PHMSA Underground Natural Gas Storage Facility User Fee

[Docket No. PHMSA-2017-0129]

On December 8, 2017, PHMSA published a notice and request for comments in the Federal Register titled: ‘‘Underground Natural Gas Storage Facility User Fee’’ seeking comments from underground natural gas storage facility (UNGS) operators on a proposal to use UNGS annual report data in the user fee rate structure. (See related article in the January 2018 edition of the DOT Pipeline Compliance Newsletter.) During the one-month response period, PHMSA received comments on the proposed UNGS user fee billing methodology from WBI Energy Transmission Inc., and National Fuel Gas Supply Corporation. The comments can be found at in Docket Number PHMSA–2017–0129.

PHMSA responded that each well penetrating an underground natural gas storage reservoir represents a risk. Currently, PHMSA intends to apply a consistent level of regulatory oversight to all wells, regardless of size. As PHMSA implements its underground storage inspection program, they may gain insights leading to a user fee methodology more reflective of regulatory oversight effort. PHMSA has used UNGS annual report data about the number of wells in the FY 2018 user fee rate structure for the Pipeline Safety Fund’s Underground Natural Gas Storage Facility Safety Account. In future years, the final tier boundaries and user fee per operator may differ slightly from those listed based on the annual report data at the time the rate structure is established.

Tier Amount (% of Total) Tier Boundaries
1 $160,000 (2%) 4 wells or less
2 $32,000 (4%) 4 to 7 wells
3 $400,000 (5%) 7 to 12 wells
4 $480,000 (6%) 13 to 19 wells
5 $640,000 (8%) 19 to 27 wells
6 $800,000 (10%) 28 to 45 wells
7 $960,000 (12%) 46 to 68 wells
8 $1,040,000 (13%) 69 to 100 wells
9 $1,200,000 (15%) 101 to 377 wells
10 $2,000,000 (25%) 378 wells or more
For a copy of the full notice addressing the comments received, contact Jessica Foley.

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