The attempt by California regulators to assert jurisdiction over proposed liquefied natural gas (LNG) facilities in Long Beach harbor “casts a cloud of uncertainty” over the development of the project, the project developer told FERC Tuesday.
Sound Energy Solutions (SES), a U.S. subsidiary of Japan’s Mitsubishi Corp., called on the Federal Energy Regulatory Commission to “declare that its jurisdiction over LNG import facilities is plenary, exclusive and preemptive,” and to do so “as soon as practicable.” FERC has been noticeably silent throughout the controversy so far.
In a Feb. 23 protest, the California Public Utilities Commission (CPUC) argued that it had jurisdiction over the siting, construction and operation of Sound Energy’s proposed LNG terminal facilities in Long Beach harbor because the regasified gas would be transported wholly within the state of California. It further said FERC’s authority was limited to the actual importing of LNG under the Natural Gas Act (NGA).
But “separate and differing regulation of natural gas import facilities by numerous coastal and border states instead of the centralized and exclusive federal authority intended by…the NGA is bad law and worse policy,” Sound Energy contends.
“The controversy is immediate, concrete and grave. The CPUC’s defiance of this Commission’s exclusive jurisdiction is a serious threat to the effective administration of Section 3 [of the NGA].”
“The CPUC’s action intrudes upon a field of foreign commerce completely occupied by federal authority.” Moreover, “it asserts a duplicative regulatory jurisdiction that poses the possibility that the state commission will attempt to veto the project even if authorized by FERC.”
In January, Sound Energy filed an application with FERC seeking approval to build the proposed LNG terminal facilities. But the CPUC believes that the application should be filed with its agency.
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