Peregrine Keystone Gas Pipeline LLC has abandoned its plans for a gathering system in the Marcellus Shale of southwest Pennsylvania, the final chapter in the efforts of three companies that had sought public utility status for projects in the state.
“The reduced natural gas activity in Pennsylvania has resulted in Peregrine revising the schedule and scope of its planned facilities in the proposed service area,” the Midland, TX-based company said in a filing with the Pennsylvania Public Utility Commission (PUC). “Continuing with this matter at the present time would be a waste of the time and resources of those involved with this proceeding.”
Peregrine had sought public utility status to build a gathering system through Greene, Fayette and Washington counties. The $16.2 million system would serve Peregrine affiliate Arrington Oil & Gas LLC, as well as other producers in the region.
Last year Laser Northeast Gathering Co. LLC abandoned its efforts to have a proposed gathering system in northeast Pennsylvania classified as a public utility with the PUC (see Shale Daily, Sept. 14, 2011). Pentex Pipeline Co., which had also sought public utility status, withdrew its application late last year.
Laser broke ground for its $50 million PA-NY Gathering Line Project in early 2011 despite an administrative law judge’s recommendation in December 2012 that the PUC deny the company’s application on the grounds that the project wouldn’t provide a public service (see Shale Daily, Feb. 3, 2011; Dec. 3, 2010). In May 2011 the PUC disagreed with the judge and voted to remand the case to her, asking her to clarify how the PUC should regulate Laser as a public utility (see Shale Daily, May 20, 2011). Other pipeline companies were concerned that if Laser became a public utility, it could set a precedent that would someday move them under the dominion of the PUC (see Shale Daily, July 12, 2011) and citizens groups fretted over pipeline companies using the powers of eminent domain.
Last month Administrative Law Judge Susan D. Colwell recommended that the PUC deny Peregrine’s application “because it fails to meet the standard for certification of a public utility under the Public Utility Code.” The recommendation for denial came because, among other things, Peregrine’s plans would have provided services to affiliated producers and “the application fails to meet the standard set in the Laser case,” Colwell wrote in her recommended decision (RD).
“Although Peregrine disagrees with the RD, it has decided that due to changes in the Pennsylvania natural gas industry since the application was filed in 2010, Peregrine will not file exceptions to the RD and instead files this petition requesting leave from the commission to withdraw its application,” the company said in its latest PUC filing.
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