At a meeting where natural gas dominated the agency’s agenda, FERC on Thursday looked favorably upon industry’s request for permanent regulatory and policy changes to spur the construction of interstate natural gas pipeline mainline expansions, new storage capacity and takeaway facilities for liquefied natural gas (LNG) import terminals.

The Interstate Natural Gas Association of America (INGAA) and the Natural Gas Supply Association (NGSA) in November asked FERC to expand the scope of blanket certificate authorizations to allow for the faster construction of certain mainline expansion, underground storage improvements and LNG takeaway facilities (see Daily GPI, Nov. 23, 2005). The Federal Energy Regulatory Commission at its monthly meeting issued a notice of proposal rulemaking (NOPR) that reflected the position of the two gas groups [RM06-7].

As a result of the proposal to widen the scope of the agency’s blanket certificate rules, companies could proceed with the construction of these projects without having to go through the Federal Energy Regulatory Commission’s Section 7 certificate proceeding.

The Commission also proposed to raise the dollar limits for blanket construction projects. For projects that do not require prior-notice from FERC, the agency seeks to increase the per-project cost limit to $9.6 million from $8.2 million. And for projects that to require prior-notice, the per- project limit would be raised to $27.4 million from $22 million.

“I’m wondering if the dollar amounts are enough,” given the high cost of raw materials, said Commissioner Nora Brownell. FERC Chairman Joseph Kelliher reminded her that this was a NOPR and that industry could recommend higher project cost limits to be included in a final rule. Commissioner Suedeen Kelly called the proposed blanket construction caps “reasonable,” saying they reflected the realities of the increase in gas pipeline construction costs.

She noted that it was time the Commission gave its blanket certificate rules, which were established in 1982, a “tune-up.”

Further agreeing with INGAA and the NGSA, the Commission proposed that pipelines could charge different (lower) service rates to shippers who anchor a project and make it financially possible.

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