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UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION

Ridgeline Midstream Services LLC

Docket No. RP22-847-001

ANSWER OF RIDGELINE MIDSTREAM SERVICES LLC TO THE PROTEST OF APPALACHIAN TRUNK PIPELINE COMPANY, LLC

Filed: October 17, 2022

George Trujillo, Responsible Partner Brett Callahan, Lead Associate David Stanton, Working Associate

CALDERWOOD & HARKNESS LLP 1601 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-4100 Facsimile: (202) 555-4101

Email: gtrujillo@calderwoodharkness.com

On behalf of Ridgeline Midstream Services LLC 700 Kanawha Boulevard East, Suite 1400 Charleston, WV 25301

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I. PRELIMINARY STATEMENT

Ridgeline Midstream Services LLC ("Ridgeline" or "Applicant"), a Delaware limited liability company and wholly owned subsidiary of Dunmore Energy Holdings Ltd. ("DEH"), a Cayman Islands exempted limited company, hereby submits this Answer to the Protest filed by Appalachian Trunk Pipeline Company, LLC ("ATPC") on August 15, 2022 (the "Protest"). This Answer is filed pursuant to Rule 213 of the Commission's Rules of Practice and Procedure, 18 C.F.R. § 385.213, and in accordance with the procedural schedule established by the Commission in its September 22, 2022 order in this proceeding.

ATPC's Protest challenges two discrete aspects of Ridgeline's Application filed on May 12, 2022 (the "Application"): (1) the design of the proposed receipt-point metering station at the Wetzel County Interconnect (the "Metering Station"), and (2) the allocation of $14.7 million in interconnection facilities costs proposed to be borne by ATPC pursuant to the cost-causation methodology set forth in the Application. For the reasons set forth below, Ridgeline respectfully submits that ATPC's arguments on both counts are without merit and should be rejected by the Commission.

The Application was filed on May 12, 2022, pursuant to Sections 4 and 7 of the Natural Gas Act ("NGA"), 15 U.S.C. §§ 717c, 717f, and 18 C.F.R. Parts 154, 157, and 284, seeking authorization for the construction and operation of interconnection facilities at the Wetzel County Interconnect and approval of initial tariff rates for open-access transportation service on the Ridgeline Pipeline System. On June 14, 2022, the Commission issued a Notice of Filing establishing an intervention and protest deadline of August 15, 2022. ATPC timely filed its Protest on that date.

The proposed interconnection is located at Milepost 0.0 of the Ridgeline Pipeline System, at which point the Ridgeline system ties into ATPC's existing 30-inch-diameter mainline at ATPC Milepost 412.6, in Wetzel County, West Virginia. The Wetzel County Interconnect is the sole receipt point on the Ridgeline Pipeline System and represents the critical physical link between the two pipeline systems that will enable the transportation of natural gas from the prolific Marcellus and Utica shale production areas to downstream markets served by both Ridgeline and ATPC.

As this Answer demonstrates in detail, the Metering Station design is fully adequate under applicable industry standards — including AGA Report No. 9 and GPA Midstream Standard 2261 — and is consistent with Commission precedent governing metering and measurement at pipeline interconnection points. The three-run ultrasonic flow meter configuration provides full redundancy for bidirectional flow measurement, and the dual-redundant gas chromatograph installation ensures continuous, accurate gas quality monitoring. ATPC's assertions to the contrary are unsupported by the technical record and reflect a fundamental misunderstanding of modern ultrasonic metering technology and its application at custody-transfer interconnection points.

Similarly, the cost allocation methodology set forth in the Application is consistent with well-established cost-causation principles and Commission precedent, including FERC Order No. 2004 and its progeny. The proposed allocation of $7.6 million to Ridgeline (34.08%) and $14.7 million to ATPC (65.92%) of the $22.3 million total interconnection facilities cost reflects a detailed, facility-by-facility analysis that assigns costs to the party whose system requirements necessitate each component of the interconnection. ATPC's insistence on an arbitrary 50/50 cost split — which would require Ridgeline to subsidize $3.55 million in facilities that Ridgeline will neither own nor operate — contravenes cost-causation principles and should be rejected.

II. BACKGROUND

A. The Ridgeline Pipeline System

Ridgeline owns and operates the Ridgeline Pipeline System (the "System"), a 187-mile, 24-inch-diameter high-pressure natural gas pipeline extending from a receipt point at the Wetzel County Interconnect in Wetzel County, West Virginia (approximate coordinates 39.6120° N, 80.7540° W) to a delivery point at the Waynesburg Compressor Station in Greene County, Pennsylvania (approximate coordinates 39.8965° N, 80.1810° W). The System was placed in service on October 1, 2021, and its original construction cost was $587.2 million.

