Michigan Attorney General (AG) Bill Schuette and companies backing the proposed Nexus natural gas pipeline are in disagreement over when the pipeline will enter service, with Schuette saying the lack of a quorum at FERC will delay it until 2018 but the companies predicting it will be 4Q2017.
The 255-mile Nexus pipeline, which is being jointly developed by DTE Energy Co. and Spectra Energy Corp., would move 1.5 Bcf/d of Marcellus and Utica shale gas from eastern Ohio into Michigan, connecting Appalachian gas to markets in the Midwest and Canada. Enbridge Inc. acquired Spectra earlier this year.
The disagreement surfaced after Schuette filed a brief last week with the Michigan Public Service Commission (MPSC), in a case [No. U-18143] to discuss plans by DTE Electric Co., a DTE subsidiary, to implement a power supply cost recovery plan (PSCR) in its rate schedules for 2017.
The Federal Energy Regulatory Commission has been without a quorum since the departure of Norman Bay, who had served as the Commission’s chairman before announcing his resignation in January. President Trump then named Commissioner Cheryl LaFleur to serve as acting chairman. A flurry of activity took place before Bay’s last day on Feb. 3, but several major natural gas pipeline projects, including Nexus, did not win last-minute approval.
“DTE Electric Co. cannot demonstrate that the inclusion of the Nexus pipeline related expenses in its 2017 PSCR factor is warranted,” Schuette said, later adding that the pipeline’s backers “expected approval of the certificate of necessity (CON) by FERC in February in order to put the Nexus pipeline into service by Nov. 1. However, as of today there was still no final approval and the quorum issues at FERC…remain an obstacle to moving the project forward.
“Given the roughly nine-month lag time between approval and putting the pipeline in service…even if FERC were in the position today to approve the CON, it would still be 2018 before the pipeline could reasonably be put into service. There is no evidentiary support in the record to sustain [DTE Electric’s] request to include Nexus gas transportation expenses in this PSCR plan this year.”
A footnote in the filing clarifies that Schuette was not making a concession that Nexus expenses should not be recoverable in future PSCR years. Schuette filed the brief in support of the Michigan Environmental Council and the Sierra Club.
Adam Parker, a spokesman for Nexus Gas Transmission LLC, disagreed with the AG’s assessment.
“While Nexus’ certificate application remains pending before FERC, the record supporting the FEIS [final environmental impact statement] and application are complete and ready for prompt FERC approval once a quorum is restored,” Parker told NGI’s Shale Dailyon Monday. “We are exploring all opportunities to improve our schedule and are actively working with our contractors and other relevant parties to ensure a safe and responsible construction plan is in place to achieve a targeted Q4 2017 in-service.”
DTE spokesman Peter Ternes concurred. “We are still projecting to have the Nexus project completed this year,” he said Monday.
Nexus received afavorable draft environmental impact statement from FERC last July.
Last January, the MPSC agreed with an administrative law judge’s finding that DTE Electric’s plans to contract with Nexus to buy natural gas for power generation appear “reasonable and prudent,” but it denied the utility permission to recover power supply costs for the $2 billion project from its customers without an evidentiary hearing.
Earlier this month, the Sierra Club urged FERC to wait until the MPSC ruled on capacity commitments to Nexus before issuing a Natural Gas Act certificate for the pipeline.
DTE has encountered pushback in Michigan over its proposed commitments to Nexus, including a 75,000 Dth/d commitment from DTE Gas Co. and a 30,000 Dth/d commitment from DTE Electric. Regulators and opponents, including ANR Pipeline Co., have questioned the affiliated nature of the transactions and whether DTE Gas or DTE Electric properly considered alternatives, including the competing Rover Pipeline project.
Meanwhile, lawmakers from both parties have urged Trump to make nominations to FERC, but so far none have been forthcoming. New FERC commissioners must be confirmed by the Senate.