Pennsylvania

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Controversial pipeline case raises questions about PUC chair’s industry ties

Rob Powelson is chair of the state Public Utility Commission and a member of the Greater Philadelphia Energy Action Team.

Rob Powelson is chair of the state Public Utility Commission and a member of the Greater Philadelphia Energy Action Team.

In West Goshen, Chester County, many residents don’t see how a proposal for an industrial pump station in a residential neighborhood will benefit them or their township.

The pump station is part of an intricate plan to move natural gas liquids, ethane and propane, through a pipeline from the Marcellus Shale in western Pennsylvania to the revamped industrial complex in Marcus Hook. Until recently, the plan was to ship most of the ethane overseas, with only the possibility of propane distribution to local markets.

“Safety and health are the biggest concerns,” West Goshen resident Allen Feinberg said. “Other concerns are depreciation of quality of life, increased pollution in the area.”

Another Chester County resident sees things differently.

Rob Powelson was appointed to the Public Utility Commission in 2008 after serving as president of the county Chamber of Commerce. Powelson became chair of the commission in early 2011, just as the Marcellus Shale boom was exploding.

In an interview with StateImpact Pennsylvania in January, Powelson endorsed the project, known as the Mariner East pipeline.

“We have this opportunity to move product to the eastern seaboard versus moving those products to Texas and Louisiana,” he said. “That’s a real game changer for the region going forward.”

That was before the project’s developer, Sunoco Logistics asked permission from the PUC to be exempt from local zoning laws in West Goshen and 30 other towns along the pipeline’s nearly 300-mile path to build pump and valve stations for the Mariner East pipeline.

At a recent public meeting, when asked if he should recuse himself, Powelson said he didn’t know.

“I do my job and I look at the facts”

Powelson is a member of the Greater Philadelphia Energy Action Team, a group of business leaders, politicians, and academics strategizing about how to expand the energy industry in southeastern Pennsylvania.

“We’re all now coming together to really design what the master plan is for the region,” Powelson told StateImpact Pennsylvania.

The group, organized by the Greater Philadelphia Chamber of Commerce, is chaired by Phil Rinaldi, CEO of the Philadelphia Energy Solutions oil refinery, who described the team’s mission along with chamber president Rob Wonderling in a March column in the Delaware County Times:

[T]he Energy Action Team serves as ambassadors, advocates, and educators for expansion of and investment in the energy, petrochemical, manufacturing, and infrastructure sectors in the area by promoting the economic environment and business relationship between Marcellus gas producers, prospective new gas consumers, and logistics companies for the purpose of causing a major pipeline with excess gas carrying capacity to connect the Marcellus with a new, regional Philadelphia Hub.

That pipeline, separate from the Mariner East project, would bring methane gas from the Marcellus Shale to fuel new industries on the Delaware River.

Other members of the Energy Action Team include Congressman Pat Meehan (R-Delaware) and Michael Krancer, the former secretary of the state Department of Environmental Protection. Krancer now works as an attorney with the Philadelphia law firm Blank Rome and is currently one of the attorneys representing Sunoco Logistics in its case before the Public Utility Commission.

Krancer and Powelson both spoke at an industry conference hosted by Blank Rome last October. Presentation materials show Powelson’s keynote address included the Mariner East pipeline project.

Powelson told StateImpact Pennsylvania he does not believe the his role on the Energy Action Team poses a conflict of interest in the Sunoco Logistics case and is able to separate his two roles in the best interest of the public.

“I do my job and I look at the facts,” Powelson said, noting that he does not receive compensation for being on the team and has not been told how to vote by other members.

Barry Kauffman with the government reform group Common Cause Pennsylvania argues whether Powelson is being paid or not, the public has reason to suspect a bias.

“The code of conduct requires public officials in the PUC and especially the chairman to avoid any potential conflicts of interest or even the perception of a conflict of interest,” he said.

Sunoco shifts tactics amid growing controversy

Faced with growing opposition from residents in West Goshen, as well as four environmental groups that have also filed to intervene, Sunoco Logistics is putting more effort into its case before the PUC.

On Tuesday, Sunoco Logistics withdrew an application to the West Goshen Township zoning board. The company was seeking a variance to build the pump station in a residential zone, while arguing to the PUC that it is a public utility corporation under the law and therefore, the structure is exempt from local zoning.

“The Public Utility Commission’s open hearing process, by law, is the appropriate public venue for approval of buildings related to the pipeline,” spokesman Jeff Shields said in a statement.

The company has also amended its petition to show that the pipeline will ship propane to a Sunoco Logistics facility in Aston, Delaware County for distribution to local markets. Demonstrating an intrastate use that would be regulated by the PUC could bolster Sunoco Logistics’ argument that it is a public utility corporation.

The question before Powelson and the four other commissioners is whether the pump and valve stations are “reasonably necessary for the convenience or welfare of the public.”

That is where Powelson and other residents in Chester County may disagree, says Lynda Farrell, Executive Director of the Pipeline Safety Coalition. The Downingtown-based group helps residents work with pipeline operators and regulators on projects like this one.

Farrell says residents are often the last to know about a company’s plans for their neighborhoods, which often puts them at a disadvantage. She believes Powelson could restore the public’s trust by choosing not to vote in this case.

“Mr. Powelson’s ability or inability to remain unbiased in the Sunoco PUC filing decision by nature is going to be in the eye of the beholder and recusing himself would eliminate any question of conflict of interest on the part of the public,” Farrell said.

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