TC Energy Receives FERC Approval for Northwest Xpress Gas Pipeline Expansion Despite Opposition

[Editor's Note: This story has been updated from a previous version posted on April 21 to reflect clarification regarding the nature of TC Energy's expansion project. The GTN pipeline system is already built and spans 1,400 miles. The Project involves upgrades to existing compressor stations rather than the expansion of the pipeline itself.]

By Mary Holcomb, Digital Editor

(P&GJ) — TC Energy's plan to expand the capacity of its Gas Transmission Northwest Express pipeline system by 150 million cubic feet per day (MMcf/d) received the green light from the Federal Energy Regulatory Commission on April 16.

In its decision, FERC addressed arguments raised during rehearing and dismissed a stay request concerning Gas Transmission Northwest's (GTN) proposed natural gas compression facilities project.

The Project involves modifications to existing compression facilities at various locations along GTN's pipeline system. These modifications aim to increase the capacity of the system to provide additional firm transportation service from the Kingsgate Meter Station in Idaho to the Malin Meter Station in Oregon. The cost of the expansion project is approximately $75 million.

The expansion plans involve boosting the capacity of three existing GTN compressor stations:

• Increasing the total certificated horsepower (HP) at the No. 5 Athol Compressor Station in Idaho.
• Modifying the No. 7 Starbuck Compressor Station in Washington to accommodate additional compression capacity.
• Upgrading the No. 10 Kent Compressor Station in Oregon to enhance its horsepower capabilities.

The existing system is a 1,377-mile (2,216-km) pipeline system that transports natural gas from Kingsgate, British Columbia, to communities in Washington, Oregon, and California, boasting a capacity to deliver as much as 2.7 billion cubic feet per day (Bcf/d). 

The Commission initially authorized the project on October 23, 2023, permitting the installation, construction, modification, and operation of certain compression facilities.

Following the Commission's authorization, several parties, including environmental organizations and state entities, filed rehearing requests challenging the Certificate Order, with accompanying motions for a stay of the project pending further review.

The States are concerned that the Project may exceed the budget, burdening current customers. They argued that the Commission erred in allowing GTN to recover $75.1 million in expansion costs over 50 years, despite indications suggesting a shorter project lifespan of 30 to 33 years.

In the filing, they contended that the project could result in approximately $20 million in outstanding costs after the initial agreements lapse. Concerned that without new customers post-agreement, all customers would bear the remaining costs, they question the necessity of the project and anticipate a potential long-term decline in gas demand.

Commissioner Allison Clements dissented from the order on rehearing for Gas Transmission Northwest's GTN Xpress Project, citing discrepancies between GTN's sworn affidavits and its responses to staff data requests. These contradictions, she argued, cast doubt on the necessity and benefits of the project, urging the Commission to reconsider its decision in accordance with its obligations under the Natural Gas Act and the Administrative Procedure Act.

While rehearing requests are typically deemed denied after a certain period, FERC decided to modify the discussion in the Certificate Order while reaching the same overall result in the proceeding. This decision was made in accordance with the Natural Gas Act, allowing for adjustments in the review process.

GTN conducted a binding open season and received precedent agreements from shippers, including Cascade Natural Gas Corporation, Intermountain Gas Company, and Tourmaline Oil Marketing Corporation, for the entire firm transportation service offered by the expansion facilities.

Despite challenges raised during the rehearing process, FERC upheld its previous determination that the project is justified based on demonstrated need and aligns with the Commission's Certificate Policy Statement. This statement considers various factors, including precedent agreements, demand projections, and potential cost savings.

FERC rejected requests for a stay of the project and reaffirmed its commitment to a thorough review process to ensure compliance with regulatory standards and environmental considerations.

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