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FERC Approves Four LNG Export Projects

FERC Approves Four LNG Export Projects

The Federal Energy Regulatory Commission (FERC) has approved four new liquefied natural gas (LNG) projects as well as the facilities needed to export natural gas. Three of the projects will be located “along the Brownsville Ship Channel in Brownsville, Texas” the fourth project will be expanding a facility near Corpus Christi, Texas, that is already operating. It has been noted that with the approval of these projects, FERC has approved a significant number of LNG export facilities this year.

FERC Chairman Neil Chatterjee said he is “very proud of the hard work that the Commission and its staff have undertaken to continue our processing of LNG applications. The Commission has now completed its work on applications for 11 LNG export projects in the past nine months, helping the United States expand the availability of natural gas for our global allies who need access to an efficient, affordable and environmentally friendly fuel for power generation.”

The three approved Brownsville Ship Channel projects that have been approved were proposed by “Texas LNG Brownsville, LLC; Rio Grande LNG, LLC and Rio Bravo Pipeline Company; and Annova LNG Common Infrastructure, LLC and three of its affiliates.”

“Texas LNG Brownsville would build and operate facilities to export approximately 4 million metric tons per year of natural gas as LNG. The Rio Grande LNG Terminal and associated Rio Bravo Pipeline Project would export 27 million metric tons per year. The Annova LNG Brownsville Project would export up to 6 million metric tons per year.”

The proposal by “Corpus Christi Stage III, LLC and Corpus Christi Liquefaction LLC” to build and operate a “Stage 3 LNG Project that would allow the company to liquefy for export an additional 11.45 million metric tons per year.”

The projects now have pending applications with the U.S. Department of Energy, where they are “seeking authorization to export gas to countries without Free Trade Agreements with the United States.”

FERC Commissioner Richard Glick issued a statement explaining that he dissents from the approval of these projects:

Glick says he chose to dissent “because it violates both the Natural Gas Act (NGA) and the National Environmental Policy Act (NEPA). The Commission once again refuses to consider the consequences its actions have for climate change. Although neither the NGA nor NEPA permit the Commission to assume away the impact that constructing and operating this liquefied natural gas (LNG) facility and associated natural gas pipeline will have on climate change, that is precisely what the Commission is doing here.”

Glick says that by authorizing these projects, FERC is treating “climate change differently than all other environmental impacts.” He explained that FERC “steadfastly refuses to assess whether the impact of the Project’s greenhouse gas (GHG) emissions on climate change is significant, even though it quantifies the GHG emissions caused by the Project. hat refusal to assess the significance of the Project’s contribution to the harm caused by climate change is what allows the Commission to misleadingly state that its approval of the Project will result in environmental impacts that are generally ‘less-than-significant’ and, as a result, conclude that the Project satisfies the NGA’s public interest standards.”

He said that by “Claiming that a project’s environmental impacts are generally less-than-significant while at the same time refusing to assess the significance of the project’s impact on the most important environmental issue of our time is not reasoned decision making.”

Glick pointed out that all three of these Brownsville LNG projects “will have a significant adverse impact on a number of endangered species, including the ocelot.”

For these reasons, he chose to dissent from the approval of these projects.

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.”

FERC Approves First Compliance Filings on Landmark Storage Rule

FERC Approves First Compliance Filings on Landmark Storage Rule

The Federal Energy Regulatory Commission (FERC) approved two orders to implement Order No. 841, which is a “landmark storage rulemaking aimed at breaking down market barriers to electricity storage.” Order No. 841 was enacted in February 2018, and it “addresses the participation of electric storage resources in the capacity, energy, and ancillary service markets operated by organized wholesale power markets to more effectively integrate electric storage resources, enhance competition and help ensure that those markets produce just and reasonable rates.”

It “requires each organized power market to revise its tariff to establish a participation model consisting of market rules that recognize the physical and operational characteristics of electric storage resources and facilitate their participation in those markets.”

