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Vol. 14, No. 20 Week of May 17, 2009
Providing coverage of Alaska and northern Canada's oil and gas industry

RCA backs off gas storage regulation

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Faced with some significant unknowns regarding its jurisdiction over natural gas storage facilities that are not operated by a public utility, the Regulatory Commission of Alaska decided in its May 8 public meeting not to open a docket for developing RCA gas storage regulations. Instead the commission will continue to collect material in an information docket that the commission had already opened as a preliminary step of an investigation into the gas storage regulation question.

On April 2, following a presentation by the Alaska Department of Law on potential RCA gas storage jurisdiction, the commission had asked for public comments on the points made in the presentation, a presentation that had indicated that storage operated by a public utility would likely come under regulation, but that the regulatory status of other storage facilities would depend on the specific operational situation for each facility.

Raised questions

The public comments that the commission subsequently received continued to raise questions about the limits of the commission’s jurisdiction, said Commissioner Anthony Price at the May 8 meeting. Without legislative action that clearly specifies the commission’s authority over gas storage, a project to develop regulations would be unwise, he said.

“It’s evident from nearly all the responses that we received, that there’s a question as to the limits for our jurisdiction,” Price said. “… I am reluctant to launch into a very long program … for developing regulations for an uncertain number of storage facilities and providers, without clarity as far as jurisdiction. … What we would have in the end is probably a massive amount of litigation that would go on for years and years and years.”

Moreover, opening a regulations docket might dampen enthusiasm for investment in new Cook Inlet gas storage facilities that will be needed over the next few years. Meantime, the material collected in the information docket would create a record that the commission can use in the event of legislative clarity over gas storage jurisdiction being eventually achieved, Price said.

Commissioner Kate Giard, while supporting a motion not to open a docket for the regulation of non-utility gas storage operations at present, did express some concern that regulated utilities negotiating for unregulated gas storage use could face similar regulatory problems to those encountered when negotiating for gas supplies from unregulated producers.

—Alan Bailey



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