FERC COMMISSION MEETING SEPTEMBER 20, 2018. >> THE PURPOSE OF THE FEDERAL ENERGY REGULATORY COMMISSION OPEN MEETING IS FOR THE COMMISSION TO CONSIDER THE MATTERS THAY HAVE BEEN DULY POSTED IN ACCORDANCE WITH THE GOVERNMENT IN THE SUNSHINE ACT. MEMBERS OF THE PUBLIC ARE INVITED TO OBSERVE WHICH INCLUDES ATTENDING, LISTENING, AND TAKING NOTES, BUT DOES NOT INCLUDE PARTICIPATING IN THE MEETING OR ADDRESSING THE COMMISSION. ACTIONS THAT PURPOSELY INTERFERE OR ATTEMPT TO INTERFERE WITH THE COMMENCEMENT OR CONDUCTING OF THE MEETING OR INHIBIT AUDIENCE'S ABILITY TO OBSERVE OR LISTEN TO THE MEETING INCLUDING ATTEMPTS BY AUDIENCE MEMBERS TO ADDRESS THE COMMISSION WHILE THE MEETING IS IN PROGRESS ARE NOT PERMITTED. PERSONS ENGAGING IN SUCH BEHAVIOR WILL BE ASKED TO LEAVE THE BUILDING. ANYONE WHO REFUSES TO LEAVE WILL BE ESCORTED. DOCUMENTS PRESENTED TO CHAIRMAN, COMMISSION OR STAFF DURING THE MEETING WILL NOT BECOME PART OF THE OFFICIAL RECORD OF ANY COMMISSION PROCEEDING. NOR WILL THEY REQUIRE FURTHER ACTION BY THE COMMISSION. IF YOU WISH TO COMMENT ON AN ONGOING PROCEEDING BEFORE THE COMMISSION, PLEASE VISIT OUR WEBSITE FOR MORE INFORMATION. THANK YOU FOR YOUR COOPERATION.

>> MADAM SECRETARY, WE'RE READY TO BEGIN.

>> THIS IS THE TIME AND PLACE THAT HAS BEEN NOTICED FOR THE OPEN MEETING OF THE FEDERAL ENERGY REGULATORY COMMISSION TO CONSIDER THE MATTERS THAT HAVE BEEN DULY POSTED IN ACCORDANCE WITH THE GOVERNMENT IN THE SUNSHINE ACT. PLEASE JOIN US IN THE PLEDGE OF ALLEGIANCE.

>> I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA AND TO THE REPUBLIC FOR WHICH IT STANDS, ONE NATION, UNDER GOD, INDIVISIBLE, WITH LIBERTY AND JUSTICE FOR ALL.

>> COMMISSIONERS, SINCE THE JULY OPEN MEETING THE COMMISSION HAS ISSUED 151 NOTATIONAL ORDERS. THANK YOU, COMMISSIONER CHATTERJEE.

