FERC Announces Dispute Resolution Process for Midwest Propane Situation

FERC Announces Dispute Resolution Process for Midwest Propane Situation

The Federal Energy Regulatory Commission (FERC) announced it would be starting a new alternative dispute resolution process with the “pipeline companies, shippers and their representatives to explore actions FERC and industry can take to alleviate propane pipeline constraints in the Midwest.”

This new process is the result of “conversations with and letters from Iowa Gov. Kim Reynolds” along with members of the Senate and House of Representatives, who had expressed concern about difficulties with propane distribution and supplies in the Midwest.

A state of emergency was declared in nine states in the Midwest because of the shortage of propane. There is not a shortage nationwide, just in the Midwest. This is because flooding led to harvest happening later in the year, and the farmers then needed more power to dry grain out and control the freshness of other crops that are waiting to be sold.

FERC also accepted a proposal from  Enterprise TE Products Pipeline Company LLC allowing them to provide “emergency transportation service of propane to the Midwest region for a 30-day period.” Enterprise said that the “demand for propane is due to an unusual coincident increase in heating demand, resulting from unseasonably cold weather in the region, and crop drying demand.” It is for this reason they filed the tariff to help bring relief to the Midwest. They are only doing this for 30 days because they do not think this can “be sustained for a prolonged period of time.” The tariff was filed unopposed, with no comments, protests, or motions to intervene, thus allowing it to pass quickly.

FERC Chairman Neil Chatterjee said “The Commission takes this issue seriously. We have been actively engaging with stakeholders, and with Capitol Hill and the states, and receiving regular updates from pipeline companies. By bringing the pipelines and shippers to the table, we are building on these efforts and establishing a dialogue focused on exploring concrete solutions.”