Pipeline Company's Utility Status Challenged
By Rick Hiduk
The controversial topic of eminent domain—the process by which a utility or other entity is authorized by law to take possession of one’s land for a supposed “common good”—turned out not to be as important to citizens opposing a move by Pentex Pipeline Company (PPC) to enhance and expand its utility status as were remarks by a Standing Stone Township resident who painted Pentex as a depreciating and poorly-managed company that was not up to the task it seeks to take on.
Diane Ward, who owns property in Standing Stone and Terry Townships spoke at the first of two hearings that was conducted at the Wyalusing Valley Volunteer Fire Department fire hall on Oct. 7 by Pennsylvania Public Utility Commission (PUC) administrative law judge Dennis Buckley. He was flanked by Allison Kastner of the PUC’s newly-formed Bureau of Investigation, James Mullens of the Pennsylvania Office of Consumer Advocates, and Pamela Polacek, who represented PPC as a member of the McNees, Wallace and Nuvick’s legal team. Approximately 40 people attended each session.
Ward’s presentation during the first session was preceded by remarks made by Sheshequin Township resident Carolyn Knapp, whose sworn testimony opposing the application by PPC to modify its existing certificate of public convenience (CPC) on the company’s assertion that it would be the only such entity offering pipeline gathering services in Wyalusing, Herrick, Terry, Tuscarora, Stevens, and Wilmot Townships, and Wyalusing Borough. Knapp countered that as many as three gas companies operating in the area already have pipeline gathering operations under construction and that Pentex would merely be duplicating an existing service and impacting more land and homeowners than necessary.
Knapp charged that Pentex’s explanation of an expansion of its services to deliver natural gas to Cargill Meat Solutions and sending any excess natural gas to the existing Tennessee Gas Pipeline was a ploy designed to ensure its access to land via eminent domain. A relatively small subsidiary of the larger Pentex Corporation based in Texas, PPC currently supplies natural gas solely to Cargill via a gas line that is just more than one mile long. Gathering lines like those being installed by Chesapeake Energy and Talisman Energy are not subject to PUC approval, but neither can those companies determine their respective routes by eminent domain.
Terry Township resident Steve Chant related that his family owns about 35 acres, 11 of which run in a narrow strip along which he has planted numerous trees over the years.
“We’ve worked hard to be good stewards of the land,” noted Chant, adding that much of his property is designated as wetlands or flood plain. He said that it disturbed him that pipelines can go through wetlands, while residents could be fined for trying to do anything similar on their own property. He questioned why the natural gas gathering lines couldn’t be laid in the same trenches rather than permitting separate companies to clear parallel swaths of land in close proximity to each other.
“Property owners in general are opposed to eminent domain,” said Terry Township resident Trudy Gerlach, who helped to coordinate the hearing at the fire hall, “mostly because people believe that ownership gives one the right to do with their property as they choose, except for things which are illegal or impinge on the rights of others.” She noted that Laser Northeast Gathering had initially tried to secure the same status now sought by Pentex but withdrew its application because it was able to complete its pipeline without the use of eminent domain.
Ward acknowledged that the natural gas industry is here to stay and that she understands that, once the gas has been tapped, it must be moved to market. She asserted several times that she was not objecting to the series of gathering lines and compressor stations that would be needed to complete the job. But, as she revealed more and more of the volumes of evidence that she had uncovered to demonstrate the noncontiguous business practices of Pentex and its affiliates since the mid 1980s that included infractions, refusals, and cease and desist orders from agencies in several states, Ward maintained that Pentex Pipeline Company was an entity that she could not trust to transport such a volatile commodity by any means.
Though Buckley gave Polacek the opportunity to do so many times, the attorney did not question or refute any of Ward’s testimony and appeared to be growing weary of the pile of evidence against her client by the time that Ward was finished. But this public hearing was not Polacek’s first encounter with Ward. Soon after PPC filed the application to expand its authority under the existing CPC status in March, Ward, as well as local residents Gerlach and Joe Shervinsky, filed appeals with the PUC that were based on various facts and opinions. In reference to a 2001 order by the PUC for PPC to cease operations due to noncompliance of taxation, Polacek and fellow McNees, Wallace, and Nuvick counselor Carl Zwick responded to Ward’s appeal to the PUC that the nonpayment in question was due to Pentex not registering a change of address with the PUC and therefore not receiving the bill. The tax was subsequently paid and the company’s status was restored.
“This limited incident nine years ago does not demonstrate the absence of technical, managerial, or operational fitness,” Polacek and Zwick stated in their rebuttal. Ward countered that the incident was by no means isolated and that the company has a history of not filing required paperwork in a timely manner and also misrepresenting its income and employment status. She formally requested that the board audit Pentex on the latter two matters.
Though the event was set up to allow both proponents and detractors of Pentex’s intentions in the area to express their opinions, nobody spoke up in favor of eminent domain as a solution to moving locally extracted natural gas to market. Only Cargill’s purchasing manager Greg White made any positive comments on behalf of Pentex, stating that the company has sufficiently supplied Cargill with natural gas without incident and has performed upgrades and regular maintenance to its pipeline to the plant.
Most of the speakers and Buckley acknowledged Rep. Tina Pickett, who attended both sessions, for bringing the PUC hearing to Wyalusing. She stated afterward that two hearing times were coordinated to provide an opportunity for people who work to attend one session or the other. Pickett was impressed with the attendance and the preparation of those who spoke at the meeting.
“Well-thought-out and researched testimony was given by local citizens, and I believe that Judge Buckley will consider these concerns when making his decision,” Picket remarked. “This is an important aspect of the industry development in our region, and I will await the judge’s decision with great interest.”
Buckley indicated that he would compile all of the recorded testimony and evidence, as well as the written briefs by the three professionals representing the public and Pentex, which is due to him by Dec. 28. He indicated that he hopes to render a decision on the matter at a public meeting in the spring of 2012. Buckley further explained that a five-member panel will have the responsibility of accepting his decision in full, requesting changes, or rejecting it in its entirety.
For a virtual play-by-play of the application and appeals process, readers may log on to http://www.puc.state.pa.us/general/ConsolidatedCaseView.aspx?Docket=A-20....