>> GOOD MORNING. THE CHAIRMAN HAS ASKED THAT I READ A BRIEF STATEMENT ON HIS BEHALF. I APOLOGIZE FOR NOT BEING AT TODAY'S COMMISSION MEETING AS I HAD FULLY INTENDED TO BE PRESENT. HOWEVER, MY ONGOING RECOVERY PREVENTS ME FROM BEING HERE IN PERSON TODAY. I HAVE DIRECTED SECRETARY BOST TO RECORD MY VOTE ON ALL MATTERS BEING CONSIDERED AT THIS OPEN MEETING. MY HEALTH SITUATION IMPACTED MY MOBILITY, IT HAS NOT IMPACTED MY ABILITY TO GET THE COMMISSION WORK DONE, AND I'M PROUD TO REPORT THAT THE COMMISSION CONTINUES TO MOVE FULL STEAM AHEAD ON ALL FRONTS. SINCE THE JULY OPEN MEETING, THE COMMISSION HAS ISSUED 151 ORDERS, WE'VE ENTERED INTO AN IMPORTANT MOU WITH PHMSA, OFFICE OF ENERGY PRODUCTS ISSUED ACCELERATED SCHEDULE FOR CONSIDERATION BY THE COMMISSION AND ITS STAFF OF 12 LNG PROJECTS, I'VE APPOINTED A NEW FERC ALJ. I'M GRATEFUL FOR THE OUTSTANDING WORK BY COLLEAGUES, STAFF AND PROFESSIONAL STAFF AND FOR EVERYONE'S CONCERN REGARDING MY ONGOING RECOVERY. IN MY ABSENCE, I'VE ASKED COMMISSIONER CHATTERJEE TO TAKE THE GAVEL FOR TODAY'S MEETING. PLEASE DIRECT ANY PRESS QUESTIONS TO OUR OFFICE OF EXTERNAL AFFAIRS AS WE WILL NOT BE HAVING A PRESS CONFERENCE TODAY. I KNOW I SPEAK FOR MY FELLOW COMMISSIONERS WHEN I SAY THAT WE  I SPEAK FOR MY FELLOW COMMISSIONERS WHEN I SAY WE WISH THE CHAIRMAN THE BEST ON HIS CONTINUED RECOVERY. NEXT I WANT TO TAKE A MOMENT TO EXTEND OUR HEARTFELT SUPPORT TO THOSE AFFECTED BY HURRICANE FLORENCE. FERC STAFF INCLUDING KEY PERSONNEL WORKED WITH PARTNERS AT NERC AND FEDERAL AND STATE MANAGEMENT AGENCIES TO ENSURE CONTINUED SAFETY OF FERC FACILITIES AND MONITOR DISRUPTIONS OF POWER TO CRITICAL SERVICES IN ALL AFFECTED AREAS. FERC WILL CONTINUE TO DO WHAT IT CAN TO ASSIST AS THE REGION RECOVERS FROM THIS DEVASTATING STORM. NOW I'M PLEASED TO ANNOUNCE THE CHAIRMAN HAS TAPPED JETTE GEBHART AS DEPUTY DIRECTOR OF OEMR, JETTE SERVED WITH DISTINCTION IN THE ROLE ON AN ACTING CAPACITY FOR AS LONG AS I'VE BEEN ON THE COMMISSION. TODAY'S ANNOUNCEMENT IS WELL DESERVED. JETTE IS A GOOD EXAMPLE OF THE WORLD CLASS PUBLIC SERVANTS THAT WORK HERE AT FERC AND I'M CONFIDENT THAT YOU WILL CONTINUE TO SERVE THE AGENCY WELL. MY CONGRATULATIONS. NEXT, I WOULD LIKE TO TAKE A MOMENT TO SHARE A NEW INITIATIVE LAUNCHED LAST WEEK BY OUR FRIENDS AT THE ENERGY INFORMATION ADMINISTRATION. THIS NEW INTERACTIVE WEB DASHBOARD ON THE EIA HOME PAGE SUPPLEMENT THE EIA'S WEEKLY NATURAL GAS STORAGE REPORT. I ENCOURAGE EVERYONE TO TAKE ADVANTAGE OF THIS EXCITING NEW RESOURCE. WITH THAT, I WOULD LIKE TO TOUCH ON MY DISSENT THE UTAH BOARD OF WATER RESOURCES PETITION FOR DECLARATORY ORDER. I BELIEVE THE ACT GIVES THE COMMISSION LEEWAY IN DETERMINING WHAT CONSTITUTES A HYDROELECTRIC PROJECT AND THUS WHAT IS UNDER THE COMMISSION'S JURISDICTION. THE STATE OF UTAH HAS BEEN PLANNING THE LAKE POWELL PIPELINE PROJECT SINCE 2008, UNDER THE REASONABLE ASSUMPTION THAT THE PEN STOCK SUPPLYING WATER TO HYDROELECTRIC GENERATORS IS FERC JURISDICTIONAL, BELIEVE THE FACTS SUPPORT THE POSITION. MY THOUGHTS ARE AVAILABLE IN MY DISSENT. LASTLY, CERTAINLY NOT LEAST, AT THE END OF AUGUST THE COMMISSION ANNOUNCED IT EXECUTED A MEMORANDUM OF UNDERSTANDING WITH FRIENDS AT THE PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION, ESTABLISHING A FRAMEWORK FOR IMPROVED COOPERATION BETWEEN PHMSA AND FERC IN THE PROCEEDING PROCESSING OF LNG EXPORT TERMINAL APPLICATIONS. I'M VERY PLEASED THAT ADMINISTRATOR ELLIOTT FROM PHMSA JOINED US TODAY. HE AND FERC GENERAL COUNSEL JAMES DANLY WILL PROVIDE BRIEF REMARKS ON THE MOU LATER IN TODAY'S AGENDA. ADMINISTRATOR ELLIOTT, MY SINCERE THANKS FOR YOU JOINING US AND I LOOK FORWARD TO HEARING FROM YOU TODAY. WITH THAT, I'D LIKE TO TURN THE MICROPHONE OVER TO MY FELLOW COMMISSIONERS FOR ANY OPENING STATEMENTS OR ANNOUNCEMENTS. COMMISSIONER LAFLEUR.

