RRC Adopts New Critical Designation Rules

RRC Adopts New Critical Designation Rules
The new rules implement provisions in House Bill 3648 and Senate Bill 3.

The Railroad Commission of Texas (RRC) has announced that it has adopted rules for the critical designation of natural gas infrastructure to help protect Texans in energy emergencies.

The new rules implement provisions in House Bill 3648 and Senate Bill 3 and define natural gas facilities that would be designated as critical gas suppliers and critical customers, the RRC noted. Critical gas suppliers are said to include, but are not limited to, gas wells, oil leases that produce gas, natural gas pipeline facilities, underground natural gas storage facilities and saltwater disposal facilities. Critical customers, which are a subset of critical gas suppliers, are facilities that require electricity to operate.

Senate Bill 3 includes language to allow for certain facilities to apply for an exception to critical designation, the RRC highlighted. However, the newly adopted rules exclude certain types of highly critical facilities from being able to apply for an exception, the RRC said.

“It has been wrongly reported that for $150 any company can be exempted from preparing for winter,” RRC Chairman Wayne Christian said in an organization statement.

“The $150 is a fee set in statute two decades ago for all applications for exceptions. It is just an application fee, not a get-out-of-jail free card. No company will automatically receive an exemption and applications can and will be denied,” Christian added in the statement.

The RRC Chairman noted that the commission adopted a ‘critical designation’ rule to ensure Texas natural gas supply is prepared for future energy emergencies.

“With the passage of this rule, critical facilities including more than 19,000 of the state’s natural gas production facilities will be required to weatherize and be prepared to operate in future winter weather events,” Christian said.

“Despite what you may read in the news, no one is getting a bailout, and no one is getting a loophole,” he added.

RRC Commissioner Christi Craddick said, “meaningful and responsible implementation of Winter Storm Uri legislation has been a top priority for myself and the Railroad Commission of Texas since February”.

“I appreciate the efforts of agency staff and stakeholders, whose hard work and diligence will benefit all Texans,” Craddick added.

RRC Commissioner Jim Wright said, “I am proud of the Railroad Commission’s work to incorporate the comments we received from stakeholders and the public”.

“[This] rule strikes an appropriate balance to ensure those operators that are substantially contributing to the natural gas supply chain are identified and designated as critical while also recognizing the need for electric utilities to have flexibility during load shed events to ensure that electricity is available to the residents and families who need it,” Wright went on to say.

The RRC highlighted that the newly adopted rules address the issue that some critical gas suppliers were not eligible for critical load designation and had their power cut off inadvertently during Winter Storm Uri. Since this fall, RRC inspectors have been visiting gas facilities and leases to observe winter preparation measures. On October 7, the organization issued a notice that asked natural gas operators to take all necessary measures to prepare for the upcoming winter. In the notice, the RRC stated that its highest priority is to ensure that, should another extreme winter weather event occur, all available natural gas under the jurisdiction of the commission in the state is available to be utilized for reliable energy sources for Texans.

Back in February, the Electric Reliability Council of Texas (ERCOT) entered emergency conditions and initiated rotating outages in the face of “extreme winter weather”. In July, ERCOT announced that it had delivered a roadmap to improving grid reliability to Governor Greg Abbott, members of the Texas Legislature and the Public Utility Commission. The roadmap was said to be a comprehensive plan that addresses operational improvements to the Texas power grid.

To contact the author, email andreas.exarheas@rigzone.com

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