Austin, Texas - Today, the Railroad Commission of Texas (RRC) adopted new rules for 16 Texas Administrative Code §3.65, relating to Critical Designation of Natural Gas Infrastructure, and amendments to §3.107, relating to Penalty Guidelines for Oil and Gas Violations. The following statement can be attributed to TIPRO’s President Ed Longanecker:

“The RRC has worked diligently with lawmakers and other stakeholders to implement various provisions outlined in Senate Bill 3 in response to what transpired during Winter Storm Uri. Among the revisions adopted to the rule today, facilities designated by the Texas Electricity Supply Chain Security and Mapping Committee and other highly critical facilities (underground gas storage, pipelines that directly serve a power generation plant or city gate, etc.), given their contribution to the supply of natural gas, are not eligible to apply for an exception to critical designation.

The revised rule also clarifies that an exception is not automatically granted upon filing the application form and paying a fee. The option to make the bare assertion that a facility is not prepared to operate during a weather emergency is not available. An applicant must provide objective evidence demonstrating a reasonable basis and justification to support an application for an exception. Applicants have the burden to prove an exception is warranted. The revised rule further clarifies that staff are to review the evidence and may deny an application, if warranted.

A tiered approach to prioritizing critical facilities for load shed purposes has been established through the development of a guidance document rather than placed in the formal proposed rule. The guidance document will complement rules from the RRC and Public Utility Commission (PUC). While the RRC does not have jurisdiction over electric entities or load shed planning by electric utilities, the agency will make suggestions for load shed priorities for natural gas facilities to assist PUC in their efforts to implement Texas Utilities Code §38.074(b)(2).

The commission’s rule also includes an option for a facility that would not be designated as critical to apply for such designation. Facilities that are not designated as critical in subsection (b) of the rule but that otherwise support a facility that is designated in subsection (b) may apply. Similarly, facilities that are not designated as critical in subsection (b) of the rule that later become part of the map developed by the Texas Electricity Supply Chain Security and Mapping Committee shall be required to apply for critical designation. The applicants must provide supporting evidence, which will be reviewed by agency staff.

Further, revised definitions of “critical customer” and “critical gas supplier” will serve to limit the universe of parties who will be designated as critical by excluding extremely low volume producing leases/wells that aggregated together do not make significant contributions to the supply of natural gas that may be used as fuel for electric power generation or that would make its way to city gates or local distribution company human needs customers.

This rulemaking and other substantive policy measures passed during the 87th Legislative Session will ensure that the state is better prepared for future extreme weather conditions, something the Texas oil and natural gas industry remains fully committed to. We applaud the work of the RRC and the Texas legislature on this important issue.”

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