>> THANK YOU, COMMISSIONER CHATTERJEE. I'M VERY SORRY THAT OUR FEARLESS LEADER CHAIRMAN MCINTYRE COULDN'T BE HERE IN PERSON TODAY, I ALSO HOPE HE FEELS MUCH BETTER SOON. I WANT TO ECHO NEIL'S COMMENTS ON HURRICANE FLORENCE, TO RESTORE POWER TO COMMUNITIES, I WANT FERC STAFF FOR THEIR EFFORTS KEEPING US INFORMED. I ALSO WANT TO CONGRATULATE JETTE FOR BEING NAMED DEPUTY DIRECTOR OF OEMR, SHE SERVED IN THAT ROLE IN AN ACTING CAPACITY FOR SOME TIME AND IN PREVIOUS POSITIONS DEMONSTRATED SHE'S SUPERBLY QUALIFIED. FINALLY A REPORT ON A TRIP I MADE EARLIER THIS MONTH, WHICH WAS A LONG OVERDUE TRIP. I'VE HAD PAPERS GOING BACK TO 2012 TO ALASKA. WHICH I MADE WITH MY ADVISER. I TRY NOT TO MAKE OPEN MEETING COMMENTS A TRAVELOG OR THEY WOULD LAST A LONG TIME, BUT THIS ONE WAS REALLY SPECIAL SO I WANTED TO SHARE A FEW THOUGHTS. THE COMMISSION DOESN'T REGULATE ELECTRIC TRANSMISSION IN ALASKA, YOU DON'T GET A LOT OF INTERSTATE TRANSMISSION, WE REGULATE 36 HYDROELECTRIC FACILITIES, AND THERE'S OTHERS PENDING, LICENSING PETITIONS, AS WELL AS THE TRANSALASKAN PIPELINE AND PENDING LNG PROJECT WITH A VERY LARGE PIPELINE TO SERVICE. MY VISIT WAS SCHEDULED IN CONNECTION WITH THE NATIONAL HYDRO ASSOCIATION REGIONAL METING, CAT AND I VISITED 3 OF THE 36 FACILITIES. THE MOST STRIKING WAS BRADLEY LAKE PROJECT, THE LARGEST HYDRO FACILITY IN ALASKA, LIKE MANY OF THEM ONLY ACCESSIBLE BY AIR OR WATER, NOT ROADS. IT WAS REALLY STRIKING TO SEE SUCH AN ENORMOUS AND IMPRESSIVE FACILITY REALLY IN THE MIDDLE OF NOWHERE USING  IT'S LIKE COMING ACROSS A PYRAMID OR SOMETHING. HOW DID THIS GET BUILT? HOW DID THEY MAKE THIS HAPPEN HERE? AND WE WERE ABLE TO SEE A LITTLE BIT OF HOW THEY MADE IT HAPPEN BECAUSE WE VISITED THE CONSTRUCTION OF TWO ONGOING  TWO GLACIAL DIVERSIONS THAT THE COMMISSION APPROVED A FEW YEARS AGO THAT WILL ADD TO THE CAPACITY OF THE BRADLEY LAKE PROJECT, FIRST THEY HAVE TO SET UP A CAMP FOR THE WORKERS WHO WILL BE WORKING ON IT, THEN BUILD ROADS TO TRANSPORT THE PIPE THAT THEY WILL USE FOR THE DIVERSION BEFORE THEY CAN START ACTUALLY DOING THE WORK. AND SO IT'S REALLY QUITE AN INTERESTING INDUSTRIAL PROJECT. WE WERE ACCOMPANIED BY GLENN KESTER OF PORTLAND WHO DID DAM SAFETY INFECTION WHILE THERE, A REMINDER OF THE HUGE TERRITORIES OR REGIONAL HYDRO STAFF COVER, AND WE ALSO SAW TWO SMALLER BUT INTERESTING PROJECTS IN KETCHIKAN, ONE OF WHICH HAD A FISH HATCHERY AND WORKS TO PROVIDE WATER FLOWS. WE MET WITH COLLEAGUES AT REGULATORY COMMISSION OF ALASKA AND ENERGY AUTHORITY, AND HAD A FEEDBACK SESSION WITH HYDRO OWNERS AND OPERATORS FROM AROUND THE STATE AND OF COURSE ATTENDED THE MEETING I WAS ACTUALLY THERE FOR. JUST A COUPLE IMPRESSIONS. SINCE I'VE BEEN AT FERC I THINK I CAN CONFIDENTLY SAY THAT EVERY STATE I HAVE MET WITH, EVERY REGION AND MOST COMPANIES HAVE ASSERTED THEIR EXTREME UNIQUENESS AND HOW THEIR PROJECT, THEIR ISSUE, THEIR CIRCUMSTANCE IS DIFFERENT THAN ANYPLACE ELSE. ALMOST ALWAYS THERE'S AN ELEMENT OF TRUTH TO THAT BUT ALASKA WITH POSSIBLE EXCEPTION OF HAWAII IS THE MOST UNIQUE OF THE UNIQUE. ITS GEOGRAPHY, CLIMATE, RESOURCES, INFRASTRUCTURE, ARE UNLIKE ANYTHING IN THE LOWER 48, WORDS THAT TRIPPED OFF MY TONGUE WITHIN FIVE MINUTES OF LANDING, LOWER 48 EVERY FIVE MINUTES. HUGE NATURAL RESOURCES AS WE KNOW IN THE NORTH SLOPE BUT VAST DISTANCES TO BRING THEM TO ANYWHERE WITH ALMOST NO ROAD INFRASTRUCTURE, HARSH CLIMATE BUT BEAUTIFUL WHEN WE WERE THERE, SHORT CONSTRUCTION SEASON AND LIMITED ELECTRICAL INTERCONNECTEDNESS, SO DISPATCHES THESE THINGS, MAKING THEM WORK TOGETHER IS CONSTRAINED BY THE FACT THERE'S DISPATCH CENTERS ALL OVER THE PLACE, VERY LITTLE TRANSMISSION, THEY ARE WORKING TO TRY TO PULL TOGETHER A POWER POOL. THE SECOND REALLY STRIKING THING IN ALASKA IS THAT ADAPTATION TO CLIMATE CHANGE ISN'T SOMETHING THAT'S IN THE ARTICLES OR IN THE FUTURE. IT'S A CURRENT REALITY THAT MANY OF THE PEOPLE WE MET WITH ARE DEALING WITH NOW. EVERYWHERE WE WENT, WE HEARD ABOUT RECEDING GLACIERS AFFECTING HYDRO OPERATION, CHANGES IN THE WAY GEOGRAPHY WORKS SINCE THINGS WERE BUILT, CHANGES IN FISH AND ANIMAL POPULATION, SALMON NOT REACHING AS FAR AS THEY USED TO, CHANGING THE THE WAY HYDROS ARE OPERATING, CHANGES IN PERMAFROST, AFFECTING THE STANCHIONS, AND IT WAS ALSO PARTICULARLY FASCINATING TO MEET WITH ALASKA ENERGY AUTHORITY, IN CHARGE OF WORKING WITH THE INDIGENOUS COMMUNITIES AND IN SOME CASES RELOCATING THEM. SO A REMINDER THERE'S AN ARCTIC STATE IN THE UNITED STATES, AND CLIMATE CHANGE IS A CURRENT REALITY THERE HAVING A BIG IMPACT ON THE POPULATION. FINALLY ON A LIGHTER NOTE WE SAW FIVE MOOSE AND TWO LIVE BEARS UP CLOSE IN THE WILD IN CONNECTION WITH OUR TOURS, WHICH WOULD HAVE MADE IT WORTHWHILE EVEN IF I DIDN'T DO ANY OF THOSE OTHER THINGS. AND WITH THAT I'LL CEDE THE FLOOR.

