FERC last Thursday issued a final rule that expands the scope of the agency’s blanket certificate program to include the construction of certain interstate natural gas pipeline mainlines, storage field facilities 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) last November asked FERC to permanently change the blanket-certificate requirements to allow companies to carry out larger upgrades without first going through the lengthy certificate process at FERC (see NGI, Nov. 28, 2005). Traditionally, blanket certificate authority has been limited to minor gas projects.

The Federal Energy Regulatory Commission’s final rule for the most part accedes to the wishes of the two gas groups, and does not appear to depart much from the proposed rule that was issued in June [RM06-7]. Blanket certificates are granted to companies that already hold a certificate of public convenience and necessity under Section 7 of the Natural Gas Act. The program allows blanket certificate holders to improve and upgrade existing gas facilities that meet certain criteria without the need for case-by-case certificate approval for each project.

FERC’s action “will eliminate regulatory barriers and speed needed development of energy infrastructure that will ultimately benefit our nation’s energy consumers,” Chairman Joseph Kelliher said. “Our actions reflect the changing nature of the natural gas market, including the need for more storage capacity and increased use of liquefied natural gas.”

The rule raises the dollar limits for blanket construction projects. For projects that are not required to give prior-notice to FERC, the per-project cost limit is $9.6 million compared to the previous limit of $8.2 million. And for projects that do require prior-notice, the per- project cost limit has been raised to $27.4 million from $22 million.

The final rule clarified that gas pipelines may charge different rates to different customers for the same service based on when a customer signs up for service, as long as all potential shippers have an equal opportunity to qualify for the more favorable rates.

It also expands the time frames for landowner notification of projects that do not require prior notice to 45 days from 30 days, and to 60 days from 45 days for prior-notice projects.

The rule declared “moot” a joint petition of Kinder Morgan Inc. and Northern Natural Gas requesting that mainline facilities serving ethanol plants be eligible for inclusion in the blanket-certificate program. FERC noted it did not have to rule on the petition because the relief sought by the pipelines had been effectively granted in the order, which includes mainline facilities regardless of their intended purpose.

The rule takes effect 60 days after publication in the Federal Register.

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