In This Issue

PHMSA Proposed Underground Natural Gas Storage Facility User Fee

[DOCKET NO. PHMSA-2016-0092]

PHMSA is seeking comments on a proposed approach to determine the user fee assessment for underground natural gas storage facility operators. This is a tiered approach that is similar to the liquefied natural gas (LNG) plant user fee rate structure. The storage capacity for each operator will be determined and operators placed in one of 10 tiers. Higher tiers represent greater storage capacity and a higher user fee obligation, from $12,308 / year for a Tier 1 operator with less than 1,550,000 MCF of storage capacity, up to $142,857 for a Tier 10 operator with more than 85,000,000 MCF of storage capacity (the capacity is calculated by Operator, not by storage site). PHMSA expects these user fees to generate $8,000,000 in revenue to fund their underground storage program, with 25% of the revenue being retained by PHMSA and 75% being shared to help fund state programs (for intra-state facilities). If Congress appropriates some amount less than $8MM, the user fees will be reduced proportionately.

According to the Energy Information Agency (EIA), there are 400 interstate and intrastate underground natural gas storage facilities currently in operation in the US. When PHMSA promulgates regulations for operators of underground natural gas storage facilities, they plan to include the collection of annual reports to incorporate both the capacity and number of wells per facility in the annual report, and discontinue use of EIA data.

Submit comments via the E-Gov Website by January 6, 2017, and reference Docket No. PHMSA–2016–0092.

For a copy of PHMSA’s Notice, which includes the proposed tier structure and fees, contact Jessica Foley.