>> I WANT TO WISH CHAIRMAN MCINTYRE A SPEEDY RECOVER. I WANT TO START BY WELCOMING BACK A LEGAL ADVISER, WHO HAS BEEN ON MATERNITY LEAVE WITH HIS DAUGHTER LYLA, CUTEST BABY EVER. IT'S TRUE IN THIS CASE. I THANK GRETCHEN KERSHAW WHO CAME HIGHLY RECOMMENDED AND DIDN'T DISAPPOINT. SHE WAS A PLEASURE TO WORK WITH, INCREDIBLY BRIGHT, VERY HARD WORKING AND DID A GREAT JOB IN OUR OFFICE, I'M SURE JAMES AND THE TEAM ARE GLAD SHE'S BACK ON THE JOB THERE. WITH REGARD TO HURRICANE FLORENCE, I WANT TO ECHO, AND HIGHLIGHT THE IMPORTANCE OF MUTUAL ASSISTANCE, ESSENTIAL PART OF THE INDUSTRY, SERVICE RESTORATION PROCESS, CONTINUOUSLY PLANNING. BULK ELECTRIC SYSTEM LARGELY UNAFFECTED BY HURRICANE FLORENCE. WE NEED TO KEEP ON REMEMBERING THAT. EVENTS SUCH AS HURRICANE FLORENCE UNDERSCORE A CUSTOMER FOCUSED FRAMEWORK. I WANTED TO COMMENT ON CAPACITY SCARCITY CONDITIONS IN THE NEW ENGLAND ISO ON LABOR DAY. THE WEATHER WAS HOTTER THAN FORECAST, AS A RESULT PEAK LOAD WAS MORE THAN 2000 MEGAWATTS HIGHER THAN FORECAST. AND CAUSING PRICES TO RISE AS HIGH AS $2500 A MEGAWATT HOUR. THESE CONDITIONS TRIGGERED ISO NEW ENGLAND'S FIRST PAY FOR PERFORMANCE EVENT WHICH PENALIZED INFLEXIBLE RESOURCES, REWARDING THOSE THAT COULD QUICKLY RESPOND TO THE GRID'S NEEDS, THE FIRST EVENT OF ITS KIND. I POINT OUT THIS INCIDENT BECAUSE IT HIGHLIGHTS THE NEED FOR FLEXIBILITY. BY THE TIME IT WAS WARRANTY THE WEATHER FORECAST WAS WRONG, IT WAS TOO LATE TO RAMP UP OPERATIONS ON CERTAIN SLOWSTARTING GENERATING RESOURCES. THE COMMISSION SHOULD BE FOCUSING ON DEVELOPING MARKET RULES LIKE THESE WHICH COMPENSATION FOR SERVICES PROVIDED, ESSENTIAL TO INVENT ADVISING RESOURCE MIX FOR THE FUTURE. I WANT TO CONGRATULATE JETTE, AN HONOR BEING PERMANENT DEPUTY OF OER, MY STAFF AND I WORKED CLOSELY WITH JETTE ON A NUMBER OF ISSUES, EXTREMELY HELPFUL, I LOOK FORWARD TO WORKING WITH HER IN THE FUTURE.

>> MADAM SECRETARY WE'RE READY TO GO TO CONSENT AGENDA.

>> THANK YOU, COMMISSIONER CHATTERJEE. SINCE THE ISSUANCE ON SEPTEMBER 13, 2018, NO ITEMS HAVE BEEN STRUCK FROM THE AGENDA. YOUR CONSENT AS FOLLOWS. ELECTRIC ITEMS E1, E2, E3, E4, E5, E6, E7, E8, E9, E10 AND E11. GAS ITEMS G3. HYDRO ITEMS H1, AND H2. CERTIFICATE ITEMS C1, AND C2. WITNESSED AND SIGNED STATEMENTS DULY SUBMITTED BY AND ACCOUNTED FOR BY THE SECRETARY, CHAIRMAN MCINTYRE VOTING AYE ON ALL EXCEPT FOR THOSE ITEMS IN WHICH HE HAS RECUSED. WITH REGARD TO THESE RECUSED ITEMS, AS REQUIRED BY LAW, CHAIRMAN MCINTYRE IS NOT PARTICIPATING IN ITEMS E3, E4, E5, E6 AND E7. AS TO H1, COMMISSIONER CHATTERJEE IS DISSENTING WITH SEPARATE STATEMENT. WE'RE NOW READY TO TAKE A VOTE ON THIS MORNING'S CONSENT AGENDA. VOTE BEGINS WITH COMMISSIONER GLICK.

>> AYE.

>> COMMISSIONER CHATTERJEE.

>> NOTING MY DISSENT IN H1, AYE.

>> COMMISSIONER LAFLEUR?

>> I VOTE AYE.

>> AS STATED EARLIER CHAIRMAN MCINTYRE VOTES AYE. NOTING HIS RECUSALS, IN ITEMS E3, E4, E5, E6 AND E7.

>> THANK YOU, MADAM SECRETARY. IF WE COULD PLEASE MOVE TO THE ITEMS ON THE DISCUSSION AGENDA.

>> FIRST ITEM FOR PRESENTATION AND ONLY ITEM FOR PRESENTATION THIS MORNING IS A3, CONCERNING A MEMORANDUM OF UNDERSTANDING BETWEEN THE DEPARTMENT OF TRANSPORTATION AND THE FEDERAL ENERGY REGULATORY COMMISSION, REGARDING LIQUIFIED NATURAL GAS TRANSPORTATION FACILITIES. THERE WILL BE A PRESENTATION, BY JAMES DANLY, GENERAL COUNSEL OF THE FEDERAL ENERGY REGULATORY COMMISSION, AND HOWARD SKIP ELLIOTT, ADMINISTRATOR OF THE PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION.

