were suggested. Solar power saw the largest recommended additions with 2,278 and only five retirements.

In December, 20.2 miles of electric transmission projects of less than 230 volts were completed, compared to 54 miles of in December 2017. That same voltage has 327.3 miles in all of 2018, compared to 329.3 in 2017. For voltages of 345, there were 161.8 miles completed in December, compared to 32.5 miles in December 2017. In all of 2018, 714.5 miles were completed, compared to 363.1 miles in 2017. For 500 voltage, there was none in December, only 69.4 miles in 2018; there were no miles completed in 2018. In total, 182 miles were completed in December, compared to 86.5 miles in December 2017. In all of 2018, a total of 1,111.2 miles completed; 692.4 miles were completed in 2017.

FERC’s Final Statement for the Driftwood LNG Project

FERC’s Final Statement for the Driftwood LNG Project

On January 18, Federal Energy Regulatory Commission (FERC) issued their final Environmental Impact Statement for the Driftwood LNG Project. The Driftwood Project requested authorization “construct and operate liquefied natural gas (LNG) export facilities and certain interstate, natural gas transmission pipeline facilities in Evangeline, Acadia, Jefferson Davis, and Calcasieu Parishes, Louisiana.”

There are two main parts to the Driftwood Project:

  1. “The construction and operation of the LNG Facility, which includes five LNG plant facilities to liquefy natural gas, three tanks to store the LNG, LNG carrier loading/berthing facilities (Marine Facility), and other appurtenant facilities at a site near Carlyss, Calcasieu Parish, Louisiana”
  2. “The construction and operation of about 96 miles of pipeline, three new compressor stations, and 15 new meter stations.

They anticipate the Driftwood Project will produce approximately “27.6 million tonnes per annum of LNG for export.”

FERC determined the Driftwood Project will have significant adverse effects on the environment. “However, they would be reduced to less than significant levels with the implementation of Driftwood’s proposed impact avoidance, minimization, and mitigation measures and the additional measures recommended by staff.” FERC reached these conclusions through “information provided by Driftwood and through data requests; field investigations; literature research; geospatial analysis; alternatives analysis; public comments and scoping sessions; and coordination with federal, state, and local agencies and Indian Tribes.”

“The following factors were also considered in our conclusions:

  • The LNG Facility site would be in an area currently zoned for heavy industrial use, which is consistent with other industrial facilities along the Calcasieu Ship Channel.
  • The Pipeline would parallel or be collocated with other disturbed right-of-way corridors (with pipelines or utilities) for about 68 miles (about 71 percent of the route).
  • Driftwood would construct the Project using a number of Project-specific plans designed to minimize impacts. These include: Construction Environmental Control Plan; Driftwood Upland Erosion Control, Revegetation, and Maintenance Plan and Wetland and Waterbody Construction and Mitigation Procedures; construction Spill Prevention, Control, and Countermeasures (SPCC) Plan; Unanticipated Discoveries Plan; Horizontal Directional Drill Plans; Erosion and Sedimentation Control Plan; and Fugitive Dust Management Plan. Driftwood would also develop and implement an operations SPCC Plan.
  • The U.S. Coast Guard issued a Letter of Recommendation indicating the Calcasieu Ship Channel would be considered suitable for the LNG marine traffic associated with the Project.
  • The LNG Facility design would include acceptable layers of protection or safeguards that would reduce the risk of a potentially hazardous scenario from developing into an event that could impact the offsite public.
  • The Pipeline and associated aboveground facilities would be constructed, operated, and maintained in compliance with Department of Transportation standards published in 49 CFR 192.FERC staff would complete consultations with resource agencies to ensure compliance with Section 7 of the Endangered Species Act; and Section 106 of the National Historic Preservation Act.
  • Driftwood would follow an environmental inspection program, including Environmental Inspectors, to ensure compliance with the mitigation measures that become conditions of the FERC authorization. FERC staff would conduct inspections throughout construction, commissioning, and restoration of the Project.”

“FERC staff would complete consultations with resource agencies to ensure compliance with:

  • Section 7 of the Endangered Species Act; and
  • Section 106 of the National Historic Preservation Act.”

