Sunoco Logistics Partners LP has been dealt an early setback in a bid to earn the status of a public utility corporation, which would exempt its Mariner East pipeline from local zoning ordinances.
Two administrative law judges (ALJ) issued a 24-page ruling on July 23, recommending to the Pennsylvania Public Utilities Commission (PUC) that it not grant the company such protections. Citing state law and a decision by FERC last year, the ALJs said the PUC does not have jurisdiction because Mariner East does not constitute public utility status.
Sunoco first filed the request with the PUC in March after it became clear that some townships in the southeastern part of the state near Philadelphia would not facilitate the development of 35 valve and pumping stations that would be needed to help move natural gas liquids (NGL) through the line (see Shale Daily, April 28).
Most of Mariner East already exists, and Sunoco wants to expand the line to gather NGLs from Ohio and southwest Pennsylvania, where the line would originate for delivery to the Marcus Hook Industrial Complex and storage facilities in Delaware County south of Philadelphia (seeShale Daily, Sept. 9, 2013).
A number of environmental groups, townships and other organizations filed objections to the company's petition for utility status. The ALJs also said a declaratory judgment issued by the Federal Energy Regulatory Commission in February 2013 "supports the conclusion that Sunoco's proposed transport of ethane and propane through the state of Pennsylvania at FERC-approved rates is interstate common carrier service regulated by FERC through the Interstate Commerce Clause, rather than intrastate public utility service," which is regulated by the PUC.
With the ruling, Sunoco and the parties that have filed objections may submit new arguments by the end of the month. Those are to be reviewed, but ultimately the five-member PUC would decide on Sunoco's request.
"The commission still must rule on this, and we believe the commission has and will continue to recognize that the proposed Mariner East service will result in numerous public benefits," the company said. Propane and ethane service on the line is expected to begin by next year.