>> GOOD MORNING, COMMISSIONERS. I'D LIKE TO START BY SAYING IT'S MY HONOR TO APPEAR HERE WITH MR. ELLIOTT, ADMINISTRATOR OF THE DEPARTMENT OF TRANSPORTATION'S PIPELINE AND HAZARDOUS MATERIALS SAFETY ADMINISTRATION, PHMSA. I WANT TO THANK HIM AT THE OUTSET FOR HE AND SECRETARY ELAINE CHAO DID THIS AFTER A LOT OF HARD WORK IN BOTH AGENCIES. THIS MOU DESCRIBES GOING FORWARD THE COORDINATED EFFORTS TO EXPEDITE REVIEW OF ALL OF THE APPLICATIONS FOR LNG PIPELINES PENDING AND IN THE FUTURE. THE CHAIRMAN REMARKED BEFORE, THE STORY OF LNG DEVELOPMENT IN AMERICA IS AN AMERICAN SUCCESS STORY. LAST YEAR THE UNITED STATES FOR THE FIRST TIME BECAME A NET EXPORTER OF LNG AND EIA ESTIMATED BY 2040 THE UNITED STATES IS GOING TO BE PRODUCING SOMEWHERE JUST SHY OF 40 TRILLION CUBIC FEET A YEAR. AT THE SAME TIME, WE'RE GOING TO HAVE A DOMESTIC CONSUMPTION OF 30 MILLION CUBIC FEET. THAT OF COURSE REPRESENTS AN EXTRAORDINARY OPPORTUNITY FOR EXPORTS, ALLOWING AMERICA TO IMPROVE BALANCE OF TRADE, STRENGTHEN TRADING PARTNERS, ALLOWED TRADING PARTNERS TO DISPLACE THEIR SOURCE WAS AMERICAN LNG, PROVIDE JOBS IN THE LNG INDUSTRY AND SUPPORTING INDUSTRIES. IN ORDER TO REALIZE ADVANTAGES MORE LNG INFRASTRUCTURE HAS TO BE BUILT. THIS MOU IS GOING TO ALLOW US TO ACCELERATE THE REVIEW AND PRESENTATION OF THE COMMISSION FOR THE DECISION OF ALL THE PENDING APPLICATIONS, THE DOZEN OR SO CURRENTLY PENDING BEFORE US, THIS COULD MEAN BY THE YEAR 2020 POTENTIALLY THE COMMISSION COULD MAKE DECISIONS ON A COMBINED SET OF LNG INFRASTRUCTURE PROJECTS, A TRILLION CUBIC FEET PER YEAR. A BRIEF WORD, TWO STATUTES ARE MORE THAN FOR LNG TERMINALS, THE TWO ACTS. FERC IS RESPONSIBLE FOR AUTHORIZING THE LNG FACILITIES IN THE FIRST INSTANCE, NO LNG FACILITY CAN OPERATE IF IT CANNOT MEET THE REQUIREMENTS THAT ARE WITHIN PART 193 OF THE DOT SAFETY STANDARDS. IN THE PAST, WHAT WE'VE DONE AT FERC WAS OUR STAFF MADE A PRELIMINARY DETERMINATION AS TO WHETHER OR NOT THE FACILITY IF BUILT AS CONTEMPLATED WITH BE ABLE TO MEET THE STANDARDS, THAT PROCESS WENT WELL FOR A WHILE BUT AS THE NUMBER OF LNG APPLICATIONS INCREASED OVER TIME AND WENT FROM RELATIVELY SIMPLE IMPORT TERMINALS TO MUCH MORE COMPLICATED EXPORT TERMINALS, WE FOUND THIS PROCESS WAS BECOMING A LITTLE BIT MORE BURDENSOME THAN IT HAD BEEN. AS THIS PROCESS BECAME MORE DIFFICULT WITH THE INCREASING COMPLEXITY WE HAD TO QUERY PHMSA BECAUSE WHAT WE WERE DOING HERE AT FERC WAS MAKING PRELIMINARY DETERMINATIONS, THIS REQUIRED AN ITERATIVE PROCESS WITH MULTIPLE QUESTIONS AND BACK AND FORTH WITH PHMSA. THE MOU WILL END THAT ITERATIVE PROCESS AND NOW BETWEEN THE TWO AGENCIES THE EXPERTS ON THIS SUBJECT PHMSA ARE GOING TO BE THE ONES WHO MAKE THAT PRELIMINARY DETERMINATION. THEY WILL MAKE THAT DETERMINATION, CERTIFY FOR THE COMMISSION SO THE COMMISSIONERS WHEN VOTING WILL KNOW THIS WILL MEET DOT SAFETY STANDARDS. THIS WILL GREATLY SHORTEN REVIEW PROCESS TIME AND WILL PUT THE  GIVE GREATER CERTAINTY BECAUSE THE EXPERTS WILL MAKE THE DETERMINATION. I THINK THIS IS ONE OF THESE GREAT INSTANCES OF GOOD GOVERNMENT, WHERE YOU MUCH LIKE THE ONE FEDERAL DECISION MOU SIGNED GOVERNMENTWIDE WE'RE WORKING BETWEEN AGENCIES IN ORDER TO WITHOUT SACRIFICING ANY OF THE REQUIREMENTS OF THE REGS, NONE OF THE SAFETY STANDARDS OR SECURITY STANDARDS ARE BEING SACRIFICED BUT RATHER THROUGH BETTER COORDINATION BETWEEN AGENCIES ARE ABLE TO EXPEDITE AND DO EFFICIENTLY THE WORK CONGRESS CHARGED US TO DO. I EXPRESS MY SINCERE THANKS WE GOT THE MOU SIGNED AND TURN IT OVER TO ADMINISTRATOR ELLIOTT.

