Obama Signs New Pipeline Safety Bill; PHMSA starts rulemaking on EFVs

January 2012, Vol. 67 No. 1

"Our concerns have largely been addressed by the final rule," Soto explains. The FERC assuaged AGA concerns by dropping a requirement from the proposed rule. It stated that if more than one affiliate of the same entity participates in such an open season, then none of those affiliates may release any capacity obtained in that open season pursuant to a pro rata allocation to any affiliate, or otherwise allow any affiliate to obtain the use of the allowed capacity. "We appreciate them taking that step," Soto emphasized.

The final rule says that interstate pipelines do not have the responsibility for determining whether any bidders for capacity are "affiliated." The bidders, be they gas and electric utilities that are part of the same parent company, or subsidiaries of an industrial company, must make that determination themselves, and are subject to enforcement if they make the wrong determination.

The final rule adds a new section to the FERC regulations. It prohibits multiple affiliates of the same entity from bidding in an open season for pipeline capacity in which the pipeline may allocate capacity on a pro rata basis, except in cases where an affiliate has an “independent business reason” for submitting a bid.