The System has a design capacity of 1.2 Bcf/d (1,200,000 Dth/d at an assumed BTU content of 1,000 BTU/cf), making it one of the significant gathering and transmission systems serving the Appalachian Basin. Current throughput on the System is approximately 680 MMcf/d, representing approximately 56.67% utilization of the System's design capacity. This throughput level reflects the phased development of production in the upstream areas served by the System and is expected to increase as additional shippers contract for capacity on the System and as the proposed interconnection with ATPC's system becomes operational.

The System is supported by three compressor stations: the Wetzel Station (located near the Wetzel County Interconnect at approximately Milepost 2.0), the Mannington Station (located at approximately Milepost 87.0 in Marion County, West Virginia), and the Waynesburg Station (located at the System's delivery point at approximately Milepost 187.0 in Greene County, Pennsylvania). These three stations provide aggregate installed compression of 45,000 horsepower, consisting of a combination of natural gas-fired turbine-driven centrifugal compressors and electric motor-driven reciprocating compressors. The compression configuration provides sufficient flexibility to accommodate variable throughput conditions and to support bidirectional flow operations at the Wetzel County Interconnect when required by market conditions.

Ridgeline is registered with the Commission under FERC Code 960442 and holds a blanket certificate under NGA Section 7(c) for the construction, acquisition, and operation of certain natural gas pipeline facilities.

B. Ridgeline's Application

On May 12, 2022, Ridgeline filed its Application under Docket Nos. RP22-847-000 (rate case) and RP22-847-001 (interconnection), seeking approval of an initial tariff rate for interstate transportation service under FERC Gas Tariff, Original Volume No. 1, Part 284, Subpart G open-access transportation, and authorization for the construction and operation of physical interconnection facilities with ATPC at the Wetzel County Interconnect. The Application was accompanied by detailed engineering drawings, cost estimates, environmental reports, and supporting testimony by Ridgeline officers and outside experts.

The proposed initial recourse rate under the Application is $0.2265 per Dth, consisting of a reservation charge component of $0.2223 per Dth and a usage charge component of $0.0042 per Dth. This rate was derived from a cost-of-service study based on a rate base of $612.40 million, which includes the original construction cost of $587.2 million, the net investment in interconnection facilities allocable to Ridgeline ($7.6 million), working capital allowances, and accumulated depreciation through the test period. The total cost of service underlying the proposed rate is $97.36 million per year.

The cost of service was calculated using a proposed return on equity of 14.00%, which Ridgeline submits is reasonable in light of the risk profile of a newly constructed pipeline system in the Appalachian Basin and is consistent with returns authorized by the Commission for comparable pipeline projects. The proposed capital structure is 55% equity and 45% debt, with a cost of debt of 5.25%, yielding a weighted average cost of capital of 10.0625%. Billing determinants were calculated at 438,000,000 Dth per year, based on the System's design capacity of 1,200,000 Dth/d multiplied by 365 days and a 100% load factor, consistent with Commission policy for designing maximum tariff rates.

C. ATPC and Tidewater Infrastructure Partners LP

ATPC is a Pennsylvania limited liability company that owns and operates a 640-mile interstate natural gas pipeline system (the "ATPC System") serving markets in Pennsylvania, Ohio, and New York. The ATPC System is a FERC-jurisdictional natural gas pipeline with current system capacity of 3.8 Bcf/d and is one of the principal trunk pipeline systems in the Appalachian Basin. ATPC is registered with the Commission under FERC Code 840117.

ATPC is a subsidiary of Tidewater Infrastructure Partners LP, a Delaware limited partnership controlled by the Alderman family. Tidewater Infrastructure Partners LP has an estimated enterprise value of approximately $6.1 billion and controls, in addition to ATPC, various other midstream energy assets throughout the eastern United States. ATPC's principal office is located at 2200 Penn Center West, Suite 300, Pittsburgh, Pennsylvania 15276. ATPC's registered agent in Pennsylvania is Keystone Corporate Services LLC, 600 North Second Street, Harrisburg, Pennsylvania 17101.