FERC also came up with some recommendations for Driftwood to implement in order for them to reduce the impact even further. These recommendations include “that Driftwood should implement specific to engineering, vulnerability, and detailed design of the LNG Facility, and ongoing recommendations relating to inspections, reporting, notification, and non-scheduled events that would apply throughout the life of the LNG Facility.”

Final Environmental Impact Statement for the Northeast Supply Enhancement Project

Final Environmental Impact Statement for the Northeast Supply Enhancement Project

The Federal Energy Regulatory Commission (FERC) issued a final Environmental Impact Statement for the Northeast Supply Enhancement Project that was purposed by Transcontinental Gas Pipe Line Company, LLC. This Project would provide an estimated “400,000 dekatherms per day of natural gas” to customers in the New York City area.

“The final EIS addresses the potential environmental effects of the construction and operation of the following Project facilities: 

  • 10.2 miles of 42-inch-diameter pipeline loop in Lancaster County, Pennsylvania (the Quarryville Loop);
  • 3.4 miles of 26-inch-diameter pipeline loop in Middlesex County, New Jersey (the Madison Loop);
  • 23.5 miles of 26-inch-diameter pipeline loop in Middlesex and Monmouth Counties, New Jersey, and Queens and Richmond Counties, New York (the Raritan Bay Loop, which consists of 0.2 mile of pipe in onshore Middlesex County, New Jersey; 6.0 miles of offshore pipe in New Jersey waters; and 17.3 miles of offshore pipe in New York waters);
  • modification of existing Compressor Station 200 in Chester County, Pennsylvania;
  • construction of new Compressor Station 206 in Somerset County, New Jersey; and
  • ancillary facilities (including cathodic protection systems, new and modified mainline valves with tie-in assemblies, new and modified launcher/receiver facilities, and facilities to connect the Raritan Bay Loop to the existing Rockaway Delivery Lateral at the Rockaway Transfer Point).”

FERC determined that the Project would have adverse impacts on the environment, though most of them would be temporary, only occurring during the construction of the Project. “Long-term impacts on air quality and noise would result from the operation of Compressor Station 206. We also conclude that, with implementation of Transco’s impact avoidance, minimization, and mitigation measures, as well as their adherence to our recommendations, all Project effects would be reduced to less-than-significant levels.

“Although many factors were considered during our environmental review, the principal reasons for these conclusions are as follows:

  • The Quarryville and Madison Loops would be collocated with existing Transco facilities for 97 percent and 100 percent of their lengths, respectively, with a typical offset of 25 feet from existing pipelines. Some workspace needed to construct the loops would overlap with Transco’s current right-of-way, reducing construction-related impacts.
  • A high level of public participation was achieved during the pre-filing and post-application review processes and helped inform our analysis.
  • Compressor Station 206 would comply with operating air permit conditions, and emissions would meet the National Ambient Air Quality Standards and other applicable standards that are protective of public health and welfare. Operating noise from the facility would meet our requirements at noise sensitive areas and the facility would be visually screened from surrounding viewpoints. All Project facilities, including Compressor Station 206, would be designed, constructed, operated, and maintained in accordance with U.S. Department of Transportation safety requirements that are protective of public safety.
  • Direct and indirect construction emissions of nitrogen oxides would be offset through direct mitigation or the purchase of Emission Reduction Credits and Creditable Emissions Reductions, thereby conforming with the New York and New Jersey State Implementation Plans with respect to the New Jersey-New York-Connecticut Interstate Air Quality Control Region.
  • The proposed route and construction methods for the Raritan Bay Loop were developed in consultation with the USACE and other agencies to minimize crossing designated anchorage areas, meet USACE marine traffic safety requirements, and reduce impacts on water quality and aquatic wildlife. Sixty-four percent of the offshore loop would be installed using a jet trencher, which would not require the removal and disposal of seafloor sediment. Thirty-one percent of the offshore loop would be installed using a clamshell excavator fitted with an environmental bucket, and an environmental clamshell would also be used to excavate horizontal directional drill (HDD) entry and exit pits. The remainder of the offshore loop would be installed via HDD, thereby avoiding direct seafloor impacts. Project-related turbidity would be temporary, and most sedimentation would occur near to the approximately 87.8-acre area of seafloor that would be directly affected by construction. In addition, Transco consulted with the National Marine Fisheries Service (NMFS), New Jersey Department of Environmental Protection, and New York State Department of Environmental Conservation to minimize construction conflicts with time of year restrictions for certain marine species to the extent practicable. As a result, impacts on aquatic resources would be temporary and minor to moderate.
  • We evaluated numerous alternatives to Transco’s proposal and determined that the alternatives would either not meet the stated purpose and need of the Project, would be infeasible, or would not provide a significant environmental advantage when compared to the proposed Project.
  • The Project area has been substantially impacted by human activity. The Project and other actions in the area would cumulatively impact some resources, but most cumulative impacts would be temporary or short-term and minor. Project impacts on forest resources would be permanent but minor when compared to the extent of forest in the region, and operating air emissions from Compressor Station 206 would permanently contribute to other emission sources in the region but would comply with applicable regulations.
  • An environmental inspection and monitoring programs would ensure compliance with all construction and mitigation measures that become conditions of the FERC We completed our consultation with the NMFS regarding the potential for the Project to impact Essential Fish Habitat species and National Oceanographic and Atmospheric Administration Trust Resources.authorizations and other approvals.
  • We would complete the process of complying with the Endangered Species Act prior to allowing any construction to begin.
  • We would complete the process of complying with section 106 of the National Historic Preservation Act and implementing the regulations at 36 CFR 800 prior to allowing any construction to begin.”

