1. Challenges for LDCs in the Age of Modernization
AGA Legal Forum
July 10, 2017
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Pam Anderson

2. Legacy Drivers of LDC Pipeline Construction and Replacement
Extend Distribution System to Serve New Subdivision or Industrial Park
Convert Community or Neighborhood to Natural Gas
Safety, Reliability & Conservation
Cast iron and unprotected steel pipes prone to leaks

3. Legacy Barriers to LDC Pipeline Construction and Replacement
Cost Recovery Uncertain
New Construction is Expensive
CIAC may be required
Replacement Also Expensive
Need certainty of regulatory commission approval

4. Modern Drivers of LDC Pipeline Construction and Replacement
Distribution Integrity Management Plans
49 CFR, Part 192
Environmental Concerns
Greenhouse gas emissions
New Markets
LNG/CNG as vehicle or vessel fuel
Gas-fired electric generation

5. Modern Barriers to LDC Pipeline Construction and Replacement
Cost Recovery (still) Uncertain
Construction Delay
Environmental
Tribal
New Markets Inconsistent with Regulated Utility Model
Local Requirements

6. Environmental – Permitting Delay
Construction Requires Wetlands Mitigation
No Existing Bank Space in the Watershed
Army Corp and State Agency Identified One Site
Owner charging monopoly rates for credits
Suggested Posting a Bond
Not an option
Ratepayers End Up Paying More

7. Environmental –RPS in Reverse
State RPS Goal: 100% Renewable by 2045
“So I have reached the conclusion that Hawai`i does not need LNG in our future. It is time to focus all of our efforts on renewable energy and my administration will actively oppose the building of LNG facilities in Hawai`i.”
Hawaii Governor David Ige, Aug. 2015

8. Tribal Issues
Delay Responses to Requests to Consult on Cultural Resources
May or may not have a deadline
Right to consult ≠ veto
Demand Exorbitant Fees for ROW Renewal
DOI to determine “just compensation”
Can create significant delay to resolve

9. Creative Approach for LNG Infrastructure
Utility Proposed Multi-Use LNG Facility
LDC peaking
Marine fuel for container ships
Sought Pre-Approval of Novel Regulatory Approach
NIMBY
Safety of LNG
Tribal Pushback

10. Local Requirements Construction Emission Reductions
Inconsistencies between jurisdictions
Costs and timing
Emission Reductions
Aspirational and mandatory
Potential benefits not quantifiable

11. Need additional information?
Thank you.
Questions?
Need additional information?
Pam Anderson