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Senate committee hears bill to raise LNG storage threshold for certificate-of-need review
Summary
The Energy, Utilities, Environment, and Climate Committee heard testimony on Senate File 1455, which would raise the liquefied natural gas (LNG) storage threshold that triggers Minnesota Public Utilities Commission certificate-of-need review; bill was laid over for possible omnibus inclusion.
Senate File 1455, carried by Sen. John Hoffman, was heard March 12 before the Energy, Utilities, Environment, and Climate Committee in Room 1150 of the Minnesota Senate Building. The bill would raise the storage-capacity threshold that triggers a certificate of need (CN) from the existing statutory level for liquefied natural gas (LNG) storage set in the 1970s.
The measure matters because a CN requires a time-consuming and often costly public review by the Minnesota Public Utilities Commission (PUC). Proponents said the current 100,000-gallon CN threshold discourages utilities from considering small- to mid-scale LNG storage, which utilities use to "hedge" by buying gas when prices are low, storing it, and using the supply when market prices rise. "LNG storage . . . saves customers millions of dollars," Sen. John Hoffman said in opening remarks. Jamie Fitsky, director of government affairs for CenterPoint Energy, told the committee the storage systems covered by the bill would cost on the order of $5–15 million for modular tanks and thus are much smaller than the multiyear, multihundred-million-dollar projects typically subject to CN review.
Fitsky said the bill would change only the CN threshold and would not alter existing local, state, or federal permitting and safety requirements. "This bill does not change any permanent permitting requirements. All existing local, state, and federal permits remain the same," Fitsky testified. John Heer, director of storage and supply planning at CenterPoint Energy and a professional engineer with long experience in LNG, testified that "a hundred thousand gallons of LNG storage is not a large energy facility" and described LNG tanks and their safety characteristics.
Committee members asked whether the change would affect safety, permitting or PUC oversight. Fitsky and Heer said the PUC would retain oversight through rate-case prudency reviews and that safety and siting rules are unchanged. No members requested a vote on the bill at the hearing; the committee chair said the intent was to "lay this bill over for possible inclusion in the omnibus bill." The committee did not take a formal roll-call vote on SF 1455 at the March 12 hearing.
The bill will be available for further committee action or inclusion in omnibus legislation. Support letters and PUC consultation were included in the bill packet, proponents said.
