FERC Announces Alternative Dispute Resolution Process for Adverse Propane Situation In Midwest

(November 20, 2019) — The Federal Energy Regulatory Commission (FERC) announced it will initiate an alternative dispute resolution (ADR) process with pipeline companies, shippers and their representatives to explore actions FERC and industry can take to alleviate propane pipeline constraints in the Midwest.

This action is the result of conversations with and letters from Iowa Gov. Kim Reynolds and several members of the House of Representatives and the U.S. Senate expressing their concerns regarding reports of propane distribution and supply difficulties in the Midwest.

Additionally, yesterday FERC issued an order accepting a proposal by Enterprise TE Products Pipeline Company LLC in Docket No. IS20-66-000, providing emergency transportation service of propane to the Midwest region for a 30-day period.

“The Commission takes this issue seriously,” FERC Chairman Neil Chatterjee said. “We have been actively engaging with stakeholders, and with Capitol Hill and the states, and receiving regular updates from pipeline companies. By bringing the pipelines and shippers to the table, we are building on these efforts and establishing a dialogue focused on exploring concrete solutions.”

Deb Grooms, CEO of the Iowa Propane Gas Association (IPGA) and representatives from the National Propane Gas Association (NPGA) will be meeting today at FERC headquarters to begin discussions for the Alternative Dispute Resolution Process.

On November 15, Iowa Govenor Kim Reynolds signed a proclamation that temporarily allows vehicles that transport propane and anhydrous ammonia to be oversize and overweight. The late harvest and high demand for petroleum products throughout the Midwest have resulted in low supplies of propane as well as difficulty transporting adequate supplies of anhydrous ammonia for agricultural activities. The proclamation temporarily suspends provisions of Iowa Code §§ 321.463 (6) (a) and (b) and 321E.29 and Iowa Admin. Code chapter 761-511 pertaining to movement of oversize and overweight loads of propane and anhydrous ammonia. The proclamation is effective November 16, 2019, and will expire at midnight on December 15, 2019.

Gov. Reynolds has led the state response to the severe propane distribution and supply issues. On October 31st she signed a proclamation easing the hours of service regulations for propane transporters, and continues to be in contact with industry stakeholders and the Federal Energy Regulatory Commission to increase the amount of propane in the pipelines to Iowa.