On November 16, 2023, FERC granted Virginia Electric and Power Company d/b/a Dominion Energy Virginia’s (“Dominion”) petition requesting the Commission declare that Dominion’s planned liquefied natural gas (“LNG”) production, storage, and regasification facility (“Back-up Fuel Project” or “Project”) in Greensville County, Virginia would be exempt from the Commission’s jurisdiction under section 7 of the Natural Gas Act (“NGA”). In so doing, FERC determined the Project satisfied the “Hinshaw Exemption” under NGA section 1(c).

The Back-up Fuel Project includes a 25-million-gallon LNG storage tank, 15 million cubic feet per day (MMcf/d) of liquefaction capacity, 500 MMcf/d of regasification capacity, pretreatment facilities, and associated station yard piping. According to Dominion, the Project will provide on-site storage for two of Dominion’s natural gas-fired, combined-cycle generating facilities: the Greensville County Power Station and the Brunswick County Power Station. Transcontinental Gas Pipe Line Company, LLC (“Transco”) delivers natural gas to both power stations through its interstate pipeline system. Gas for the Back-up Fuel Project would be delivered to the power stations through Transco’s existing pipeline system.

In its decision, FERC explained that NGA section 7 requires a natural gas company to obtain a certificate of public convenience and necessity from FERC before undertaking jurisdictional transportation, storage, or wholesale sales of natural gas or constructing or operating jurisdictional facilities. First, Dominion argued that the Project qualifies as a “non-jurisdictional plant line.” To satisfy this test, the facility must: (1) be located entirely within one state; (2) be constructed for the purpose of receiving supplies of natural gas solely for use by a plant owned by the same entity; and (3) not be used by the owner to transport natural gas for, or sell natural gas to, any third party. Dominion explained that once the gas leaves Transco’s system and is delivered to the Project, it will not be sold to any other parties or be used for any purpose beyond storage and fuel for its two power stations. In the alternative, Dominion argued that the Project qualifies for a Hinshaw Exemption, which requires that (1) the natural gas is received by another entity within or at the boundary of the state, (2) all the natural gas received is ultimately consumed within such state, and (3) the rates and services of such facility be subject to regulation by a State Commission.

FERC rejected Dominion’s claim regarding the Project’s status as a non-jurisdictional plant line, because the Project will not be “owned and controlled by an entity separate from the interstate pipeline and must not be integrated into the interstate pipeline system.”

FERC, however, agreed that the Back-Up Fuel Project falls within the Hinshaw Exemption, noting that (1) the Project will be constructed entirely within the state of Virginia and would receive natural gas from Transco’s system within Virginia, (2) the gas received will be liquified and stored at the Back-up Fuel Project to be used at the adjacent power stations, also located within Virginia, and (3) the Virginia State Corporation Commission will regulate the Project.

A copy of the order, issued in Docket No. CP23-468, can be found here.