AAI Says FERC Should Act Quickly to Update Natural Gas Facilities Certification Policy to Protect Competition and Consumers

AAI filed comments today in Federal Energy Regulatory Commission Docket No. PL18-1-001, a proceeding designed to update the Commission’s over two-decade old policy regarding certification of new interstate natural gas facilities. AAI’s comments focus exclusively on how the Commission’s policy of relying on so-called Affiliate Precedent Agreements (APAs) as evidence of “need” for certificating natural gas facilities raise potentially serious competition and consumers concerns around “regulatory evasion” or “self-dealing.” AAI’s comments explain that such conduct can impair competition and result in higher prices of essential natural gas and electricity, to the detriment of consumers.

AAI’s comments state that updated, strong, and comprehensive Commission policy governing reliance on APAs as evidence of project need is critical to the agency’s mandate to promote competition and protect consumers. AAI’s comments address two major issues. First, addressing the potentially harmful effects of APAs, especially against the backdrop of changes in energy markets and broader concerns over declining competition, should be high priority for the Commission. Second, there are important additional informational requirements, not included in FERC’s most recent Draft Policy Statement, that should be considered in promulgating accurate, comprehensive, and strong policy to address the potential adverse effects of APAs.

AAI’s comments urge the Commission to act expeditiously in producing binding, updated policy containing an accurate analytical framework to address the potential harmful effects of APAs and the agency’s reliance on them as evidence of project need.