Senate Bill 928 Would Provide New Authority to the PUC to Authorize New Pipeline Projects Based On Siting Considerations
November 6, 2017
Senate Bill 928 introduced by Senator Dinniman, would provide new authority to the Pennsylvania Public Utility Commission (PUC) to authorize new pipeline projects based on siting considerations.
The proposed Act would mandate pipeline siting review by the PUC. Presently, the PUC exercises siting authority over overhead electric lines with a design voltage greater than 100,000 volts. It does not exercise siting authority over other overhead electric lines, power plants, or any underground pipelines. It does, however, enforce federal pipeline safety regulations concerning the design, operation, inspection, replacement and maintenance of pipeline facilities in order to protect people and the environment from the risks of transporting natural gas by pipeline.
The proposed Act, which is based largely on the PUC’s procedure for locating and constructing overhead high voltage transmission lines (52 Pa.Code § 57.71-57.77),[1] would require the PUC to review – and approve – the construction of [a] the pipelines of a gas distribution company with a nominal inside diameter of eight (8) inches or greater and [b] the pipelines of a pipeline company, regardless of size.
Specifically, under the proposed Act, the PUC can only authorize “pipeline projects” where it determines that: (1) there is a need for the proposed pipeline; (2) the proposed pipeline “will not create an unreasonable risk of danger to the health and safety of the public;” (3) the proposed pipeline is in compliance with applicable statutes and regulations providing for the protection of natural resources; and (4) the proposed pipeline “will have minimum adverse environmental impact, considering the needs of the public for the pipeline, the state of available technology and the available alternatives.” PUC is also given the authority to impose conditions on or modifications of the location, construction, operation or maintenance of the proposed pipeline as it “deems appropriate.”
The proposed Act also requires applicants to submit a detailed application to PUC to allow the agency to make its determination. In addition to more typical application requirements, the proposed Act requires applicants to conduct an alternatives analysis for the proposed route of the pipeline that describes the corridor planning methodology and which compares the merits and detriments of each route. Additionally, the legislation also could be interpreted to require an environmental impact study of the proposed pipeline project as part of the application and, at a minimum, it requires a description of the efforts that have been and will be made to minimize the impact of the proposed pipeline “upon the environment and scenic and historic areas, including, but not limited to impacts, where applicable upon land use, soil and sedimentation, plant and wildlife habitats, terrain, hydrology and landscape.” The bill also requires consultation with the PA Department of Environmental Protection and at least two public hearings in the counties where the construction will take place.
In all, the proposed Act appears to set up a process that is analogous in many ways to the National Environmental Policy Act (“NEPA”) for federal projects such as interstate pipelines that require certification by the Federal Energy Regulatory Commission (”FERC”). Like NEPA, the proposed legislation requires PUC to consider the potential environmental impacts and weigh alternatives of the proposed pipeline project. Additionally similar to NEPA, the bill also imposes public transparency requirements and ultimately provides that the PUC can only authorize a new pipeline project when it determines that the proposed pipeline will have a minimum adverse environmental impact. The burden of making these demonstrations will fall under the applicant, which could potentially add significant time and expense to new pipeline projects, especially those intrastate pipeline projects that do not required FERC certification.
While the legislation appears to be designed to try to create a state review process for intrastate gas pipelines that are not otherwise being reviewed from a siting and need standpoint at the state level, it could have unintended consequences. Certain existing pipelines (such as cast iron and unprotected steel) can be “high-risk” pipelines that may pose a potential threat to life and property. Throughout Pennsylvania, efforts are being made by distribution companies (under the PUC’s oversight) to accelerate the replacement of such pipelines. However, the legislation as written, these efforts could be delayed or stopped. the repair or replacement of an existing pipeline appears to fall within the meaning of “construction project.” Any new pipeline constructed by a PUC regulated company in order to serve new areas or customers is already reviewed and approved by the PUC either in a certificate of public convenience process (if the utility is seeking an expansion of its existing service territory) or in the utility’s “Long Term Infrastructure Improvement Plan” which is reviewed and approved by the PUC. The logic of creating a new and rigorous review process in addition to these existing procedures seems questionable.
[1] The Public Utility Commission adopted Interim Guidelines in 2010 to supplement its regulations, which were adopted in 1978 at a time when transmission siting projects were primarily intrastate in nature. Re: Interim Guidelines for the Filing of Electric Transmission Line Siting Applications, Docket M-2009-2141293, Final Order entered November 5, 2010.
This Eckert Seamans Energy and Utilities Blog is intended to keep readers current on matters affecting businesses and is not intended to be legal advice. If you have any questions, please contact Carl Shultz at (717) 255-3742 – cshultz@eckertseamans.com – or Dan Clearfield at (717) 237-7173 – dclearfield@eckertseamans.com.
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