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An Overview Of Gas Storage Regulations, Topical Issues, And Storage Facilities

The following post is an excerpt from a report by Regulatory Research Associates (RRA), a group within S&P Global Market Intelligence. To learn more about the full report, please request a call.

On October 23, 2015, a significant natural gas leak was discovered at Southern California Gas Company's Aliso Canyon gas storage facility. The leak from Southern California Gas Company, a subsidiary of Sempra Energy, focused widespread attention on gas storage and safety issues. While California state officials announced on February 18, 2016 that the Aliso Canyon leak was permanently plugged, the incident prompted Congress and state officials to launch investigations, spurred legislation, and new regulations directed at gas storage facilities nationwide. In light of this recent attention, Regulatory Research Associates, an offering of S&P Global Market Intelligence, analyzed publicly available information at the Federal Energy Regulatory Commission related to gas storage regulation, rates, and other issues, and published a topical special report titled FERC Regulation of Gas Storage – A Primer on December 21, 2016, summarizing its findings.

The new report includes a brief history of gas storage regulation, a description of how gas storage rates are set, and how the authorized ROE is established for gas pipelines and storage facilities. RRA also collected and analyzed publicly available data on current storage working gas capacity at the 54 companies that operate 213 active underground storage facilities throughout the U.S. that are listed on FERC's website and subject to FERC jurisdiction.

The report found that the three largest gas storage operators by working gas storage capacity are TransCanada subsidiary Columbia Gas Transmission, MDU Resources subsidiary Williston Basin Interstate Pipeline Company, now known as WBI Energy Transmission, and Dominion Resources' subsidiary Dominion Transmission. The report includes a table of the 54 companies included in FERC data and ranks them by working gas storage capacity.

The three largest gas storage operators by net gas storage plant in service, calculated as total storage plant in service net of total storage depreciation, are Dominion Transmission, Columbia Gas Transmission, and Natural Gas Pipeline Company of America, which is jointly owned by Kinder Morgan, Inc. and Brookfield Infrastructure Partners L.P. The report includes a table of the 40 companies included in FERC data and ranks them by net gas storage plant in service.

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