>> GOOD MORNING. IT'S A GREAT HONOR TO BE HERE TODAY TO TALK TO YOU ABOUT THE ACCOMPLISHMENTS THAT WE'VE ACHIEVED. PLEASE EXTEND MY WELL WISHES TO CHAIRMAN MCINTYRE FOR A QUICK RECOVERY. AS YOU KNOW, ON AUGUST 31, OF 2018, PHMSA AND FERC ENTERED INTO A MEMORANDUM OF UNDERSTANDING TO RENEW AND UPDATE AGENCIES, COOPERATION RELATING TO THE REVIEW AND APPLICATION OF LIQUID NATURAL GAS FACILITIES. WORKING TOGETHER PHMSA AND FERC WILL BOLSTER AMERICA'S STATUS AS NET EXPORTER OF LIQUIFIED NATURAL GAS WHICH HOLDS EXCITING POTENTIAL FOR OUR NATION AND THE WORLD. THE UNITED STATES ALREADY EXPORTS LNG TO OVER 25 COUNTRIES INTERNATIONALLY, AND PHMSA'S COMMITTED TO ENSURING THIS EFFORT CONTINUES WITH SAFETY NOT JUST IN MIND BUT PARAMOUNT. THIS MOU COMMITS OUR AGENCIES TO COLLABORATING TO REVIEW LNG FACILITY APPLICATIONS EFFICIENTLY AND SAFELY. WE WILL SHARE INFORMATION AND EXPERTISE TO BETTER SERVE THE NATION AND ITS CITIZENS, THE PURPOSE THAT EVERY FEDERAL AGENCY SHOULD ALWAYS REMEMBER. PHMSA IS PLEASED TO TAKE THE LEAD FOR THE DEPARTMENT OF TRANSPORTATION IN THIS AREA, AND TO EXECUTE DIVISION THE VISION OF SECRETARY CHAO FOR ECONOMIC GROWTH. AS THIS DEVELOPMENT OCCURS PHMSA WILL ENSURE ITS MISSION IS MET, TO PROTECT PEOPLE AND THE ENVIRONMENT BY ADVANCING THE SAFE TRANSPORTATION OF ENERGY PRODUCTS AND OTHER HAZARDOUS MATERIALS THAT ARE ESSENTIAL TO OUR DAILY LIVES. THE MOU CONFIRMS PHMSA'S ROLE AS AGENCY WITH AUTHORITY TO MAKE THE DETERMINATION REGARDING AN APPLICATION'S COMPLIANCE WITH SAFETY STANDARD RELATING TO LOCATING OF LNG FACILITIES. PHMSA WILL ANALYZE UNDER 49 CFR PART 193 SUBPART B WHETHER THE APPLICATION COMPLIES WITH THERMAL RADIATION AND FLAMMABLE VAPOR GAS DISPERSION REQUIREMENTS, AS WELL AS FACILITY PROPERLY DESIGNED TO WITHSTAND SUSTAINED WIND FORCES. WE'LL ISSUE A LETTER OF DETERMINATION TO FERC 30 DAYS BEFORE FERC ISSUES ITS FINAL ENVIRONMENTAL IMPACT STATEMENT. LNG HAS TREMENDOUS POTENTIAL BECAUSE IT SUPPLIES THREE THINGS WE WANT FROM SOURCES OF ENERGY. WE WANT THEM TO BE CLEANER BECAUSE WE CARE ABOUT THE ENVIRONMENT. WE WANT THEM TO BE CHEAPER BECAUSE WE CARE ABOUT OUR ECONOMY. AND WE WANT THEM TO BE SAFER BECAUSE SAFETY IS AN END IN ITSELF AND IT'S THE VERY REASON THAT PHMSA EXISTS. IN RECENT YEARS TECHNOLOGICAL INNOVATION DELIVERED A SURGE IN NATURAL GAS PRODUCTION, PRACTICALLY EVERY FORM OF ECONOMIC HAS FIXED ENERGY REQUIREMENTS, BUT ALSO HOLDS POTENTIAL AS WE EXPORT MORE LNG TO REDUCE OR ELIMINATE TRADE DEFICITS AS WELL AS TO ATTRACT DIRECT FOREIGN INVESTMENTS. FOR THESE REASONS, THE PAILS OF LNG INFRASTRUCTURE DEMAND IS INCREASING. AMERICA'S NOW ARRIVED AT PLACE WHERE TRANSPORTATION INFRASTRUCTURE IS A LIMITING FACTOR ON THE ECONOMIC AND ENVIRONMENTAL POTENTIAL OF INEXPENSIVE NATURAL GAS. IT'S A MATTER OF URGENCY GOVERNMENT FACILITATE THE INFRASTRUCTURE REQUIRED. WE ARE PROUD TO ADDRESS SAFETY ELEMENTS WITH OUR PARTNERS AT THE FEDERAL ENERGY REGULATORY COMMISSION. AND WE LOOK FORWARD TO WORKING WITH FERC IN THAT ENDEAVOR. THANK YOU VERY MUCH FOR YOUR TIME TODAY