ATPC's Chief Executive Officer is Marcus R. Alderman, and its Vice President of Regulatory Affairs is Sandra K. Fenton. In this proceeding, ATPC is represented by William Pratt, Senior Partner of Kellner, Royce & Dillard LLP, One PPG Place, Suite 2800, Pittsburgh, Pennsylvania 15222.

The physical point of interconnection proposed in the Application is at ATPC Milepost 412.6 on ATPC's existing 30-inch mainline in Wetzel County, West Virginia. At this location, gas will flow from the Ridgeline System's 24-inch pipeline through the Metering Station and into ATPC's 30-inch mainline, or, in the case of reverse flow, from ATPC's mainline through the Metering Station into the Ridgeline System. The 30-inch to 24-inch diameter differential between the two pipeline systems at the point of interconnection is a significant factor in both the Metering Station design and the cost allocation analysis, as discussed more fully below.

D. Procedural History

The procedural history of this proceeding is as follows:

• May 12, 2022: Ridgeline filed the Application in Docket Nos. RP22-847-000 and RP22-847-001, including supporting testimony, engineering drawings, and environmental reports. Calderwood & Harkness LLP opened its engagement on behalf of Ridgeline under C&H Matter No. 1016-00005.

• June 14, 2022: The Commission issued its Notice of Filing, which was published in the Federal Register on June 17, 2022. The Notice established an intervention and protest deadline of August 15, 2022.

• July 28, 2022: The Mountainside Gas Producers Coalition ("MGPC"), an unincorporated association of 14 independent natural gas producers operating in the Marcellus and Utica shale formations, filed a motion to intervene and comments. MGPC is represented by Rebekah Montague of Whitmore & Sable LLP, 1200 New Hampshire Avenue NW, Suite 600, Washington, DC 20036. In its filing, MGPC expressed general support for the proposed interconnection, which MGPC stated would enhance access to transportation capacity for its producer members, but opposed Ridgeline's proposed recourse rate as excessive relative to the risk profile of the project.

• August 1, 2022: The Clearwater Municipal Gas Authority ("Clearwater"), a Pennsylvania municipal authority that purchases natural gas transportation service on the ATPC System, filed a motion to intervene and comments. Clearwater is represented by Stephen Greer of Fordham Municipal Law Group PC, 312 Adams Avenue, Suite 100, Scranton, Pennsylvania 18503. In its filing, Clearwater expressed concern about potential rate increases on the ATPC System resulting from the allocation of interconnection costs to ATPC and stated that it supports ATPC's position on cost allocation.

• August 15, 2022: ATPC filed its Protest and motion to intervene in this proceeding. The Protest raised two primary objections: (1) the alleged inadequacy of Ridgeline's proposed Metering Station design at the Wetzel County Interconnect, and (2) a challenge to the cost allocation methodology set forth in the Application that assigns $14.7 million (65.92% of the $22.3 million total interconnection facilities cost) to ATPC.

• September 22, 2022: The Commission issued an order granting all motions to intervene, establishing a Track II procedural schedule for the hearing on contested issues, and appointing Settlement Judge Howard Margolis to conduct settlement discussions among the parties. The Track II schedule established dates for the filing of direct, answering, and rebuttal testimony, a technical conference, and an evidentiary hearing before Administrative Law Judge Clara Whitfield.

E. ATPC's Protest (Summary of Arguments Challenged)

ATPC's Protest raises two principal arguments that Ridgeline addresses in this Answer.

First, ATPC contends that the proposed Metering Station at the Wetzel County Interconnect is inadequate to ensure accurate measurement and gas quality monitoring at the interconnection point. Specifically, ATPC asserts that the three-run ultrasonic flow meter configuration specified in Ridgeline's engineering design is insufficient for bidirectional flow measurement at the proposed 800 MMcf/d design capacity of the Metering Station, that the Metering Station lacks adequate gas quality monitoring capabilities, and that SCADA integration between the two systems is insufficiently specified. ATPC argues that these alleged deficiencies could result in inaccurate measurement and custody-transfer errors that would harm ATPC and its shippers.

Second, ATPC challenges the cost allocation methodology set forth in the Application, arguing that the proposed allocation of $14.7 million (65.92%) to ATPC "improperly shifts" interconnection facilities costs to ATPC and its shippers. ATPC contends that Ridgeline is the "primary beneficiary" of the proposed interconnection and that, accordingly, Ridgeline should bear at least 50% of the total interconnection facilities cost — i.e., $11.15 million per party — rather than the $7.6 million (34.08%) proposed in the Application. ATPC argues that its proposed 50/50 allocation is more equitable and better reflects the mutual benefits of the interconnection.

