PA Utility Commission Reconsiders Decision to Grant Public Utility Status to Pipeline Company

The Pennsylvania Utility Commission (PUC) is reconsidering its decision to grant pipeline company Laser Northeast Gathering status as a public utility with the power of eminent domain (see MDN’s previous coverage of that decision here).

The trade association representing Pennsylvania’s oil and gas industry convinced the state Public Utility Commission to reconsider making natural gas pipeline company Laser Marcellus Gathering Co. LLC a utility.

The determination of utility status would expose pipeline companies to an additional layer of regulation, but also give the companies the right to condemn property by eminent domain, a contentious issue in areas of Marcellus Shale drilling.

The industry group said while Laser’s proposed customers – natural gas producers – are part of the public in some way, calling them "the public" is a contortion of the Public Utility Law.

PIOGA is also concerned because Laser Marcellus, in its negotiations with residents and environmental groups, agreed to an unprecedented level of regulatory oversight, including conditions of eminent domain, pipeline siting and environmental matters. Just because Laser Marcellus and citizen and environmental groups agreed to those conditions – it may give the commission jurisdiction over those matters.

Oil and gas and environmental attorney Steven Saunders of Scranton said the majority of the commission who initially supported Laser’s utility application had a "thin argument" and the move would set the table for a "litigation nightmare."

"You have Laser, which made the calculation that despite the additional regulation, having eminent domain – even as a last resort – was cost beneficial," he said. "The opposite companies don’t want the additional regulation and believe they can acquire land without condemnation."*

*Wilkes-Barre The Citizen’s Voice (Jul 16, 2011) – Trade association asks PUC to reconsider public utility status