Power & Pipes

FERC, CFTC, and State Energy Law Developments

In an order addressing Enbridge Energy, L.P.’s (Enbridge’s) nomination procedures, FERC held that it lacks authority to order an oil pipeline carrier to provide an interconnection with another carrier.[1] High Prairie Pipeline LLC (High Prairie) had protested Enbridge’s filing, arguing that the proposed language could allow Enbridge to deny new shippers access to transportation. High Prairie also asserted that while Enbridge has granted interconnections for its affiliates, Enbridge denied High Prairie’s request for a similar interconnection without providing a nondiscriminatory basis for the denial. High Prairie argued that under the Interstate Commerce Act (ICA), FERC can order a pipeline to grant an interconnection if the denial of the interconnection is unjust, unreasonable, or unduly discriminatory, regardless of whether FERC is notified By complaint or protest.

FERC rejected High Prairie’s protest, citing its prior decision in Plantation Pipe Line Co. v. Colonial Pipeline Co.[2] and noting that while High Prairie is a potential connecting pipeline, it “is not a current or prospective shipper that would be protected By the anti-discrimination provisions of the ICA.”[3] In Plantation, FERC dismissed the argument that because the ICA allowed the Interstate Commerce Commission to order interconnections between railroads, FERC similarly should be permitted to order interconnections between oil pipelines. The plain language of the ICA requires carriers to provide facilities to allow for the interchange of traffic between existing lines and existing connecting lines and requires carriers to refrain from discriminating among connecting lines. FERC stated that it imposes a “light-handed regulation” over oil pipelines and that its jurisdiction is limited to the authorization granted under the ICA and any precedent.[4] As it did in Plantation, FERC again held that the ICA does not grant FERC the authority to order an interconnection.

[1]. Enbridge Energy, L.P., 139 FERC ¶ 61,134 (2012).

[2]. Plantation Pipe Line Co. v. Colonial Pipeline Co., 104 FERC ¶ 61,271 (2003).

[3]. Enbridge Energy, L.P., 139 FERC ¶ 61,134 at P 20. On May 17, 2012, High Prairie filed a complaint against Enbridge Energy alleging violations of Sections 3(6), 1(6), 6(1), 1(4), and (6)7 of the ICA and Sections 341.0 and 341.8 of FERC’s regulations. Notice of this complaint was released on May 18, 2012, in Docket No. OR12-17-000.

[4]. Id. at P 27.