Part one of the statement can be read here, and part two can be read here.

FERC Proposes to Ease Regulatory Burden for Certain Market-Based Rate Sellers

FERC Proposes to Ease Regulatory Burden for Certain Market-Based Rate Sellers

On December 20, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) “to revise the horizontal market power analysis required for electric power sellers seeking to obtain or retain market-based rate authority in certain organized wholesale power markets.”

This NOPR helps to safeguard FERC’s “ability to prevent the potential exercise of market power by leaving in place other important protections to ensure just and reasonable rates” and it will “ease the regulatory burden for certain market-based rate sellers.” This NOPR will remove the requirement that sellers currently have to submit “indicative screens in any organized wholesale power market that administers energy, ancillary services and capacity markets subject to Commission-approved monitoring and mitigation.”

The NOPR is rooted in Order No. 697, because in that Order, FERC identified two screens to assess “horizontal market power for market-based rate sellers: the pivotal supplier screen and the wholesale market share screen. Each serves as a cross-check on the other to determine whether sellers may have market power and should be examined further when seeking market-based rates.”

In Order 697, two types of market-based rate sellers were created:

  • “Category 1 sellers are wholesale power marketers and wholesale power producers that own, control, or are affiliated with 500 MW or less of generation in aggregate per region; that do not own, operate, or control transmission facilities other than limited equipment necessary to connect individual generation facilities to the transmission grid – or have been granted waiver of the requirements of Order No. 888; that are not affiliated with anyone that owns, operates, or controls transmission facilities in the same region as the seller’s generation assets; that are not affiliated with a franchised public utility in the same region as the seller’s generation assets; and that do not raise other vertical market power issues. Category 1 sellers are not required to file regularly scheduled updated market power analyses
  • Market-based rate sellers that do not fall into Category 1 are designated as Category 2 sellers and are required to file updated market power analyses every three years”

The current market-based sellers that are “in organized wholesale power markets that do not administer these types of capacity markets… would be obliged to submit those indicative screens if they wish to sell capacity.” It also proposes that in the event of one of the screens failing, “market-based sellers in those markets may submit a delivered-price test or other evidence or propose other mitigation for capacity sales in these markets.”

All of the market-based sellers will “still be required to file a vertical market power analysis as well as an asset appendix, which provides comprehensive information relevant to determine a seller’s market power, including: generators owned or controlled by the seller and its affiliates; long-term firm power purchase agreements of the seller and its affiliates; and electric transmission assets, natural gas intrastate pipelines and intrastate natural gas storage facilities owned or controlled by the seller and its affiliates.”

