FERC Decisions Could Halt Energy Flow To Customers

Washington, D.C. – The American Gas Association (AGA) released the following statement regarding activities on February 17, 2022 at the Federal Energy Regulatory Commission (FERC):

“FERC’s actions today could hinder the ability of utilities and customers, including electric generators, to obtain the natural gas they need to meet their responsibility to serve customers affordably and reliably. These policy changes could also lead to further delays in the review process which could impact system resilience and incumber the delivery of low-carbon fuels such as renewable natural gas and hydrogen using the natural gas delivery system,” said AGA President and CEO Karen Harbert.

Pursuant to the Natural Gas Act of 1938, natural gas pipelines have previously sought FERC approval by demonstrating existing or future demand, but FERC’s policy change opens the possibility that emissions criteria could take precedence over energy needs.  This could leave customers without supply and companies that have a statutory responsibility to serve customer needs, such as home heating, out of compliance with state requirements. Putting FERC in the role of a greenhouse gas regulator raises many questions about the scope of its involvement beyond the agency’s statutory jurisdiction and the policy changes will add time and expense to build needed pipeline projects.  Gas utilities are committed to building on our demonstrated progress to reduce emissions but expanding FERC’s role as an environmental regulator will do nothing to accelerate that progress – in fact, could impede companies’ abilities to improve their existing systems or deploy clean fuels such as renewable natural gas.

FERC is issuing a new certificate policy statement for Docket No. PL18-1-000 “Certification of New Interstate Natural Gas Facilities” and will no longer view agreements entered into by utilities for capacity required to serve existing or new customers or for reliability and resilience purposes as sufficient evidence of need. FERC will also seek information about the intended end use of gas, which is regulated by state commissions, during the federal application process. This could create uncertainty if FERC second guesses determinations made by utilities and state commissions as to what is needed to serve retail customers or maintain the reliability of the gas system.

FERC’s Interim Policy Statement in Docket No. PL21-3-000, “Consideration of Greenhouse Gas (GHG) Emissions in Natural Gas Infrastructure Project Reviews,” sets a GHG threshold for when a project would have a significant impact on climate change. FERC will review utility and customers gas usage, something regulated at the state level, and could impose mitigation measures related to the end use of natural gas. FERC’s actions are creating great uncertainty surrounding its review of proposed projects and the scope of FERC’s oversight and authority over natural gas usage.

On February 8, AGA released a bold vision for the future along with a seminal analysis detailing how America’s natural gas, natural gas utilities and delivery infrastructure will be essential to meeting our nation’s greenhouse gas emissions reduction goals, including achieving net-zero emissions.

Learn more at aga.org/netzero