As demonstrated below, both of ATPC's arguments are without merit and should be rejected.

III. ARGUMENT

A. ATPC's Challenge to the Metering Station Design Is Without Merit

ATPC's Protest devotes considerable attention to challenging the engineering design of the proposed Metering Station at the Wetzel County Interconnect. ATPC's argument rests on the premise that the proposed three-run ultrasonic flow meter configuration, combined with the gas chromatograph and SCADA systems specified in the Application, is somehow inadequate to ensure accurate measurement and gas quality monitoring at the interconnection point. This argument reflects a fundamental misunderstanding of modern ultrasonic metering technology and is directly contradicted by applicable industry standards, Commission precedent, and the engineering record in this proceeding.

1. The Proposed Metering Configuration Meets or Exceeds Industry Standards

The Metering Station design set forth in the Application is the product of a rigorous engineering analysis conducted under the supervision of Thomas Greaves, Vice President of Engineering & Operations at Ridgeline, and reviewed by qualified third-party engineering consultants. The design was developed in accordance with AGA Report No. 9, Measurement of Gas by Multipath Ultrasonic Meters (Second Revision, April 2007), which is the authoritative industry standard for custody-transfer measurement using ultrasonic flow meters at natural gas pipeline interconnection points. The design also complies with all applicable requirements of the Commission's regulations under 18 C.F.R. Part 157.

The Metering Station includes the following principal components:

• Three (3) ultrasonic flow meter runs, each consisting of a 12-inch-diameter multipath ultrasonic flow meter with bidirectional measurement capability, installed in a parallel configuration. The three-run design provides two primary measurement runs and one verification/check run, ensuring full redundancy and continuous measurement capability even when one run is taken out of service for maintenance, inspection, or calibration.

• Dual-redundant gas chromatographs for real-time compositional analysis and BTU determination, providing continuous monitoring of gas quality at the interconnection point. The gas chromatographs are configured to provide compositional analysis at sampling intervals of no more than three minutes, consistent with GPA Midstream Standard 2261, Analysis of Natural Gas and Similar Gaseous Mixtures by Gas Chromatography.

• Full SCADA integration, including real-time data transmission capabilities to both Ridgeline's and ATPC's gas control centers, ensuring that both parties have simultaneous access to flow measurement data, gas quality data, and equipment status information.

• Design capacity of 800 MMcf/d for bidirectional flow, expandable to 1.2 Bcf/d through the addition of additional meter runs to match the full design capacity of the Ridgeline Pipeline System. The initial 800 MMcf/d capacity is appropriate given the current throughput of approximately 680 MMcf/d and provides a reasonable margin for growth without requiring immediate investment in additional metering capacity.

The foregoing design is fully consistent with industry standards for custody-transfer metering at pipeline interconnection points and meets or exceeds the metering configurations employed at comparable interconnection points on pipeline systems throughout the Appalachian Basin and elsewhere. There is no basis in the engineering record for ATPC's contention that this design is "inadequate."

2. Three-Run Ultrasonic Configuration Is Adequate for Bidirectional Flow

ATPC's central technical argument is that the three-run ultrasonic flow meter configuration is "inadequate" for bidirectional service at the proposed 800 MMcf/d design capacity. This assertion is factually incorrect and technically unfounded.

The three-run configuration specified in the Application provides full redundancy for custody-transfer measurement. The design employs two primary measurement runs and one verification/check run, which is the standard configuration recommended by AGA Report No. 9 for custody-transfer applications at pipeline interconnection points. AGA Report No. 9 does not require more than two primary measurement runs for flow rates within the design capacity of the meter runs, and the addition of a third run for verification purposes exceeds the minimum standard. This configuration ensures that, at all times, at least two independent measurement paths are available for active custody-transfer measurement, even when one run is taken out of service for periodic maintenance, calibration, or inspection.

The 12-inch meter runs specified in the design are appropriately sized for the operating conditions at the Wetzel County Interconnect, including the operating pressure range of approximately 800 to 1,200 psig and the gas velocity range associated with flows up to 800 MMcf/d. At the maximum design flow rate, gas velocity through each of the two active 12-inch meter runs will be well within the operating envelope specified by the meter manufacturer and within the velocity range for which AGA Report No. 9 establishes accuracy standards. The 12-inch meter size is, in fact, the same size employed at numerous other custody-transfer metering stations on pipeline systems of comparable capacity throughout the eastern United States.

