Bill would raise LNG storage threshold that triggers certificate of need from 100,000 to 1 million gallons

Representative Ben Sexton told the committee House File 2248 would update the statute that defines “large energy facility” for liquefied natural gas (LNG) storage, raising the certificate-of-need trigger from 100,000 gallons to 1,000,000 gallons. Sexton said the change would make it more feasible for utilities to consider small-scale LNG storage as a resiliency and reliability option without altering state, local or federal permitting requirements.

Jamie Fitsky (CenterPoint Energy’s government-affairs director) and John Heer, CenterPoint’s director of storage and supply planning, testified that the certificate-of-need process is intended mainly for very large, multihundred-million-dollar projects and that a modernized threshold would allow utilities to pursue modular LNG storage projects that are smaller and less costly. Fitsky said a typical modular approach would use several 70,000-gallon units; a practical project size for utilities could be in the 200,000–350,000 gallon range and cost roughly $5 million–$10 million, while a one-million-gallon facility would be a different scale and cost more (the witnesses cited an order-of-magnitude figure of about $15 million for larger installations).

John Heer, a professional engineer with extensive LNG experience, told the committee that “a hundred thousand gallon LNG storage tank is not a large energy facility,” and that LNG is stored as a dense cryogenic liquid. He said the change is about the certificate-of-need administrative threshold and would not alter safety, siting, or permitting requirements that remain governed by existing codes and agencies. Heer noted utilities are preparing integrated resource plans for the PUC and that being able to include small-scale LNG explicitly in those plans would give utilities more flexibility to meet winter peak demand.

Committee members asked whether raising the threshold would aid storage of renewable natural gas (RNG) produced by digesters; CenterPoint witnesses agreed the change could ease options for storing RNG. Members also questioned why the bill raises the threshold to a full million gallons instead of a smaller increment; CenterPoint witnesses said a million is a pragmatic round number that sets a clear dividing line between very small modular projects and larger installations that traditionally require full certificate-of-need review.

Representative Sexton said the bill is a resiliency measure and thanked co-sponsors and labor groups that provided letters of support. The committee adopted related procedural actions and laid House File 2248 over for further consideration.