FERC Chairman Neil Chatterjee said “Electricity storage must be able to participate on an even playing field in the wholesale power markets that we regulate. Breaking down these market barriers encourages the innovation and technological advancements that are essential to the future of our grid.”

The orders they ruled in October 2019 address “compliance filings of Southwest Power Pool (SPP) and PJM Interconnection (PJM).” The two operators were found to have generally complied with the rule, but there was a need for further action. FERC “initiated proceedings under section 206 of the Federal Power Act to address the specific issue of minimum run-time requirements.”

“FERC found that both SPP’s and PJM’s proposals generally enable electric storage resources to provide all services they are capable of providing; allow electric storage resources to be compensated for those services in the same manner as other resources; and appropriately recognize the unique physical and operational characteristics of electric storage resources.” They were instructed by FERC to submit compliance filings within 60 days.

The tariffs for both of the operators do “generally satisfy Order No. 841’s directive allowing electric storage resources to de-rate their capacity to meet minimum run-time requirements, FERC also found that neither market includes in its tariff minimum run-time requirements for resource adequacy and capacity.” Since these can impact rates and the terms and conditions of service, FERC “instituted 206 proceedings, and directed SPP and PJM to submit tariff provisions reflecting their rules and practices regarding resource adequacy minimum run-time requirements and capacity minimum run-time requirements, respectively, for all resource types.”

PJM and SPP have to submit the tariff provisions within 45 days of the 206 notice’s publication in the Federal Register.

Related documents in this ruling:

Order E-1

Order E-2

Presentation

Statement from Commissioner Bernard L. McNamee on E-1

Statement from Commissioner Bernard L. McNamee on E-2

FERC Issues Guidance for Hydro Development

FERC Issues Guidance for Hydro Development

The Federal Energy Regulatory Commission (FERC) issued guidance for developing “closed-loop pumped storage projects at abandoned mine sites and a list of existing non-powered federal dams” that FERC along with other agencies has agreed “have the greatest potential for non-federal hydropower development.” These both “fulfill FERC’s requirements under Sections 3003 and 3004 of the America’s Water Infrastructure Act of 2018 (AWIA).”

FERC was directed by AWIA to conduct a workshop in April 2019 that explored the “potential opportunities for the development of closed-loop pumped storage projects at abandoned mine sites.” The new guidance they issued is “based on information provided at the workshop, identifies resources and provides information to assist prospective applicants considering the development of closed-loop pumped storage projects at these sites.”

A closed-loop pumped storage project is “a pumped storage project that uses reservoirs situated at locations other than natural waterways, lakes, wetlands, and other natural surface water features.” The types of reservoirs that are used in closed-loop projects ” include reservoirs located in surface mine pits or underground mines.”

FERC worked “jointly with the Departments of the Army, the Interior, and Agriculture” to develop the list of already existing non-powered federal dams, as they were directed to by the AWIA. In December 2018, FERC “initiated consultation with the Department Secretaries by requesting agency points of contact for the purposes of receiving and providing input on a draft list of non-powered federal dams.” FERC developed their final list with “representatives of the Army Corps of Engineers, the Bureau of Reclamation, the National Park Service, the Forest Service, and the Department of Energy.”

To compile this list, FERC used “the U.S. Department of Energy’s (DOE) April 2012 Assessment of Energy Potential at Non-Powered Dams in the United States Report; the U.S. Army Corps of Engineers’ (Corps) July 2013 Hydropower Resource Assessment at Non-Powered USACE Sites; the U.S. Bureau of Reclamation’s (Reclamation) March 2011 Hydropower Resources Assessment at Existing Reclamation Facilities; and Reclamation’s March 2012 Site Inventory and Hydropower Energy Assessment of Reclamation Owned Conduits.”

