At a public meeting on Dec. 13 the Regulatory Commission of Alaska decided to move ahead with the process of streamlining the procedures for approval of oil and gas pipeline development in Alaska.
The push for simplification resulted from an RCA regulatory requirement for a certificate of public convenience and necessity for operation of a pipeline prior to construction of the pipeline. Applying for a certificate necessitates the filing of pipeline operational information, such as pipeline tariffs, perhaps two or three years before pipeline operations start and at a time when operational arrangements for the pipeline have not been finalized.
This need for an early certificate application only applies to non-utility pipelines. The owner of a utility pipeline a gas pipeline destined for use by a gas utility, for example need not apply for a certificate until the pipeline goes into operation. This difference in regulation results from the two types of pipeline being regulated under different Alaska statutes.
Proposed regulations
In November 2005 RCA proposed new regulations and opened docket R-05-12 to invite comments on its proposals. Those proposals involved a simplified form of certification that would apply to a non-utility pipeline at the time of pipeline construction.
We also believe that a potential pipeline carrier proposing to build a new pipeline should have the option to ask for a certificate that authorizes only construction and not operation, the commission said in its order opening the docket. If we allow a potential pipeline carrier that option, we would not need to require information in its application on operational details, such as proposed tariff rates and rules.
The proposed new regulations separately spelled out the RCA application requirements for the construction or enlargement of a pipeline; the connection to or abandonment of a pipeline; and the transfer of operating authority for a pipeline. And separate certification procedures applied to pipeline construction vs. pipeline operation.
The proposals would have allowed an applicant for a certificate to construct a new pipeline to use a pipeline-right-of-way application as a means of providing pipeline specifications (a right-of-way application contains the information that RCA requires to grant a certificate). The owner would only file a tariff when applying for a certificate to operate a pipeline.
Too complex
But after reviewing numerous comments on the proposed new regulations, the RCA staff concluded that the proposals were unnecessarily complex. And in a letter dated Dec. 8, staff told the commissioners that amending the existing regulations would better meet the simplification goals than developing new regulations.
Staff recommended the following regulation amendments:
A non-utility pipeline owner would need to apply to RCA for a certificate of public convenience and necessity prior to pipeline construction by filing with RCA the pipeline right-of-way agreement or right-of way application. For non-utility pipelines, this procedure would replace the use of the current certificate application forms.
The pipeline owner must file an initial pipeline tariff at least 90 days prior to the pipeline going into operation, but not necessarily at the time the owner applies for a certificate.
If the owner were to elect to file a tariff early, say at the time of pipeline certification, the owner would run the risk of the commission suspending the tariff as a consequence of insufficient information about pipeline operation being available. A tariff suspension would result in a public hearing and the possibility of tariff refunds after the pipeline has started operating. On the other hand, waiting until the 90-day limit before filing the tariff would reduce the risk of a tariff suspension, because of the availability of more complete pipeline operational information.
In either case, the proposed changes create clear paths and options for pipeline carriers to obtain an initial pipeline rate and reduce the potential number of rate filings necessary to make the initial rate final, staff said.
At the Dec. 13 public meeting the RCA commissioners concurred with the staff proposals and decided to post the proposed regulation amendments for public review.
