NIMBYs and Environmental Groups Win First Round Before PUC Against Sunoco Pipeline

Sunoco’s proposed Mariner East pipeline that would transport natural gas liquids (NGLs) from Pennsylvania’s rich Marcellus Shale production in Western Pennsylvania to processing plants in southeastern Pennsylvania, received a blow from Pennsylvania Public Utility Commission ALJs on July 23, 2014.

Under Pennsylvania law, if the PUC finds public utility buildings or structures to be “reasonably necessary,” they are exempt from local zoning.  Seeking such an exemption for the 18 pump stations and 17 valve control stations enclosed in metal buildings that it plans to install in 31 separate locations in order to carry the NGLs across Pennsylvania, Sunoco Pipeline filed petitions with the PUC seeking such an exemption and requesting a finding that the buildings are “reasonably necessary” for the operation of its pipeline.  The rub is that the exemption is not available unless the applicant is a “public utility,” and under recent PUC decisions, the determination of whether an entity is a public utility has gotten less and less predictable.

In reaching their conclusion the ALJs relied on a number of factors, ranging from Sunoco’s recent abandonment of service on portions of the line to questions about whether the new proposed service transporting propane and ethane is subject to regulation at all, and, even if it is, whether the service to be provided will be, as required under the statute, “to or for the public.”

The ALJs summarized Sunoco’s petitions as “premature at best” because Sunoco’s applications to operate its NGL service from west to east are still pending before the Commission in other dockets, and its status as a public utility entitled to the exemption is not clear.

Sunoco has the opportunity to file exceptions to the ALJs’ decision to the PUC.

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