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PUC Approves Withdrawal of Laser Northeast Gathering Co.’s Application for Public Utility Status

Thomas Sniscak on November 11, 2011

The Pennsylvania Public Utility Commission (“PUC”) granted Laser Northeast Gathering Co.’s (“Laser”) petition to withdrawal its application to become a public utility.

By a 3-2 vote adopting a motion by PUC Vice Chairman John F. Coleman Jr., the PUC approved Laser’s petition to withdraw its application and denied the request of certain parties to rescind its prior Orders in the case. PUC Commissioner Pamela A. Witmer and Commissioner James H. Cawley dissented not as to granting withdrawal but as to the issue of whether the prior Orders should be rescinded.

On Jan. 19, 2010, Laser filed for a certificate of public convenience to begin to offer gathering and transporting or conveying service by pipeline to the public in several townships in Susquehanna County.

In June 2011, after a series of public input and evidentiary hearings, the PUC issued an Order in which it determined that Laser’s proposed service was a “public utility” service but remanded the proceeding for a determination, among other things, as to whether Laser’s proposed service was “necessary or proper for the service, accommodation, convenience, or safety of the public” under Section 1103(a) of the Public Utility Code, 66 Pa. C.S. § 1103(a). On Aug. 25, 2011, the Commission provided clarification to the June 2011 Order by further defining the parameters of the determination that Laser’s proposed service meets the definition of a “public utility.”

Laser filed to withdraw its application on Sept. 8, 2011 citing to the fact that its business plans had changed and it no longer intends to provide service to the public. The motion and upcoming order based upon the motion are significant because, as the motion recognizes, it tells the industry the rules of the road for being or not being a public utility pipeline. Laser opposed the pipelines who wanted the June and August Orders rescinded for this very reason.

Laser was represented in the matter by Hawke Mckeon & Sniscak’s Tom Sniscak and Bill Lehman.

PA PUC Enters Written Decision In Hms’laser Marcellus Pipeline Application Case

Thomas Sniscak on June 17, 2011

On June 4, 2011, the PUC reduced its majority motion to a written order and has remanded the case to an Administrative Law Judge for a ruling on whether the service and terms of the partial settlement are in the public interest. The Order essentially follows Commissioner Wayne E. Gardner’s Motion, which was joined by Chairman Robert F. Powelson and Vice-Chairman John F. Coleman, Jr. at the May 19, 2011 public meeting. It accepted the position of Laser and other parties, such as the PUC’s Office of Trial Staff, that the service proposed by Laser will be public utility service because it will be open to any member of the public requiring service to the extent of capacity.

Notably, the Order states that “not all gathering and transportation service providers will be considered public utilities and subject to the Commission’s jurisdiction.” Specifically, in resolving public utility status questions, the Commission will consider whether “service is provided to a defined, privileged and limited group when the provider [pipeline] reserves its right to select its customers by contractual arrangement so that on one outside of the group is privileged to demand service.”

The Order also clarifies the law regarding the imposition of voluntary versus involuntary conditions to a certificate of public convenience. In doing so, the majority found that the settlement conditions do not result in an expansion of PUC jurisdiction.

Finally, the Order leaves the door open for light-handed regulation of service and rates akin to present natural gas transportation service under the PUC’s regulations. Under that, a maximum approved tariff rate is filed and approved but the utility and customer more commonly negotiate a tailored contract rate and individualized service terms.

HMS’ Thomas J. Sniscak and William E. Lehman represent Laser in this proceeding.

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

William Lehman on May 27, 2011

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.

PUC Approves Withdrawal of Laser Northeast Gathering Co.’s Application for Public Utility Status

PA PUC Enters Written Decision In Hms’laser Marcellus Pipeline Application Case

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

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