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Congress Asked to Resolve Federal, State Permitting Conflict

A major natural gas pipeline group last Monday called on Senate Majority Leader Harry Reid (D-NV) to help "remedy" the conflict between federal and state regulators involved in the permitting of interstate gas pipeline projects as part of legislation that addresses electric transmission siting.

The Interstate Natural Gas Association of America (INGAA) agrees that the "statutory framework" for siting interstate gas pipelines, which places authority in the hands of the Federal Energy Regulatory Commission, "should be instructive as the Congress considers a remedy for the inability to modernize and expand the electric transmission grid," INGAA President Donald Santa said in a letter to Reid. The authority to site and approve power transmission projects currently rests with the individual states, which has resulted in a patchwork of transmission facilities operating under different state rules and policies, rather than an integrated grid.

While the Natural Gas Act (NGA), which gives FERC authority over interstate pipelines, "provides a good model" for electric transmission facilities, "even it is incomplete," Santa said.

"For example, despite well established FERC authority under the NGA, states and other federal agencies retain the ability to delay, deny or unreasonably condition other permits required under federal law. Therefore, even though FERC may authorize the construction of an interstate pipeline based on a finding that it meets 'the public convenience and necessity,' an individual state can still veto a multi-state pipeline project by denying or withholding certain permits," he said.

"The current statutory framework provides no process for resolving such conflicts. Consequently we urge you to develop an effective remedy as part of electric transmission siting legislation that also can be applied to interstate natural gas pipeline siting."

Even with this flaw, Santa conceded that the statutory framework under the NGA was far better than the Federal Power Act, which empowers states to site electric transmission. Because of the more favorable regulatory atmosphere, pipeline companies have invested more than $51 billion this decade to maintain and expand the "world's best" gas pipeline system, including constructing more than 10,800 miles of new, high-capacity interstate pipelines, he said. "In contrast, just over 1,000 miles of new high-voltage (230 kV or greater) interstate electric transmission lines have been constructed in this decade.

"What accounts for such a disparity between new natural gas pipeline construction and new electric transmission construction? Many experts point to the significant differences in the federal statutory and regulatory frameworks for the natural gas pipeline and electric transmission industries."

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