FERC Staff Issues the DEIS for the Annova LNG Brownsville Project

FERC Staff Issues the DEIS for the Annova LNG Brownsville Project

On December 14, the Federal Energy Regulatory Commission (FERC) issued a Draft Environmental Impact Statement (DEIS) on the Annova LNG Brownsville Project. The Annova Project has proposed a project to construct and operate a liquefied natural gas (LNG) terminal on the Brownsville Ship Channel in Cameron County, Texas. The DEIS assesses the impacts that the LNG would have on the environment in the surrounding area.

“The Project consists of the following facilities:

  • pipeline meter station;
  • liquefaction facilities;
  • two LNG storage tanks;
  • marine and LNG transfer facilities;
  • control room, administration/maintenance building;
  • site access road; and
  • utilities (power, water, and communication systems).”

The assessment came to the conclusion that the Annova Project would have adverse effects on the environment. “However, the impacts on the environment from the proposed Project would be reduced to less than significant levels with the implementation of Annova’s proposed impact avoidance, minimization, and mitigation measures and the additional measures recommended by FERC staff.” FERC also came up with a few mitigation methods that they recommended should “be attached as conditions to any authorization issued” in regards to this project.

Some of the things that were factored into FERC’s decision were:

  • “impacts on wetlands and aquatic habitat, including Essential Fish Habitat, would be mitigated per Annova’s draft Conceptual Mitigation Plan;
  • Annova would implement its Project-specific Upland Erosion Control, Revegetation, and Maintenance Plan and Wetland and Waterbody Construction and Mitigation Procedures to minimize construction impacts on soils, wetlands, and waterbodies;
  • we recommend that all appropriate consultations with the FWS and NOAA Fisheries under the Endangered Species Act should be completed before construction is allowed to begin;
  • we recommend that Annova file all outstanding cultural resource reports and agency comments for our review before construction is allowed to begin;
  • the Coast Guard issued a Letter of Recommendation indicating the BSC would be considered suitable for the LNG marine traffic associated with the Project;
  • the LNG terminal design would include acceptable layers of protection or safeguards that would reduce the risk of a potentially hazardous scenario from developing into an event that could impact the offsite public; and
  • FERC’s environmental and engineering inspection and mitigation monitoring program for this Project would ensure compliance with all mitigation measures and conditions of any FERC Authorization.”

“Annova LNG is pleased FERC has acknowledged our proactive approach towards minimizing and offsetting the project’s environmental impacts,” said Omar Khayum, Annova LNG CEO. “Annova LNG is investing in electric motor-driven equipment to minimize air emissions, restoring former wetlands in the project vicinity to more than offset wetlands impacts, and actively contributing to efforts to protect the ocelot and other wildlife, including establishing a wildlife corridor on the project site.”

The Annova project’s layout was modified to avoid over 100 acres of wetlands and to create a 185-acre environmental conservation corridor. It also plans to restore over 250 acres of wetlands and shallow water habitat.

Volume I of the DEIS can be found here. Volume II of the DEIS can be found here.

The commenting period on the DEIS is open until February 4, after which time FERC will begin deliberating on a decision.

FERC Energy Infrastructure Updates for September 2018

FERC Energy Infrastructure Updates for September 2018

On November 5, the Federal Energy Regulatory Commission (FERC) issued an update on the Energy Infrastructure in the country, related to natural gas and hydropower, and covering the highlight for electric generation and transmissions.

One pipeline project was placed in service in September, while another three were certified, and one other pipeline project was proposed.

A total of 10 pipeline projects have been placed into service between January and September of 2018, whereas the same timeframe in 2017, a total of 18 were put in service. Forty-two pipeline projects have been certified in the first nine months of the year, while last year only 27 were certified.

No storage facilities were put into service in those months, and only a single one was put into service in 2017. Four storage facilities were certified, as opposed to only one in 2017.

One liquefied natural gas (LNG) project was put in service for exports, and none were certified for either imports or exports. Last year there were two LNG projects put in service in that timeframe, but none were certified.

As for electric generation, six different projects were put online in September. Three wind plants went online in September, whereas 32 have been brought online in the first nine months. Nine solar power facilities also went online, part of the 310 that have been put in action since January

Four coal plants have gone online this year, along with 68 natural gas facilities, one nuclear facility, 11 oil facilities, ten water, 11 biomass, two geothermal steam, and two waste heat facilities; none of these went online in September. This is compared to the same time period last year, where no coal plants, 79 natural gas, one nuclear, 18 oil, 12 water, 55 wind, 25 biomass, one geothermal steam, and 433 solar facilities were brought online.

