- PUC Gives Nod to Eminent Domain Power for Pipeline Company
Monday, May 23, 2011
Knight Ridder/Tribune Business News
by David Falchek, The Times-Tribune, Scranton, Pa.
The state Public Utility Commission intends to declare natural gas pipeline company Laser Northeast Gathering a public utility, giving it the power to condemn private property by eminent domain.
By a 3-2 vote, the commission tossed back to Administrative Law Judge Susan D. Colwell her recommendation to deny Laser's application for a "certificate of public convenience," which would grant it utility status and the right to wield eminent domain.
The narrow majority of the commission disagreed with Judge Colwell's arguments that the commission lacked the authority to regulate the activity and that Laser didn't meet the definition of a public utility.
Rejecting Judge Colwell's legal reasoning, the commission majority sent the recommendation back with a narrow charge: Determine if granting a certificate of public convenience is in the public interest.
In a fiery dissent, Commissioner James Cawley warned of "grave implications for individual Pennsylvanians and their communities." He said his colleagues' decision would upset the balance in easement negotiations, giving more power to pipeline companies.
"The upset of this balance is not in the public interest and is sufficient reason to deny Laser's application," Mr. Cawley wrote, joined in his opposition by Tyrone Christie.
Joining Mr. Gardner in remanding the Laser requests were Robert Powelson and John Coleman Jr.
Collection and gathering pipelines will directly impact more property owners than the gas wells expected to multiply over the next several decades tapping Marcellus Shale gas. Every well has an estimated lifespan of 30 to 40 years and has to be connected to an interstate pipeline.
Judge Colwell argued a pipeline collection and gathering system did not serve the "public," but rather natural gas well owners. But the commission said the legal definition of public "is not confined to the entire public," but rather the individuals or companies requiring the service.
Also at the meeting, Mr. Gardner said in his motion the PUC has the authority to enforce voluntary environmental safeguards to which Laser consented. Environmental group Earthjustice, which intervened in the case, said it is pleased the PUC recognized its ability to enforce those environmental protections reached in a side agreement with Laser.
"Gas development has proceeded at a frenzied pace in Pennsylvania and along with it has come countless spills, accidents, explosions," said Earthjustice attorney Megan Klein. "Finally, state officials have a chance to do something right from the outset, rather than rushing to clean up the aftermath."
But those protections in the Laser agreement may not be enforced across the board.
State Consumer Advocate Irwin "Sonny" Popowsky is concerned pipeline companies in Pennsylvania will continue to be free to opt in or opt out of regulation.
"At some point, the commission has to decide generically whether this activity of natural gas collection and gathering is going to be regulated as a utility activity or not," he said. "You can't just have companies deciding whether or not they get to be public utilities."
Based in South Abington Twp., Laser Northeast Gathering is run by former Southern Union executive Tom Karam. The company began building its 31-mile pipeline in February and plans complete it by the fall.
Copyright (c) 2011, The Times-Tribune, Scranton, Pa.
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