EDF Raises Concern Over Utility Affiliate Relationships in Pipeline Projects

The funding of new pipeline capacity by pipeline developers and regulated utilities that are part of the same corporate group has been raised as a concern by the Environmental Defense Fund (EDF). In a November 29 letter to the New York State Public Utility Commission (NYPUC), EDF cited the fact that the Consolidated Edison Company of New York, Inc. (Con Ed) had entered into an agreement with the Mountain Valley Pipeline (MVP) for gas transportation services without disclosing to NYPUC that it was in fact a part owner of the MVP. EDF went on to point out that such a “financial construct suggests a shifting of the balance of risks and benefits as between retail ratepayers and Con Ed shareholders which is relevant to the Commission’s review of the contract.” Continuing, EDF said that “New York statutes and case law establish a strong policy in favor of disclosure and transparency regarding the filing of contracts, including those involving affiliates” and that in such circumstances a company like Con Ed should “provide advance notice to the Commission and obtain Commission approval to initiate negotiations as among affiliates. . .”