There were a large number of proposed additions and retirements of facilities with the goal of being finished by October 2021. For coal there was one addition and 74 retirements; 291 additions and 112 retirements for natural gas; eight additions and retirements for nuclear power; 18 additions and 22 retirements for oil; 252 additions and 19 retirements for water; 57 additions and 24 retirements for biomass; 22 additions and no retirements for geothermal steam; 2,020 additions and five retirements for solar power; six additions and no retirements for waste heat; and 88 additions labeled under the “other” category, which encompasses  “purchased steam, tires, and miscellaneous technology such as batteries, fuel cells, energy storage, and fly wheel.”

The only update FERC had for hydropower was: “NorthWestern Corporation was issued an order raising the capacity of its Missouri-Madison Project No. 2188 from 303.500 MW to 305.240 MW. The project is located on the Missouri and Madison Rivers in Gallatin, Madison, Lewis and Clark and Cascade Counties, MT.”

There were no transmission activities in September that needed to be highlighted in the report, no projects were completed in that month.

FERC’s Annual Report on Enforcement

FERC’s Annual Report on Enforcement

On November 15, the Federal Energy Regulatory Commission’s (FERC) Office of Enforcement issued their 12th annual report on enforcement. As in previous years, the Office of Enforcement will maintain its focus on the threats “posed by fraud and market manipulation in wholesale energy markets” in order to ensure that this kind of conduct does “not undermine FERC’s goal of ensuring efficient energy services at reasonable cost or erode confidence in those markets to the detriment of consumers and competitors.”

The report highlights FERC’s focus on fraud and market manipulation, conduct that threatens the regulated markets transparency, serious violations of mandatory Reliability Standards, and anticompetitive conduct. The Report follows the trend from previous years, of providing the public with information about “the nature of non-public enforcement activities,” like surveillance inquiries, self-reported violations, and investigations that had been closed without enforcement action in the public.

During the presentation about the Report, FERC was informed that “the Report summarizes audits, market reports, litigation filings, and settlements which were approved by the Commission.” The Office of Enforcement said that the summaries are available to help any companies that are seeking to comply with FERC’s orders and regulations. The individuals and companies whose conduct was reviewed in this report were not identified in order to maintain confidentiality.

During the 2018 Fiscal Year, FERC approved six different settlements between Enforcement and subjects in order to resolve different matters. These settlements totaled about $83 million in civil penalties and $66 million in disgorgement. More information on this was included in the Report.

Some of the highlights of Enforcement Report include:

  • “Investigations staff opened 24 new investigations and closed 23 pending investigations with no action. Additionally, staff negotiated six settlements that resulted in more than $83 million in civil penalties and disgorgement of more than $66 million in unjust profits. These Commission-approved settlements included provisions requiring the subjects to enhance their compliance programs and periodically report back to Enforcement regarding the results of those enhancements.
  • Audits and Accounting staff completed 14 audits of oil pipelines, electric utilities and natural gas companies, resulting in 209 recommendations for corrective action and directing refunds and recoveries totaling more than $185 million. Additionally, DAA advised and acted on 435 proceedings at the Commission covering various accounting matters with cost-of-service rate implications.
  • Market Oversight staff continued its analysis of market fundamentals, and enhanced its capabilities for identifying anticompetitive market outcomes and anomalies that may indicate an exercise of market power. Market Oversight published its 2017 State of the Markets Report and Seasonal Assessment reports. It also held two Electric Quarterly Report user group meetings to discuss potential system improvements and enhancements.
  • Analytics and Surveillance staff reviewed numerous instances of potential misconduct and provided analytical expertise to Investigations staff in approximately 50 investigations. Natural gas surveillance screens produced approximately 7,719 alerts. Each month Analytics and Surveillance staff ran and reviewed 84 electric surveillance screens, hourly and intra-hour sub-screens, and reports for more than 36,000 hubs and pricing nodes within six regional transmission owner and independent system operator regions.”