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ALJ Supports NGPL's Proposed Hydrocarbon Dew Point Level

Over the objection of major producers and other parties, a FERC administrative law judge Tuesday concluded that Natural Gas Pipeline Company of America's (NGPL) proposed hydrocarbon dew point (HDP) safe harbor of 15 degrees Fahrenheit is "just and reasonable."

The Federal Energy Regulatory Commission set the issue of an appropriate HDP safe harbor level on NGPL earlier this year, despite the pipeline's plea that the agency suspend the action until it acted on industry recommendations for natural gas quality and interchangeability standards.

"At the outset, it must be emphasized that I am ruling on a single issue: namely, the appropriate permanent safe harbor hydrocarbon dew point figure for Natural's pipeline. Nothing else is decided here. Other issues, such as a question of a Btu standard, or issues of interchangeability, were beyond the scope of these proceedings," said ALJ Joseph R. Nacy in his initial decision that was issued Tuesday [RP01-503-002].

"I find that Natural's proposed HDP safe harbor of 15 degrees Fahrenheit is just and reasonable under Section 4 of the [Natural Gas] Act, and [is] not otherwise unlawful," he ruled. FERC has the option to accept Nacy's decision in whole or in part, or reject it in whole or part.

NGPL argued that while a 15 degrees Fahrenheit HDP would not allow it to completely eliminate all liquid fallout on its system, it would enable Natural to safely and reliably manage a limited amount of fallout, thus ensuring the operational integrity of its pipeline.

The dew point temperature of gas moving through a pipeline is the temperature at which the flowing gas begins to change from a single gaseous state to a state where liquids begin to fall out from the gas stream.

Major gas producers called for a HDP safe harbor level of 20 degrees Fahrenheit on NGPL's system. They argued that NGPL's proposed HDP level was unnecessarily low and unsupported by any of its filings in the case. Alliance Pipeline supported an even higher HDP level on NGPL -- 25 degrees Fahrenheit.

"Natural has satisfied its burden...to show that its proposed HDP safe harbor is just and reasonable. Using accepted scientific, industry-approved methodology for computing HDP limits, it selected a safe harbor level that will ensure safe and reliable operations under all conditions while also maximizing the gas supply available on its system," Nacy said.

Even the witness for the major producers "admits that a 15 degrees Fahrenheit safe harbor is reasonable," he noted. "Natural does not anticipate imposing the 15 degrees Fahrenheit level on most days and only seeks to impose that level when necessary to ensure operational integrity and to meet downstream customer requirements."

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