The Federal Energy Regulatory Commission decided to cancel a contract it had with a firm that was being hired to perform an environmental review on a sprawling Virginia natural gas infrastructure project.
In a Dec. 15 public filing, FERC stated that it had dissolved its agreement to Burns & McDonnell after discovering that the firm was also under contract with Columbia Gas Transmission on a separate infrastructure project. FERC stated that this was clearly an organizational conflict. Burns & McDonnell waived the 30-day notice requirement for contracts, according to the filing. This allowed for a new contractor, without delay, to be brought onboard.
This swift change was a major one for a federal agency once criticized for being nothing more than a rubber stamp to energy suppliers. According to agency documents, FERC staff had signed the contract with Burns & McDonnell just 13 days before.
It is not clear when regulators became aware about the alleged conflict. The termination notice did not specify how the information was discovered. The letter to reverse the earlier decision was only five days old. Bay JournalReporter contacted the agency’s communications department to ask questions about Burns & McDonnells selection.
Tamara Young-Allen, a spokeswoman for the commission, thanked you for your inquiry. Her reply, also dated December 15, also stated that she was grateful. After further review, it was determined that the Commission had released the third-party contractor. The Commission will now initiate the process for a third-party contractor.
Energy watchdog organizations praised FERC’s turnaround. Critics argued that if the Burns & McDonnell environmental assessment of the $102million project was allowed to proceed, it would have been biased due to the financial interests of the other Columbia Gas project.
Mary Finley-Brook, a professor of geography at the University of Richmond and an opponent of fossil fuel-derived energies, said that it was great that FERC addressed the issue. We are looking to find leadership. We hope that FERC will be more responsive to the science and public’s opinions in this round.
Itai Vardi was a communications and research specialist at the Energy and Policy Institute who was the first to discover Burns & McDonells ties with Columbia Gas.
Vardi said that the conflict wasn’t immediately obvious. There was no mention in the permit paperwork of a proposal to improve a meter station, a compressor station (Louisa County), and a compressor stations in Goochland County. All this was along an existing company pipeline north from Petersburg.
Columbia Gas Transmission, a subsidiary Canadian-based giant TC Energy submitted plans to FERC in September. The project was called the Virginia Electrification Project.
Most energy projects must be examined under the National Environmental Policy Act to determine whether they will have any environmental impact and how they can be avoided. Permit applicants in the energy sector pay contractors to conduct these assessments. However, federal guidelines state that contractors are third parties who answer to FERC.
Columbia Gas presented names to FERC in October according to documents. Publicly available records do not indicate the exact number submitted. Burns & McDonnell was selected by the agency to be the independent contractor for FERC.
Vardi stated that the conflict became evident when Columbia Gas presented a second infrastructure plan. In December, the company submitted what it called the Virginia Reliability Project. The work will replace approximately 50 miles of pipeline south from Petersburg and improve compressor stations in Petersburg and Emporia.
Columbia Gas submitted one of its documents for the project. It lists contractors it retained to do various aspects of the work. It includes a familiar face: Burns & McDonnell.
Vardi claimed that VEP and VRP proposals were submitted separately, but they are inextricably linked. He said that upgrades on the northern leg are insufficient to make the second leg more efficient. Both projects include work at Petersburg’s compressor station.
Vardi stated that Burns & McDonnell currently receives two checks from TC Energy in this sense. One as an unbiased third-party contractor who performed the environmental review for FERC’s VEP and another as a TC Energy contractor to the VRP.
The Bay JournalSubmitted detailed questions for TC Energy and Burns & McDonnell.
TC Energy did nothing to address the conflict. It only responded with a statement highlighting potential benefits for customers. Customers have expressed the need for greater natural gas reliability in the region. TC Energy responded only with a statement highlighting the potential benefits of the project to customers.
A day prior to FERC revoking the consultants contract to act as a third party reviewer on behalf of the publics’ behalf, a Burns & McDonnell spokeswoman replied by email, stating only that the projects were separate and that they had been filed with FERC separately.