>>> THANK YOU BOTH FOR THOSE PRESENTATIONS, AND MY SINCERE GRATITUDE TO YOU BOTH, AND TO FERC STAFF, AND PHMSA STAFF. I WANT TO EXPRESS MY PARTICULAR GRATITUDE TO MY FRIEND AND MENTOR SECRETARY CHAO FOR HER AND YOUR HARD WORK MAKING THIS MOU A REALITY. AS EVERYONE KNOWS I'VE BEEN VOCAL IN CALLING FOR CREATIVE OUTSIDE THE BOX THINKING ON HOW WE CAN MAKE OUR REVIEWS OF LNG EXPORT FACILITY APPLICATIONS MORE EFFICIENT WITHOUT COMPROMISING SAFETY. SOME OF THE UNITED STATES CLOSEST ALLIES AROUND THE WORLD ARE BULLISH ON NATURAL GAS. EACH HAVE THEIR OWN MOTIVATIONS. SOME WANT TO REDUCE THEIR CARBON FOOTPRINT. OTHERS TO MAKE DOMESTIC INDUSTRY MORE EFFICIENT. STILL OTHERS TO PROMOTE THEIR OWN ENERGY SECURITY. BUT THEY ARE ALL LOOKING TO THE UNITED STATES TO FULFILL THEIR DEMAND FOR NATURAL GAS BECAUSE OUR NATION IS A RESPONSIBLE ACTOR ON THE INTERNATIONAL STAGE AND RELIABLE TRADING PARTNER. IF THE UNITED STATES CAN ENSURE THAT ADEQUATE LNG EXPORT INFRASTRUCTURE IS IN PLACE IN TIME TO MEET THAT DEMAND IT COULD MEAN THOUSANDS OF ADDITIONAL JOBS ACROSS THE UNITED STATES. IF WE MISS THE WINDOW OF OPPORTUNITY, BECAUSE OF BOTTLENECKS IN FERC LNG EXPORT FACILITY APPLICATION REVIEW PROCESS, OR BECAUSE FERC LACKS THE RESOURCES TO COMPLETE ITS REVIEW PROCESS IN A TIMELY FASHION, THOSE FOREIGN TRADING PARTNERS WILL BE LOOKING ELSEWHERE FOR THEIR NATURAL GAS. THE MOU IS ONE IMPORTANT STEP IN THE COMMISSION'S ONGOING EFFORTS TO ENSURE PROCESS AND RESOURCES IN PLACE TO COMPLETE TIMELY REVIEW OF LNG EXPORT APPLICATIONS BUT OUR WORK SHOULD NOT STOP WITH THIS MOU. WE OWE IT TO ALL STAKEHOLDERS TO CONTINUE LOOKING FOR ADDITIONAL INNOVATIVE APPROACHES TO ENSURING FERC HAS THE PROCESSES AND RESOURCES TO MEET THE CHALLENGE POSED BY WHAT MANY EXPECT TO BE LONGTERM INTERNATIONAL DEMAND FOR U.S. LNG EXPORTS. I'VE MENTIONED IN MY PUBLIC STATEMENTS SEVERAL AVENUES THAT I THINK COULD BE WORTH EXPLORING HERE, INCLUDING CITING FERC REGIONAL OFFICES IN HOUSTON OR OTHER INDUSTRY CENTERS, MAKING FERC COMPENSATION COMPETITIVE WITH INDUSTRY TO IMPROVE RETENTION AND RECRUITING OF TOP TIER ENGINEERS AND ATTORNEYS, AND BOLSTERING FERC INTERNSHIP PROGRAMS TO IDENTIFY THE NEXT GENERATION OF TALENT. I LOOK FORWARD TO WORKING WITH MY FELLOW COMMISSIONERS IN CONGRESS IN EXPLORING THESE AND OTHER CREATIVE APPROACHES SO THAT WE HAVE SUSTAINABLE SOLUTIONS TO ENSURE FERC HAS RESOURCES IN PLACE TO DEMAND  TO MEET DEMAND FOR U.S. LNG EXPORTS OVER THE LONG TERM. WITH THAT, I TURN THE MICROPHONE OVER TO COMMISSIONER LAFLEUR.

>> THANK YOU. IT'S VERY NICE TO HAVE YOU HERE, MR. ELLIOTT. I WANT TO THANK FERC AND PHMSA STAFF WHO WORKED ON NEGOTIATION AND COMPLETION OF THE MEMORANDUM OF UNDERSTANDING AND WILL WORK ON NOW IMPLEMENTING IT. I WOULD BE REMISS IF I DIDN'T GIVE A SHOUT OUT TO ONE IN PARTICULAR, PHMSA CHIEF COUNSEL PAUL ROBERTI IN THE FRONT ROW, A VERY OLD FRIEND FROM THE RHODE ISLAND PUC WHERE HE WAS ALSO THE CHAIR OF THE NARUC GAS SAFETY COMMITTEE, HE'S BEEN INVOLVED IN THIS EFFORT. I APPRECIATE ALL OF YOUR COMMENTS ON THE GROWTH OF LNG EXPORT. WHEN I JOINED THE COMMISSION IN 2010, WE WERE STILL WORKING ON APPLICATIONS FOR IMPORT TERMINALS. IN FACT WHEN I WAS GETTING READY FOR MY CONFIRMATION HEARINGS THAT WAS A MAJOR AREA OF STUDY, THE IMPORT APPLICATIONS. ONCE I GOT HERE IT TURNED ON A DIME AS THE MARKET CHANGED, AND BEFORE WE KNEW IT WE HAD A LOT OF APPLICATIONS FOR EXPERT TERMINALS. I'VE BEEN PART OF THE COMMISSION AS WE APPROVED A NUMBER OF THOSE IN THE PAST, AND THE FIRST TWO ARE NOW IN OPERATION. I HAD VISITED BOTH IN MARYLAND AND LOUISIANA, AND SEEN THE ENORMOUS SCALE AND COMPLEXITY OF THOSE PROJECTS. I BELIEVE THIS MEMORANDUM OF UNDERSTANDING IS OBVIOUSLY AN IMPORTANT AGREEMENT AND I SUPPORT FURTHER PROCESS IMPROVEMENTS AND FINDING WAYS TO DO THINGS BETTER. I JUST WANT TO SOUND A LITTLE NOTE OF CAUTION, A LAWYERLY NOTE, THAT IT IS IMPORTANT AS ALWAYS THAT WE NOT PREJUDGE ANY OF THE SPECIFIC LNG APPLICATIONS THAT WILL BE COMING BEFORE US. WE SHOULD REVIEW LNG APPLICATIONS JUST LIKE WE DO OTHER ASPECTS OF OUR WORK AS EFFICIENTLY AS WE CAN BUT ALWAYS HAVE TO ENSURE WE DON'T COMPROMISE OR RESPONSIBILITIES UNDER SECTION 3 OF THE NATURAL GAS ACT AND RESPONSIBILITIES UNDER THE NATIONAL ENVIRONMENTAL POLICIES ACT, NEPA, OR SHORT CUT STAKEHOLDER PROCESSES ON THESE SIGNIFICANT PROCESS. WE HAVE A LOT OF WORK SCHEDULED AHEAD AND LOOK FORWARD TO THE WORK AND WORKING WITH MY COLLEAGUES. THANK YOU AGAIN.

>> COMMISSIONER GLICK?

