Debtors in bankruptcy have broad authority to shed unfavorable contracts through the executory contract rejection process, subject to approval of the bankruptcy court. The Federal Energy Regulatory Commission (FERC), on the other hand, has exclusive jurisdiction over any request to modify or abrogate a “filed rate” under the Federal Power Act and the Natural Gas Act, which includes certain power purchase agreements and natural gas transportation contracts. For years, debtors and distressed counterparties faced uncertainty as to whether a bankruptcy court’s rejection order could fully relieve the debtor from performing under a filed-rate contract or if further relief from FERC (potentially applying the stringent “public interest” standard set out in the Mobile-Sierra line of cases) may be necessary to excuse future performance.
Continue Reading More Courts Reject FERC’s Jurisdictional Claims in Battle Over Rejection of Filed-Rate Contracts in Bankruptcy

On July 8, 2022, the Pipeline and Hazardous Materials Safety Administration (PHMSA) issued a notice of regulatory enforcement discretion for particular gathering lines. Gathering lines are those pipelines that transport gas from a current production facility to a transmission line or main (see 49 C.F.R. § 192.3). The notice specifically applies to existing Type C gas gathering pipelines with an outer diameter greater than or equal to 8.625 inches, but less than or equal to 12.75 inches. It also applies only to violations of safety requirements identified in 49 C.F.R. § 192.9 until May 17, 2024.
Continue Reading PHMSA Issues Notice of Limited Enforcement Discretion for Some Gas Gathering Pipelines