The American Gas Association (AGA) and American Public Gas Association (APGA) gave a thumbs-up to FERC’s proposed rule issued in the wake of Hurricanes Katrina and Rita that would beef up the Commission’s pipeline reporting requirements in the event of pipeline damage that disrupts supply. However, Nevada-based Pauite Pipeline said the rule is vague, overly broad and could sharply raise the reporting burden on pipeline companies while inundating the Commission with insignificant information on minor pipeline events.

The Federal Energy Regulatory Commission issued its notice of proposed rulemaking (NOPR) last month (see Daily GPI, June 13). The NOPR would revise existing regulations by adding the following requirements: that pipeline companies report damage to pipelines that results in a loss of or reduction in service on those facilities; that they report when service is restored on those facilities; they report the information by e-mail or fax; and that they provide the Commission with a copy of an incident report required by the Department of Transportation (DOT) within 30 days. The proposal also would require interstate pipelines to send copies of required damage reports to state commissions.

In proposing the revisions, FERC said it “became aware that, while jurisdictional companies had kept the Commission informed of service interruptions as required by [current regulations during last hurricane season], vital information regarding the physical condition of facilities affecting operation of the pipeline grid remained unknown to the Commission.”

FERC’s existing “reporting requirements are not adequate to permit a reliable ‘snapshot’ of the natural gas infrastructure at any given time,” the NOPR said [RM06-18].

The AGA, which represents local distribution companies, lauded the rule as a method of enhancing public information on gas infrastructure, improving market information and adding to price transparency. AGA noted that the rule would assist the nation’s natural gas consumers in assessing the supply and transportation situation following damaging events. AGA suggested that FERC coordinate with DOT on incident reporting to ensure both agencies receive the information they need with a goal of “streamlining the reporting obligations of the industry.”

The APGA, which represents public gas utilities, said the rule would “enhance the Commission’s ability to take informed, preemptive action when warranted in order to lessen the threat of supply interruptions and other adverse impacts potentially resulting from such damage.

“APGA understands that the new regulation may increase somewhat the reporting burden…but based on the Commission’s analysis, the increased reporting burden would appear to be nominal.”

However, that’s not how Pauite sees it. “Unless the Commission narrows and refines the meaning of the language in the [rule] the Commission may find that the number of reportable incidents covered by the new rule is far more than 35 responses per year from 15 pipelines, as the NOPR estimates,” Pauite said. “The filing by numerous pipelines of a multitude of facility damage incident reports where the incidents involved are of little or no consequence will be unduly burdensome to pipeline companies.

“Refining the rule somewhat to reduce or eliminate the reporting of such incidents will have little or no effect on the Commission’s ability to know or be informed of the extent of damage to the nation’s pipeline infrastructure,” the pipeline company said.

Pauite suggested clarifying the meaning of the word “damage,” and placing qualifiers, such as a period of time, on the phrase “that results in loss of or reduction of service through those facilities” in order to exempt inconsequential incidents. Pauite recommends the Commission exempt from reporting damage to a facility that is fully restored to service within 15 days unless the pipeline company concludes that the incident significantly impaired its ability to provide service to its customers and therefore should be reported.

Pauite also said FERC should exempt LNG storage facilities from the reporting requirements because they already are under strict incident reporting requirements.

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