From there, FERC “used DOE’s list of top 100 non-powered dams with the most estimated hydropower potential, prioritized by capacity.” After “obtaining the complete list of dams for the report from Oak Ridge National Laboratory” the list was up to 296 potential dams.

They then evaluated the potential of each dam for hydropower using this criterion:

·         “The compatibility of hydropower generation with existing purposes of the dam;

·         “The proximity of the dam to existing transmission resources;

The existence of studies to characterize environmental, cultural, and historic resources relating to the dam; and

·         “The effects of hydropower development on release or flow operations of the dam.”

The final list excludes:

·         “dams that are or will be utilized by a nonfederal hydropower project under an existing Commission-issued hydropower license;

·         “dams identified by the Forest Service as incompatible with the purposes of existing Forest Management Plans or reservation authority;

·         “dams identified by the Corps as incompatible with hydropower generation due to certain circumstances that would hinder hydropower development (e.g., pending dam removal, extenuating construction activities, etc.); and

·         “dams identified by the National Park Service that may have the potential to affect the national park system or the National Wild and Scenic River system.”

There are “230 non-powered federal dams, sorted by potential capacity, that FERC and the Department Secretaries agree have the greatest potential for non-federal hydropower development” on the final list.

FERC Releases Final HDD Guidance Plan

FERC Releases Final HDD Guidance Plan

The Office of Energy Projects finalized the Federal Energy Regulatory Commission’s (FERC) Guidance for Horizontal Directional Drill Monitoring, Inadvertent Return Response, and Contingency Plans (HDD Guidance).

After FERC released its draft of the HDD Guidance, they “received comments from 15 entities including natural gas pipeline companies, engineering consulting firms, trade organizations, environmental interest groups, and state environmental departments.” Those led FERC to make revisions to address those comments. The comments that “either were too location-specific, were already adequately/accurately addressed as written, or regarded topics that were not relevant to the HDD Guidance” were not included in the modifications.

“The HDD Guidance is intended to assist the industry with preparation of their project HDD plans for FERC staff review.” FERC stressed that the “guidance does not substitute for, amend, or supersede the Commission’s regulations under the Natural Gas Act of 1938 or the Commission’s and Council on Environmental Quality’s regulations under the National Environmental Policy Act.” It does not grant additional rights or impose new legal obligations.

“The purpose of this guidance is to describe the technical components of an HDD Plan including drilling fluid composition and management, monitoring procedures, and response procedures for an inadvertent return of drilling fluid to the ground surface (IR).” They also provided an outline for an HDD Plan, which is formatted into “an effective presentation based on our experience, but is not mandatory and may be modified (including the use of footnotes where necessary for clarification) for individual projects.”

FERC Issues a Report Recommending Ways For The Bulk- Power System to Improve Compliance in The CIP Standards and Cybersecurity

FERC Issues a Report Recommending Ways For The Bulk- Power System to Improve Compliance in The CIP Standards and Cybersecurity

The Federal Energy Regulatory Commission (FERC) hasissued areport with recommendations for the “users, owners and operators of the bulk-power system improve their compliance with mandatory Critical Infrastructure Protection (CIP) standards as well as their overall cybersecurity posture.”

The findings shared in the report were based upon the “non-public CIP audits of registered entities that found most of the cybersecurity protection process and procedures adopted by the entities met the mandatory requirements of the standards.” FERC reported that the lessons they learned from conducting “audits completed in fiscal year 2019 can help entities assess their risk and compliance with mandatory reliability standards and… can facilitate efforts to improve the security of the nation’s electric grid.”

The lessons FERC staff learned in the audits were:

1.       “Consider all generation assets, regardless of ownership, when categorizing BES Cyber Systems associated with transmission facilities.

2.       “Ensure that all employees and third-party contractors complete the required training and that the training records are properly maintained.

3.       “Verify employees’ recurring authorizations for using removable media.

4.       “Review all firewalls to ensure there are no obsolete or overly permissive firewall access control rules in use.

