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PUC finds that Laser Northeast’s gas gathering service in the Marcellus Shale play is public utility service

On May 19, 2011, the Pennsylvania Public Utility Commission (“PUC”) voted 3-2 to approve a motion by Commissioner Wayne E. Gardner finding that Laser Northeast Gathering Company’s (“Laser”) proposed natural gas pipeline gathering service in Pennsylvania is a public utility service.

The motion remands the case to the Office of Administrative Law Judge for the limited purpose of determining whether the granting of a Certificate of Public Convenience is necessary or proper for the service, accommodation, convenience or safety of the public.  Vice Chairman John F. Coleman, Jr., offered a statement concurring and Commission James H. Cawley offered a descending statement.

Laser’s application seeks authorization to offer natural gas gathering and transporting or conveying service by pipeline to various townships in Susquehanna County.  The PUC majority cited a long line of cases where the PUC and courts have found such service to be public utility service, and agreed with a joint position of Laser, the PUC Office of Trial Staff, and all landowner intervenors on that issue.  A formal PUC Order will be issued in the next few days with remand directions for the Office of Administrative Law Judge to hold further hearings on the public interest issues.

During the course of the proceeding, Laser, OTS, and numerous land owner intervenors entered into a settlement agreement to resolve the differences among these parties.  In the settling parties view, the settlement represents a comprehensive and progressive resolution and provides for reasonable regulation by the Commission, while addressing the safety, eminent domain, landowner and environmental concerns raised by the settling parties and by members of the public who testified at the public input hearings held in July of 2010.  Specifically, the settlement required that Laser adhere to strict construction and operational guidelines for its gathering pipeline system, that it would only use eminent domain as a matter last resort and after all other reasonable options are not feasible, and identify landowner protections and easement terms which will apply to any easement for the pipeline or related facilities.  Commissioner Gardner’s motion requires the OALJ to develop a further record regarding whether these settlement terms are in the public interest.

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