Comments of Kinder Morgan Interstate Pipelines under Docket No. PL15-1-000

UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Cost Recovery Mechanisms For ) Docket No. PL15-1-000 Modernization of Natural Gas Facilities ) COMMENTS OF THE KINDER MORGAN INTERSTATE PIPELINES The Kinder Morgan Interstate Pipelines1 submit these comments in response to the Federal Energy Regulatory Commissions (Commission or FERC) Proposed Policy Statement issued on November 20, 2014, concerning the ability of interstate natural gas pipelines to recover the costs of modernizing their facilities and infrastructure to enhance the safe and efficient operation of pipelines in the above-referenced proceeding (Policy Statement).2 The Kinder Morgan Interstate Pipelines appreciate the Commissions efforts in this proceeding to establish guidelines for interstate natural gas pipelines to recover the costs associated with updating and replacing pipeline facilities and recognition that, as a result of ongoing legislative actions and 1 For purposes of this filing, the Kinder Morgan Interstate Pipelines include Bear Creek Storage Company LLC, Cheyenne Plains Gas Pipeline Company, L.L.C, Colorado Interstate Gas Company, L.L.C., Elba Express Company LLC, El Paso Natural Gas Company, L.L.C., , Kinder Morgan Louisiana Pipeline LLC, Mojave Pipeline Company, L.L.C., Southern LNG Company LLC, Southern Natural Gas Company, L.L.C., Tennessee Gas Pipeline Company LLC, TransColorado Gas Transmission Company LLC, and Wyoming Interstate Company L.L.C. Kinder Morgan is a joint venture participant with unaffiliated entities in the following interstate pipelines and provides these comments as operator of such pipelines: Horizon Pipeline Company, L.L.C., Kinder Morgan Illinois Pipeline LLC, Natural Gas Pipeline Company of America LLC, Midcontinent Express Pipeline LLC, Ruby Pipeline, L.L.C., Sierrita Gas Pipeline LLC, and Young Gas Storage, Ltd. 2 Cost Recovery Mechanisms for Modernization of Natural Gas Facilities, Proposed policy statement, 149 FERC 61,147 (2014). 1 regulatory initiatives establishing new standards and requirements, the costs to enhance safety, reliability and regulatory compliance will be significant. For example, the Environmental Protection Agency (EPA) will initiate a rulemaking effort this summer, with a final rule expected in 2016, to set standards for methane and volatile organic compound emissions from new and modified oil and gas production sources, and natural gas processing and transmission sources. Also, this year the Pipeline and Hazardous Material Safety Administration (PHMSA) will propose additional natural gas pipeline safety standards. While the standards will focus on safety, they are expected, according to the Administrations statements, to be designed to lower methane emissions as well. As discussed below, timely cost recovery, ...