D. Albany Loop Project
The Joint Proposal provides that Niagara Mohawk will withdraw its pending Article VII petition for a Certificate of Environmental Compatibility and Public Need for the Albany Loop
Project. Under the Joint Proposal, the Company will not refile such a petition during the terms of the rate plan “except for the limited circumstance where the Company determines the project is necessary to address exigent operating conditions that would impact safe and reliable service to the Company’s existing customers.” If the Company refiles an Article VII petition for the Albany Loop Project, it must include a detailed engineering assessment and other support for the asserted exigent operating conditions that allow it to refile the petition during the terms of the rate plan.
As originally proposed in these proceedings, the Albany Loop Project was estimated to cost about $79.8 million and involve the installation of approximately 7.3 miles of gas transmission main to connect the south end of the Albany transmission loop in the Town of Bethlehem to the northeast end of the loop in Troy, closing the horseshoe-shaped loop that currently exists. According to Niagara Mohawk, closing the Albany Loop would improve system reliability and allow the Company to continue to meet customer demand.
In testimony, DPS Staff noted that the Company did not foresee a reliability concern until the winter of 2027-2028 and did not propose starting construction until after FY 2022. As a result, DPS Staff recommended that, within 90 days after issuance of an order setting rates in these proceedings, the Company be required to solicit and consider NPA solutions to mitigate the need for the Albany Loop Project.
Multiple parties provided testimony on the Albany Loop Project. In its testimony, CANY stated that ratepayer funds should not be used for the Albany Loop Project on the grounds that the record did not establish that the project was consistent with the CLCPA, that the Albany Loop Project was in fact inconsistent with the CLCPA, and that “the Company has not provided adequate evidence for the need for the Project from either a reliability or gas supply need perspective.” SNYFGP summarized public opposition to the Albany Loop Project, asserting that the Company did not consider NPA alternatives and that the project was not needed or justified, posed hazards to the environment, and likely would conflict with the CLCPA’s requirements.
In its Statement in Support, Niagara Mohawk asserts that the Joint Proposal represents a significant commitment by the Company to explore NPAs in place of traditional infrastructure investments and reflects the feedback of the parties and others regarding the proposed Albany Loop Project as well as other large transmission projects. DPS Staff states that the Joint Proposal reasonably recognizes the parties’ concerns with the Albany Loop Project and that the withdrawal of the separate Albany Loop Project Article VII Petition is possible in these proceedings only because these proceedings resulted in a negotiated agreement between the Signatory Parties. In its Statement of Neutrality, AGREE lists the withdrawal of the Albany Loop Project Article VII application as among the positive aspects of the Joint Proposal.
SNYFGP opposes the Joint Proposal on the ground that it allows the Company to refile an Article VII petition for the Albany Loop Project during the term of the rate plan. SNYFYGP argues that this provision represents a “gaping loophole” that gives the Company an “open-ended ability to refile [its] Article VII application” during the term of the rate plan. SNYFGP maintains that the Commission should reject the Joint Proposal or modify it to include a process for the Commission to review the Company’s asserted exigent circumstances before the Company can refile an Article VII petition for the Albany Loop Project. Niagara Mohawk responds that the provision allowing the filing of an Article VII petition for the Albany Loop Project during the rate plan is reasonably limited to allow the Company to address exigent operating conditions in order to provide safe and reliable gas service. The Company additionally notes that the Joint Proposal provides no funding for further work on the Albany Loop Project and that any future Article VII petition for the Albany Loop Project would be subject to Commission review, “which would necessarily include an assessment of the Company’s assertion that the project was needed to address . . . ‘exigent operating conditions.’” DPS Staff similarly states that any new Article VII application for the Albany Loop Project would be scrutinized to assess the need for the Project and asserts that it “has no expectation at this time that Niagara Mohawk will submit a new application for the Albany Loop Project.”
We conclude that the Joint Proposal contains sufficient safeguards to ensure that the Company files an Article VII petition with respect to the Albany Loop Project during the term of the rate plans only if the project is needed to meet the Company’s obligations to provide safe and adequate service under PSL §65. As the Company and DPS Staff point out, any such petition would be subject to intervention by parties that oppose the project and Commission review in the Article VII proceeding. The Joint Proposal strikes a reasonable balance between the interests against further natural gas infrastructure projects and the Company’s need to provide safe and reliable service to current customers. To ensure that interested parties in these proceedings are afforded adequate notice to participate in a new Article VII proceeding if Niagara Mohawk does file a new application, we will require that Niagara Mohawk serve the parties in these proceedings and also those parties participating in Case 19-T-0069 with notice of any such application within five days of its filing. Niagara Mohawk must file an affidavit of service with the Secretary to the Commission as soon as it is available.
Finally, we agree with DPS Staff that the Joint Proposal reasonably defers for future recovery from ratepayers the preliminary engineering and development costs prudently incurred based on the Company’s prior estimation that the project was needed for system reliability.”