>> I WANT TO THANK MR. DANLY AND ELLIOTT. I DO BELIEVE THE COMMISSION HAS THE RESPONSIBILITY TO MAKE THIS EFFICIENT, MAKING SENSE TO HAVE PHMSA RATHER THAN FERC TO MAKE SURE IT'S CONSISTENT WITH PHMSA REGULATION, SEEMS TO MAKE SENSE. AT THE SAME TIME, COMMISSIONER LAFLEUR GOT TO THIS, RESPONSIBILITY PURSUANT TO NATURAL GAS ACT TO ENSURE IT'S NOT CONTRARY TO THE PUBLIC INTEREST LNG PROJECT  BEFORE PERMITTED TO PROCEED THAT THE PUBLIC IS TAKEN INTO ACCOUNT. IN MY VIEW IT'S NOT IN THE PUBLIC HAVE IF AN LNG THREATENS PUBLIC SAFETY OR THE ENVIRONMENT, IT'S CRITICAL TO UNDERTAKE INDEPENDENT SAFETY ENGINEERS ANALYSIS FOR EVERY APPLICATION, WE'LL BE DOING SO GOING FORWARD BASIS AS WELL, I WANT TO UNDERSCORE THAT. I HAVE A COUPLE QUESTIONS IF YOU DON'T MIND, MR. DANLY, REGARDING THE SAFETY FINDING. CITIZENS THAT LIVE OR WORK NEAR A PROPOSED LNG FACILITY MUST HAVE RIGHT TO PARTICIPATE IN DECISIONMAKING PROCESS. AS I UNDERSTAND IT IF THIS IS CORRECT, UNDER THE OLD APPROACH WHEN FERC MADE INITIAL DETERMINATION THAT A PROPOSAL WAS CONSISTENT WITH PHMSA REGULATION THAT FINDING AND DETERMINATION WAS INCLUDED IN DRAFT ENVIRONMENTAL IMPACT STATEMENT SUBJECT TO PUBLIC COMMENT, IS THAT TRUE?

>> THAT IS TRUE.

>> SO IN THE NEW APPROACH PHMSA MAKING THE DETERMINATION, SUBMITTING THE LETTER TO FERC FOR FINAL DETERMINE, TO FERC, AND IS THERE ANY OPPORTUNITY FOR PUBLIC COMMENT AFTER THE FERC PROCESS, AFTER THE LETTER IS RECEIVED BY FERC?

>> SO THE FINAL DETERMINATION THAT IS MADE BY PHMSA WILL BE A CERTIFICATION IF THE FACILITY IS BUILT AS CONTEMPLATED IT WILL BE ABLE TO MEET THE REQUIREMENTS OF PHMSA'S ENFORCEMENT REGIME. WE STILL CONDUCT OUR OWN INTERNAL REVIEW AS YOU CORRECTLY NOTED A MOMENT AGO. AND ALL OF THAT SAFETY REVIEW IS IN THE ENVIRONMENTAL DOCUMENT AND THAT IS SUBJECT TO COMMENT. THE ENTIRETY OF THE DETERMINATIONS GO INTO THE NEPA DOCUMENT FOR COMMENT BY EVERYBODY.

>> DOES PHMSA PROVIDE AN OPPORTUNITY? MR. ELLIOTT OR MR. DANLY, FOR PUBLIC COMMENT?

>> ITS PROCESS IS ONE THAT IS CONTEMPLATED BY THE MOU, CERTIFY US TO THE COMMISSION, THAT THE ENGINEERING REVIEW THEY DO DEMONSTRATES SUFFICIENCY, TO MEET REQUIREMENTS DOWN THE ROAD. ALL THE STAFF HERE DID IN THE PAST WAS MAKE PRELIMINARY DETERMINATION ON THAT VERY SCORE, THAT IF THE FACILITY IS BUILT AS THE DESIGN SPECS WOULD HAVE IT, WE BELIEVE HERE AT FERC STAFF BELIEVE IT WILL BE COMPLIANT WITH PHMSA. THE ULTIMATE DETERMINATION WAS ALWAYS MADE BY PHMSA, THAT WOULD HAPPEN AFTER THE PLANT WENT ONLINE WHEN IT WENT THROUGH ITS ORDINARY COMPLIANCE AND INSPECTION PROGRAM. SO, THEIR PROCESS OF CERTIFICATION TO YOU IS BASICALLY A RECOMMENDATION THAT YOU CAN BE ASSURED AS THE COMMISSION MAKING THE PUBLIC INTEREST DETERMINATION THAT IN FACT YOU ARE NOT AUTHORIZING FACILITY THAT WOULD NEVER HAVE HOPE OF OPERATING, ONE DOESN'T NORMALLY CAST A VOTE LIKE THAT.

>> I WANT TO MAKE SURE THE PUBLIC HAS ENOUGH OPPORTUNITY TO PARTICIPATE IN THE PROCESS BECAUSE OBVIOUSLY IF YOU'RE LIVING NEAR A PROPOSED LNG FACILITY YOU HAVE CONCERN, AND PEOPLE NEED TO BE ASSURED THERE'S GOING TO BE A SAFE  SAFETY FROM A PUBLIC SAFETY PERSPECTIVE, ALSO FROM THE ENVIRONMENTAL PERSPECTIVE JUST IN CASE SOMETHING HAPPENS, I WANT TO MAKE SURE WE HAVE A GOOD PUBLIC PARTICIPATION PROCESS.

>> YES.

>> THANK YOU.

>> THANK YOU BOTH FOR YOUR PRESENTATIONS AND DISCUSSION.

>> THANK YOU.

>> WITH THAT, I DO NOT HAVE ANY ADDITIONAL OR CLOSING REMARKS. TURN TO MY COLLEAGUE.

>> NOR DO I. THANK YOU.

>> I WANT TO WELCOME YOU TO THE DISSENT CLUB. [LAUGHTER] I WANT TO POINT OUT DISSENTING CAN BE A GOOD THING, ALTHOUGH NOT IN THIS CASE. [LAUGHTER]

>> THANK YOU. WITH THAT, THIS MEETING IS ADJOURNED. [END OF PROGRAM]