Critically, the ultrasonic flow meters specified in the Application are equipped with reversible ultrasonic transducer pairs in each run, which enable accurate flow measurement in both the forward and reverse directions without the need for physical reconfiguration of the metering equipment. This bidirectional measurement capability is a standard feature of modern multipath ultrasonic flow meters and is specifically addressed in AGA Report No. 9. The reversible transducer configuration ensures that measurement accuracy is maintained regardless of flow direction, addressing ATPC's concern about bidirectional flow measurement directly and comprehensively.

ATPC's Protest fails to identify any specific technical deficiency in the three-run configuration as applied to bidirectional flow. ATPC offers no engineering analysis demonstrating that the proposed configuration would produce inaccurate measurements, no comparison to specific industry standards that the configuration allegedly fails to meet, and no expert testimony supporting its bare assertion of inadequacy. Instead, ATPC makes a generalized claim that the configuration is "insufficient" without identifying what additional metering capability it believes is required or why. This is precisely the type of unsupported allegation that the Commission has routinely rejected. See, e.g., Crowne Albany Group, LLC, 158 FERC ¶ 61,125 (2017) (rejecting unsupported assertions regarding metering adequacy where applicant demonstrated compliance with AGA standards).

Moreover, ATPC's own metering practices undermine its argument. ATPC operates metering stations on its own 640-mile pipeline system at multiple interconnection points, and upon information and belief, several of those metering stations employ comparable or lesser redundancy than the configuration proposed by Ridgeline at the Wetzel County Interconnect. ATPC's Protest fails to explain why a standard that ATPC itself employs on its own system should be deemed inadequate when proposed by Ridgeline, or why a higher standard should apply to Ridgeline's interconnect than to ATPC's own comparable facilities.

The pig launcher/receiver facility located at Milepost 0.0, which is integrated with the Metering Station design, does not compromise measurement accuracy. The pig launcher/receiver is positioned upstream of the metering runs (in the forward-flow direction) and is equipped with appropriate piping configurations, including straight-run piping of sufficient length upstream of the meter runs, to eliminate any potential flow disturbance that could affect measurement accuracy. This configuration is consistent with the upstream piping requirements specified in AGA Report No. 9 and standard industry practice for integrating pig launching and receiving facilities with metering stations.

3. Gas Chromatograph and SCADA Integration Are Comprehensive

ATPC's Protest raises generalized concerns about gas quality monitoring and SCADA integration at the Wetzel County Interconnect. These concerns are addressed directly by the Metering Station design as specified in the Application.

The proposed gas chromatographs will provide continuous compositional analysis at sampling intervals of no more than three minutes, consistent with GPA Midstream Standard 2261. This standard establishes the methodology for the analysis of natural gas and similar gaseous mixtures by gas chromatography and is the industry-accepted standard for gas quality determination at custody-transfer points on natural gas pipeline systems. The three-minute sampling interval ensures that compositional changes in the gas stream — including variations in heating value, specific gravity, and concentrations of non-hydrocarbon components such as carbon dioxide, nitrogen, and hydrogen sulfide — are detected and recorded in near real-time.

The dual-redundant gas chromatograph configuration provides an additional layer of reliability. With two independent gas chromatographs operating simultaneously, the Metering Station will maintain continuous compositional monitoring even during instrument maintenance, calibration, or in the event of an instrument malfunction. The redundant configuration eliminates any gap in gas quality data that could otherwise occur during routine maintenance or unexpected equipment failures. This dual-redundant approach exceeds the minimum requirements of GPA Midstream Standard 2261 and represents best-in-class practice for gas quality monitoring at custody-transfer interconnection points.

SCADA integration at the Metering Station is designed to provide real-time data transmission to both Ridgeline's gas control center in Charleston, West Virginia, and ATPC's gas control center in Pittsburgh, Pennsylvania. The SCADA system will transmit flow measurement data, gas quality data, equipment status information, and alarm notifications to both parties simultaneously, enabling coordinated monitoring and operational response. The data transmission will occur via redundant communication pathways — including both fiber-optic and satellite-based communication links — to ensure continuous data availability. The SCADA system will interface with both Ridgeline's and ATPC's existing gas management systems through industry-standard communication protocols, including Modbus, DNP3, and OPC-DA/UA, as appropriate.

