In the aftermath of Winter Storm Uri, the Texas Legislature in Senate Bill 3 (2021) required the Railroad Commission of Texas to adopt rules requiring certain pipeline facility operators to weatherize equipment in order to maintain reliability during extreme weather conditions. The Railroad Commission’s implementing rules, adopted August 30, 2022, and memorialized in Statewide Rule 66, impose immediate compliance obligations on a number of upstream and midstream operators.

Subject Facilities

These “weatherization” rules apply to critical gas supply chain facilities (including those that produce gas and those that process/store/transport gas) and critical gas pipeline facilities (regulated by the Railroad Commission under Chapter 121 of the Texas Utilities Code, and that directly serve natural gas electric generation facilities in ERCOT) that are included on the State’s electricity supply chain map. Upstream and midstream operators should be checking their mail. In the coming weeks, the Railroad Commission intends to notify operators of which of their facilities are on the electricity supply chain map.

Key Provisions

The following is a high-level summary of key provisions in the newly adopted “weatherization” rules.

1. By December 1, 2022, and each December 1 thereafter, subject operators must implement weather emergency preparation measures (such as training personnel and weatherizing equipment) intended to ensure the sustained operation of facilities. Subject operators must also correct known issues around major weather-related forced stoppages that have prevented sustained operations during previous weather emergencies. The Railroad Commission intends to periodically publish “weatherization practices.”
2. By December 1, 2022, and each December 1 thereafter, subject operators must file an attestation form signed by an authorized representative stating that the operator has implemented required weather emergency preparation measures, describing all activities undertaken to implement weatherization practices, and describing corrective actions taken to mitigate known major weather-related forced stoppages that previously prevented sustained operations.
3. Subject operators must file reports with the Railroad Commission when a weather-related event causes an outage.

Next Steps

Upstream and midstream operators should monitor their mail for the electricity supply chain map notification. In the meantime, most upstream and midstream operators with facilities on the electricity supply chain map will have already filed emergency operations plans with the Railroad Commission, and so these operators should look for opportunities to leverage the work done to prepare those plans in order to be well-positioned to meet the December 1 attestation deadline. In addition, to comply with the weatherization requirements, subject operators should keep an eye out for the forthcoming “weatherization practices” that the Railroad Commission will publish. The Railroad Commission intends to begin inspecting facilities for compliance with new Statewide Rule 66 soon after December 1, 2022, with possible penalties of up to $1 million for violations.