Report: FERC Encourages Pipeline Overbuilding

first_imgReport: FERC Encourages Pipeline Overbuilding FacebookTwitterLinkedInEmailPrint分享Sean Sullivan for SNL:“The Federal Energy Regulatory Commission facilitates overbuilding,” the Institute for Energy Economics and Financial Analysis said in a study released April 27. “The high rates of return on equity that FERC grants to pipeline companies (allowable rates of up to 14%), along with the lack of a comprehensive planning process for natural gas infrastructure, attracts more capital into pipeline development than is necessary.”The report’s authors also found “FERC’s approach to assessing the need for such projects is insufficient.”The report said the $9 billion in costs for both the Mountain Valley and Atlantic Coast projects would likely be added to the price consumers pay for gas or be absorbed as a loss by project investors. In addition, IEEFA said landowners were at risk of sacrificing property to projects that are not needed.IEEFA recommended that FERC suspend the applications for the Atlantic Coast and Mountain Valley pipelines “until a regional planning process can be developed for pipeline infrastructure; that FERC lower the returns on equity granted to pipeline developers; and that an investigation be conducted into the relatively high failure rate of new pipelines.”IEEFA energy analyst Cathy Kunkel, the lead author of the study, said the institute found in many cases, including Mountain Valley and Atlantic Coast, the pipelines and its customers are affiliates, which she said calls into question the FERC analysis of need.Full article ($): Pipe opponents call on FERC to halt project reviews to stop ‘overbuilding’last_img

Leave a Reply

Your email address will not be published. Required fields are marked *