A new FERC decision veers away from congressional intent not to burden intrastate pipelines with interstate policies.
J. Michel Marcoux is a partner in Bruder, Gentile & Marcoux, L.L.P., a law firm in Washington, D.C.
State commissions can set intrastate natural gas pipeline transportation rates except when the intrastate pipeline moves gas in interstate commerce. Then, the Federal Energy Regulatory Commission (FERC) regulates the rates under evolving Natural Gas Policy Act of 1978 (NGPA) standards. Two recent FERC orders in a GulfTerra Texas Pipeline L.P. (GulfTerra, formerly EPGT Texas Pipeline L.P.)1 rate case make new precedent for NGPA intrastate pipelines providing interstate transportation.2
The GulfTerra orders advance several FERC-favored techniques to propose NGPA intrastate pipeline rates for interstate transportation service. FERC takes care not to burden the intrastate pipeline with some aspects of interstate, Natural Gas Act (NGA) regulation. On other matters, however, FERC either requires conformity to interstate pipeline rate policies or adopts state rate approaches for federal purposes.