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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James H. Cawley dissented not as to granting withdrawal but as to the issue of whether the prior Orders should be rescinded.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 Laser opposed the pipelines who wanted the June and August Orders rescinded for this very reason.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.

Medical professional liability insurance limits will remain unchanged in Pennsylvania

Christopher Knight on August 2, 2011

Pennsylvania Insurance Commissioner Mike Consedine today made public his determination that the coverage limits required by law for medical professional liability will remain unchanged for 2012. In an announcement much-anticipated by insurers and health care providers, Commissioner Consedine indicated that “it cannot be definitively found that additional basic insurance capacity is presently available and as such…limits of coverage for the primary market and Mcare shall remain unchanged.”

As a result of this determination, physicians and other participating health care providers will continue to be required to obtain primary liability insurance covering them for $500,000 per claim, with an additional $500,000 in excess coverage provided through required participation in the Medical Care and Reduction of Error Fund that is managed by the Insurance Department (“Mcare”).

The Commissioner is required under Mcare’s enabling act to study the medical professional liability market every two years to determine whether the private insurance market is capable of assuming additional liability in the primary layer. (See, 40 P.S. § 1303.711). If such “capacity” had been found by the Commissioner, it would have triggered the step-down and eventual retirement of the Mcare Fund. Instead, the Commissioner’s finding will maintain the status quo in Pennsylvania’s medical professional liability coverage requirements for another two years, absent any new legislation designed to accelerate Mcare’s eventual phase-out.

For more information, or for a copy of the announcement, please contact Chris Knight.

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.

Natural Gas Pipeline Safety Bills Driven by Marcellus Shale Development In PA Move Forward

Thomas Sniscak on April 15, 2011

There are two natural gas pipeline safety bills pending before the Pennsylvania General Assembly: House Bill 344 and Senate Bill 325. Each was met with overwhelming approval in the chamber in which it was proposed, and the passage of either would result in additional safety regulation of the natural gas industry in Pennsylvania by the Pennsylvania Public Utility Commission.

As the law currently stands, the United States Department of Transportation’s Pipeline and Hazardous Material Safety Administration may inspect natural gas pipelines or systems unless they are pipeline public utilities or local distribution public utilities in Pennsylvania that are inspected or regulated by the PUC. The implication of the two bills is that the Federal government cannot keep pace with such non-public utility pipelines or systems particularly due to the need for public utility and non-public utility transport of gas to market in the Pennsylvania Marcellus Shale play. Of the 31 states producing natural gas, Pennsylvania is one of only two that have not charged a state agency with regulatory and safety oversight of natural gas pipelines. The Bills would relieve some of the Federal government’s burden by conferring upon the PUC jurisdiction over intrastate gas transmission, distribution and regulated on-shore pipelines or operations if such pipelines are not public utility pipelines.

After unanimous approval in the House of Representatives, House Bill 344, the natural gas pipeline safety bill sponsored by Rep. Matt Baker and supported by Rep. Tina Pickett, was passed through to the Senate. Similarly, Senate Bill 325, proposed by Sen. Lisa Baker, was passed along to the House of Representatives after nearly unanimous approval by the Senate (but for Senator John Eichelberger).

The passage of either Bill will not change the PUC’s existing jurisdiction over public utility pipelines or local distribution utilities, but will authorize the PUC to inspect and regulate for safety purposes additional non-public utility intrastate natural gas pipelines or systems under the requirements of federal natural gas regulations. Non-compliant companies or system operators would be subject to fines payable into the Commonwealth’s General Fund. Both Bills require all natural gas and hazardous liquid pipeline operators to register with the Commission and require the Commission to investigate pipeline operators, pipeline systems, and reports of unsafe conditions involving pipeline facilities. Under the House Bill, these new responsibilities would be financed by companies’ registration fees and substantial increases in fines for non-compliance; companies could face liabilities up to $100,000 per day and up to $1 million total – more than enough to recover the expected $1.3 million increase in the PUC’s annual costs. The Senate Bill would recover the PUC’s new inspection and regulation costs in the form of an annual per-pipeline-mile assessment.

Both Bills were referred late last week to committees of the General Assembly, and the current versions under consideration may be found by following the links below:

House Bill 344:
http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2011&sessInd=0&billBody=H&billTyp=B&billNbr=0344&pn=0919

Senate Bill 325:
http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2011&sessInd=0&billBody=S&billTyp=B&billNbr=0325&pn=0981

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

Medical professional liability insurance limits will remain unchanged in Pennsylvania

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

Natural Gas Pipeline Safety Bills Driven by Marcellus Shale Development In PA Move Forward

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