Spire STL pipeline can keep operating through the winter, regulators decide
Spire warned eastern Missouri could suffer natural gas outages this winter without the pipeline.
The Spire STL Pipeline can keep operating through this winter under a temporary certificate from the Federal Energy Regulatory Commission. (Getty Images)
The commission’s order grants Spire STL a temporary certificate to operate while it determines the long-term fate of the pipeline, which serves Spire Missouri’s customers in the St. Louis area. Its initial certificate to operate was vacated by a federal appeals court this summer.
“The record demonstrates that without a temporary certificate…Spire Missouri, will experience a loss of gas supply potentially impacting hundreds of thousands of homes and business during the winter heating season,” order states. “Therefore, we find that an emergency exists and will issue Spire a temporary certificate.”
In a statement, Spire STL Pipeline president Scott Smith said the company would cooperate with regulators as they consider the permanent pipeline certificate.
“We are confident that when people have an opportunity to review the proven benefits of the STL Pipeline and current market conditions they will agree that there is a critical need to keep fully operational infrastructure in service to ensure continued access to reliable, affordable energy for homes and businesses in the greater St. Louis region,” Smith said.
The Spire STL Pipeline, which began operations in 2019, runs 65 miles from Illinois into Missouri, and Spire Missouri says it makes service more reliable by diversifying the sources the utility uses to get its gas.
The pipeline’s certificate to operate was vacated this summer by the U.S. Court of Appeals for the D.C. Circuit under a challenge from the Environmental Defense Fund, which identified “plausible evidence of self-dealing,” according to the court’s order, which remanded the certificate back to federal regulators. The pipeline’s customer was Spire Missouri, an affiliated company.
The pipeline company first announced its intent to build in 2016 and invited natural gas shippers to enter contracts for the gas the pipeline would transport. None committed, according to the order from the appeals court.
Under the Natural Gas Act, for federal regulators to issue a certificate for a company to construct and operate an interstate pipeline, it must find that the pipeline “is or will be required by the present or future public convenience and necessity.”
Spire STL and Spire Missouri, which are affiliates, entered a contract for 87.5% of the pipeline’s capacity, which the court said in its June 2021 order was “plausible evidence of self-dealing.”
Federal regulators, according to the appeals court order, ignored this when they granted Spire approval in 2018 and denied a request from the nonprofit Environmental Defense Fund for a rehearing.
The nonprofit has, among its members, St. Louis area landowners who lost property to the pipeline. It appealed FERC’s approval in January 2020, saying the agency had not rigorously studied the need for the pipeline. The U.S. Court of Appeals this summer sided with EDF and vacated FERC’s approval and sent the pipeline back to the agency for further review.
That review will take place while the pipeline’s temporary certificate gets customers through the winter.
The pipeline’s general counsel has said previously that without the pipeline, as many as 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.
Spire came under fire from environmental groups in recent weeks for its dire warnings of potential outages this winter if it were not allowed to operate the pipeline.
“We want to keep you informed and prepared for potential natural gas disruptions — and outages — this winter if the pipeline is not kept in service,” Spire said in an email to customers last month, blaming a “New York-based environmental group” that challenged the pipeline in court.
Staff of the Missouri Public Service Commission said in a filing the email appeared to be an effort by Spire to “to mobilize public opinion, through fear” to pressure regulators to approve the pipeline’s certificate.
The company followed up with a more measured note to customers this week predicting its temporary certificate would be approved.
In a note to customers Friday evening, Spire Missouri celebrated the news and said the pipeline had saved customers in eastern Missouri hundreds of millions of dollars during Winter Storm Uri in February. The company has previously pegged that figure at $300 million, which is disputed by an analysis by staff of the Public Service Commission.
Customers’ bills are also expected to climb considerably to make up for high natural gas costs from the February deep freeze that forced electrical outages across the Midwest. Gas prices are 60% higher than in 2020, Spire said in a filing with state regulators last month.
“Because the extension of this pipeline was never in doubt, and Spire claims to care about keeping its customers warm, Sierra Club calls on Spire to stop disconnecting its customers who are behind on their bills now that prices are about to skyrocket following its rate increase,” said Michael Berg, political director for Sierra Club in Missouri.
Spire on Friday also filed with the U.S. Supreme Court, asking it to review the appeals court decision vacating the pipeline’s original certificate.
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