Spire claims ‘fatal consequences’ if feds allow St. Louis pipeline to be shut down

The largest natural gas utility in Missouri claims its customers could face “potentially fatal consequences” if it is not allowed to continue operating a pipeline in St. Louis while a federal commission reconsiders its earlier approval. 

The Spire STL Pipeline, an affiliate of Spire Missouri, petitioned energy regulators earlier this week for a temporary emergency certificate to keep transporting natural gas on the pipeline for now. 

Spire’s STL Pipeline, a 65-mile gas pipeline from Illinois into Missouri, has been in operation since 2019. But it faces a ruling from a federal court panel saying regulators improperly granted approval to the pipeline. 

The company maintains the pipeline was a necessary step to improve reliability. Without it, Spire claims as many as 133,000 customers could have lost gas service during a February cold snap that forced hours-long electrical outages in Kansas City and wreaked havoc in Texas.

“Due in large part to the STL Pipeline, St. Louis avoided those impacts,” Spire STL Pipeline says in its filing. “The (Federal Energy Regulatory) Commission must assure that customers who depend on this important gas infrastructure are not suddenly left without it — particularly as another winter season approaches.”

Now, Spire is asking regulators to let the pipeline keep operating while the federal commission deals with the order from a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit, which struck down the Federal Energy Regulatory Commission’s approval of the pipeline and remanded the case to FERC for further review. 

State regulators with the Missouri Public Service Commission opened an investigation Thursday into Spire’s petition, citing the company’s warning of service shutdowns.

“Loss of the STL pipeline will have a detrimental impact on the health and safety, the prosperity and the property of the St. Louis community, particularly the communities that are most vulnerable,” said Sean Jamieson, general counsel for the STL Pipeline.

Jamieson said without the STL pipeline, up to 175,000 Spire customers would be at risk of losing service when temperatures dip below 9 degrees. At that point, the utility would have to pull from its reserves. If it had to deplete reserves completely, he said, service for as many as 400,000 customers could become unreliable at temperatures as warm as 38 degrees. 

“So the gravity of the circumstances is severe,” he said.

Before the pipeline, Jamieson said, Spire Missouri was largely dependent on natural gas purchases from Texas and Oklahoma, which have become more competitive in recent years. The pipeline allowed the utility to diversify the regions it was buying natural gas from. After it became operational, the company had less need for capacity on pipelines from Texas and Oklahoma and stopped purchasing it. Now, it doesn’t have access to that capacity. 

Spire’s pipeline first won approval in 2018 from FERC, which then denied a request from the Environmental Defense Fund for a rehearing. The nonprofit appealed FERC’s approval in January 2020, saying the agency had not rigorously studied the need for the pipeline. 

In a statement Thursday, EDF’s senior director and lead counsel on energy markets and utility regulation, Natalie Karas, said the court ruled FERC “failed to consider evidence of self-dealing and failed to demonstrate the pipeline was necessary.” But Spire STL chose to proceed anyway, Karas said. 

“This is a problem of Spire STL’s own making,” Karas said. “No one has suggested that service to St. Louis customers should be compromised. At the same time, customers must be protected from costs and risks associated with unnecessary infrastructure.” 

Such an authorization, Karas said, “should be carefully scrutinized based on facts, not fear.” 

Pipeline history 

Spire announced its intent to build the pipeline in 2016 and invited natural gas “shippers” to enter contracts for the gas the pipeline would transport. None committed, according to the appeals court order. 

Under the Natural Gas Act, for FERC to issue a certificate for a gas company to build, it must find that the pipeline “is or will be required by the present or future public convenience and necessity.” 

But with no outside companies to work with, Spire entered a “precedent agreement” with one of its own affiliates for 87.5% of the pipeline’s capacity. 

FERC approved a certificate for the pipeline in 2018, and EDF requested a rehearing, which FERC denied. EDF then appealed the decision.

The three-judge panel agreed with EDF, saying the nonprofit had “identified plausible evidence of self-dealing.”

Jamieson said the pipeline company has until Aug. 6 to request a rehearing by the court of appeals. He did not say directly whether it planned to do so but that it would pursue all regulatory and legal paths to secure energy reliability for St. Louis.

If there is no rehearing, he said, the timeline for when the pipeline could have to shut down — if it doesn’t have an emergency certificate from FERC — could vary.