Tyler S. Johnson

Can a marketing affiliate of an oil pipeline purchase transportation at the filed tariff rate and then re-sell this capacity at a lower, non-public rate without running afoul of the Interstate Commerce Act’s prohibition on rebates? On November 22, 2017, the Federal Energy Regulatory Commission (“FERC”) issued an order that addressed...

The Texas Railroad Commission has recently promulgated certain rule amendments designed to clarify how much information a pipeline operator must file to be classified, for TRRC regulation purposes, as a common carrier or a private pipeline. The revisions require pipeline operators to substantiate their claim to be a common carrier or private pipeline when applying for a permit. Currently, the permit application, known as a T-4, requires the pipeline applicant only to "mark [the] appropriate block" to establish its classification as a common carrier or private pipeline. The revised rule,...

At its November 20, 2014 meeting, FERC issued a policy proposal to facilitate the recovery of the costs associated with improving pipeline safety and reducing emissions. Recognizing the fact that several pipeline safety and environmental initiatives will be facing the natural gas industry in the coming months, FERC suggests that pipelines and customers could work together to develop a tracker (e.g., a surcharge on base rates) that recovers those costs associated with pipeline safety and environmental compliance. Because a modernization and safety tracker could be developed faster than...

In an unusual move, on February 21, 2014 the Court of Appeals for the Third Circuit ("Third Circuit") asked the U.S. Attorney General for his opinion as to whether the Federal Power Act ("FPA") preempts New Jersey's Long Term Capacity Pilot Program ("LCAPP"), a finding made by the United States District Court for the District of New Jersey ("District Court") in PPL EnergyPlus, LLC v. Hanna , which is now pending on appeal before the Third Circuit. In recent years, states including New Jersey and Maryland, through different mechanisms, have instituted requirements that the state utilities...

On September 11, 2013, the Department of Energy ("DOE") issued an order authorizing Dominion Cove Point, LNG, LP ("Cove Point") to export to non-Free Trade Agreement ("FTA") countries up to 0.77 Bcf/day of domestically produced liquefied natural gas. This is the fourth order authorizing non-FTA LNG exports, coming after similar orders for Sabine Pass, Freeport, and Lake Charles. The Cove Point order brings the cumulative total of authorized LNG exports up to 6.37 Bcf/day, which is slightly greater than the "low" export case evaluated in the DOE-commissioned LNG Export Study that evaluated...

The Department of Energy ("DOE") recently issued its third order authorizing the export of liquefied natural gas ("LNG") to non-Free Trade Agreement ("FTA") countries. This latest order, for Lake Charles Exports, LLC ("Lake Charles"), will allow exports of up to 2 Bcf/day from the Lake Charles LNG terminal and bring the cumulative DOE-authorized non-FTA exports up to 5.6 Bcf/day. Over the past several years, DOE has received approximately 19 applications to export LNG to non-FTA countries, and it has issued two export authorizations thus far. The first was for Sabine Pass Liquefaction,...

The Department of Energy recently authorized Freeport LNG Expansion, L.P. ("FLEX") to export LNG to non-Free Trade Agreement countries. Importantly, this is the first order on LNG exports issued by the DOE since it collected comments on its two-part LNG Export Study and likely represents the analysis DOE will use in reviewing the queue of pending LNG export applications. FLEX proposes to export 1.4 Bcf/day from the Freeport LNG terminal, which is situated on the Gulf Coast in Texas. After filing its export application, FLEX secured long-term contracts with three entities for 88 percent of...

With the growing capacity constraints on oil pipelines, the Federal Energy Regulatory Commission ("Commission") has recently extended the bounds of what it considers acceptable methods of apportioning limited capacity. In Seaway Crude Pipeline Company LLC , 143 FERC ¶ 61,036 (2013), the Commission approved a new lottery system that will select, at random, new shippers who will be permitted to tender the minimum monthly volume requirement. The catch, however, is that there are approximately 275 new shippers on the system, meaning a given shipper has roughly only a 5 percent chance of winning...

The specter of enforcement actions by the Federal Energy Regulatory Commission is looming large over the energy industries. In the post-election flurry of FERC enforcement activity, FERC curtailed JP Morgan Venture Energy Corp.'s authority to sell power at market-based rates; opened investigations into the rates of two oil pipelines, Wyoming Interstate Company, L.L.C. and Viking Gas Transmission Company; settled with Gila River Power, LLC over allegations of market manipulation in the California energy markets; initiated an inquiry to improve price transparency in the natural gas markets; and...

The Federal Energy Regulatory Commission recently issued a Notice of Inquiry seeking comment on whether and/or how FERC should revise its current policy concerning priority rights on interconnection lines that connect generators to the larger transmission grid. Comments are due on June 11, 2012. While FERC's present policy generally treats interconnection lines as transmission lines and therefore subjects those interconnection lines to FERC's open access policies, FERC has permitted certain exceptions to this policy. For example, FERC may allow the owner, or an affiliate of the owner, of a...

Citing the ever-increasing volume and complexity of physical and financial trading in the regional transmission organizations (RTO) and independent system operators (ISO), the Federal Energy Regulatory Commission (Commission) issued a Notice of Proposed Rulemaking (NOPR) on October 20, 2011. If adopted as a final rule, the proposals in the NOPR will increase dramatically the amount of trading data collected by the Commission for market monitoring. Without altering the role of the market monitors, the proposed rule will augment the oversight responsibilities of the market monitors by providing...