5.       “Limit access to employee’s PIN numbers used for accessing PSPs using a least-privilege approach.

6.       “Ensure that all ephemeral port ranges are within the Internet Assigned Numbers Authority (IANA) recommended ranges.

7.       “Clearly mark Transient Cyber Assets and Removable Media.”

FERC staff from the “Office of Electric Reliability and Office of Enforcement conducted the audits in collaboration with staff from the North American Electric Reliability Corporation and its regional entities. In addition to assessing compliance with the CIP reliability standards, the report includes recommendations regarding cybersecurity practices that are voluntary.”

The recommendations in the report include:

  • “Consider all generation assets, regardless of ownership, when categorizing bulk electric system cyber systems associated with transmission facilities;
  • “Ensure that all employees and third-party contractors complete the required training and that the training records are properly maintained;
  • “Verify employees’ recurring authorizations for using removable media; and
  • “Review all firewalls to ensure there are no obsolete or overly permissive firewall access control rules in use.”
Statements of FERC Chairman and Commissioners on Southwest Power Pool Inc

Statements of FERC Chairman and Commissioners on Southwest Power Pool Inc

Southwest Power Pool, Inc. (SPP) submitted revisions to its Membership Agreement, on August 2, “pursuant to section 205 of the Federal Power Act (FPA) and part 35 of the Commission’s regulations.” The revisions were submitted to “add definitions for the terms Load Serving Entity (LSE) and non-LSE.” SPP’s revisionswent into effect by operation of law on October 1. This is because the Federal Energy Regulatory Commission (FERC) did not act on the filing within the established 60-day period, which means that FERC did not reach a quorum about the proposal.

Chairman Neil Chatterjee and Commissioner Bernard L. McNamee issued a joint statement on their stance on the proposal.

Chatterjee and McNamee said that in 2013 SPP proposed revisions to the same Agreement, wanting to “require a member to post a deposit, at the time the member provides its notice of intent to withdraw, to defray any costs SPP would incur to process the member’s withdrawal from membership in SPP. At the time, SPP proposed basing the amount of the deposit on whether the member is an LSE or a non-LSE, with the former submitting a $150,000 deposit and the latter submitting a $50,000 deposit.” The proposal would adjust the deposit based on the actual costs, “with the member either receiving an invoice for any additional costs exceeding the deposit or a refund of any unexpended deposit amounts.” This proposal had been accepted.

SPP’s current proposal “asserts that the proposed definitions are just and reasonable because they address a gap in the current Membership Agreement and will provide greater clarity to all members as to which level of withdrawal deposit will apply in the event that a member submits a notice of intent to withdraw.9 SPP further asserts that the revisions are just and reasonable because they rely on Commission-accepted definitions set forth in the OATT, under which SPP members have long been operating and should be familiar.”

Both Chatterjee and McNamee say they “would have accepted SPP’s proposed revisions to its Membership Agreement… and found the proposed definitions just and reasonable and not unduly discriminatory or preferential. We would have acknowledged that the proposed definitions are consistent with the definitions for LSE in Attachments C and AE in SPP’s OATT and agreed with SPP that defining these terms in the Membership Agreement provides clarity to members as to which level of withdrawal deposit will apply in the event that a member submits a notice of intent to withdraw.”

They say that since there was no quorum in this proposal, they were not able to “fully discuss the issues that arose in this proceeding with our fellow Commissioner, whose arguments we would have thoughtfully considered.”

Commissioner Richard Glick also released a brief statement on the matter.

Glick said that he “signed an ethics pledge that precludes me from working on any matters in which Avangrid, Inc. or any of its affiliates or subsidiaries is a party until November 29, 2019.” He said that while “Avangrid has not intervened in this particular proceeding, the substantive issues presented relate directly to a contested issue in another pending proceeding, Docket No. EL19-11-000, in which Avangrid intervened.” He decided that to be cautious, he would not have participated in the proceeding.