In 2010, the Federal Energy Regulatory Commission (“FERC”) issued a Notice of Inquiry seeking comments on whether and how holders of firm capacity on intrastate natural gas pipelines providing interstate service under section 311 of the Natural Gas Policy Act of 1978 and Hinshaw pipelines providing such services under limited jurisdiction blanket certificates under section 284.224 of FERC’s regulations should be permitted to allow others to make use of their firm interstate service, including to what extent buy-sell transactions should be permitted. The Notice of Inquiry followed an earlier FERC determination that its prohibition against buy-sell transactions applied to intrastate and Hinshaw pipelines providing interstate services. FERC explained that the prohibition, together with the shipper-must-have-title rule, help enforce the central requirement of open access that pipelines provide service without undue discrimination or preference by ensuring that capacity is allocated in a transparent manner.
Some AGA members own and/or operate natural gas pipelines and local distribution systems that have been and may be classified as Hinshaw pipelines, i.e., pipelines that operate in interstate commerce but are exempt from FERC jurisdiction under the Natural Gas Act because they are wholly within one state and regulated at the state level. Apart from providing local service, some Hinshaw pipelines conduct transactions in interstate commerce under limited jurisdiction blanket certificates issued pursuant to § 284.224 of FERC’s regulations. AGA believes that FERC should not impose additional regulatory requirements on Hinshaw pipelines given the limited nature of the interstate transactions in which they engage. To the extent FERC believes additional requirements may be necessary, AGA contends that FERC should limit any such requirements to Hinshaw pipelines whose businesses are predominantly interstate and whose jurisdictional services significantly affect interstate markets. In the alternative, at a minimum FERC should establish a de minimis exemption for those Hinshaw pipelines whose jurisdictional services are insignificant.
AGA Contact: Andrew Soto, (202) 824-7215, email@example.com