ATPC's Protest does not identify any specific deficiency in the proposed SCADA integration or gas quality monitoring systems. ATPC's generalized assertion that the SCADA integration is "insufficiently specified" ignores the detailed SCADA system design documents included in Exhibit F to the Application, which provide comprehensive specifications for all data points, communication protocols, polling intervals, and alarm setpoints. The SCADA design documents were prepared in consultation with both Ridgeline's and ATPC's respective SCADA vendors to ensure interoperability, and ATPC's own engineers participated in preliminary design discussions prior to filing.

B. The Proposed Cost Allocation Methodology Is Consistent with Cost-Causation Principles and Commission Precedent

ATPC's second principal argument challenges the cost allocation methodology set forth in the Application, which proposes to allocate $7.6 million (34.08%) of the total $22.3 million interconnection facilities cost to Ridgeline and $14.7 million (65.92%) to ATPC. ATPC contends that this allocation "improperly shifts" costs to ATPC and its shippers and proposes instead a 50/50 split of the total cost, allocating $11.15 million to each party. For the reasons set forth below, Ridgeline's proposed cost allocation is fully consistent with cost-causation principles and Commission precedent, while ATPC's proposed 50/50 split is arbitrary, unsupported by cost-causation analysis, and should be rejected.

1. The Total Interconnection Facilities Cost

The total estimated cost of the interconnection facilities at the Wetzel County Interconnect is $22.3 million. This figure encompasses all facilities required to establish a physical interconnection between Ridgeline's 24-inch pipeline system and ATPC's 30-inch mainline at Milepost 412.6 on the ATPC System. The estimate was prepared by Ridgepoint Appraisal & Valuation Inc. ("Ridgepoint"), an independent engineering and cost estimation firm, and reflects current engineering estimates as of the time of filing.

The $22.3 million total includes the following principal components:

• The Metering Station proper, including the three-run ultrasonic flow meter installation, meter tubes, flow conditioners, isolation valves, pressure and temperature transmitters, gas chromatographs, sample conditioning systems, meter building, and electrical and instrumentation systems;

• The pig launcher and pig receiver facilities at the interconnection point;

• Connecting piping between the Ridgeline system and the ATPC system, including transition piping from 24-inch to 30-inch diameter;

• Mainline valves, block valves, and bypass piping;

• Cathodic protection systems for all buried piping and equipment;

• Site preparation, grading, drainage, and erosion control;

• Security fencing, access roads, lighting, and site facilities;

• Modifications to ATPC's existing 30-inch mainline at Milepost 412.6, including hot tap, valve installation, and pressure regulation equipment; and

• All associated construction, engineering, project management, inspection, and testing costs.

The Ridgepoint estimate was prepared on a component-by-component basis, identifying the specific facilities on each side of the interconnection point, and forms the basis for the cost allocation methodology set forth in the Application.

2. Ridgeline's Proposed Allocation: 34.1% / 65.9%

Ridgeline proposes to bear $7.6 million (34.08%) of the total interconnection facilities cost and to allocate $14.7 million (65.92%) to ATPC. This allocation is not arbitrary; it is based on a detailed, facility-by-facility cost-causation analysis that identifies which interconnection facilities are required due to the physical characteristics, system configuration, measurement specifications, and operational requirements of each party's respective pipeline system.

Facilities on the Ridgeline side of the interconnect — including receipt-point piping between the Ridgeline mainline and the metering station, Ridgeline's SCADA interface equipment, the pig launcher, and associated Ridgeline-side site work — total approximately $7.6 million. These facilities are required to connect the Ridgeline system to the interconnection point and to support Ridgeline's operational requirements at the receipt point. They will be owned, operated, and maintained by Ridgeline, and the costs thereof are properly allocable to Ridgeline.

Facilities on the ATPC side of the interconnect — including the Metering Station proper (which must conform to ATPC's own measurement specifications for the receipt of gas into the ATPC System), ATPC-side connecting piping, transition piping from 24-inch to 30-inch diameter, modifications to ATPC's existing 30-inch mainline at Milepost 412.6 (including the hot tap, valve installation, and pressure regulation equipment), the pig receiver, ATPC's SCADA interface equipment, and associated ATPC-side site work — total approximately $14.7 million. These facilities are required due to the physical characteristics and operational requirements of ATPC's existing system and must be constructed to ATPC's specifications. They will be owned, operated, and maintained by ATPC, and the costs thereof are properly allocable to ATPC.

The cost allocation thus reflects a straightforward application of cost-causation principles: each party bears the cost of those interconnection facilities that are necessitated by its own system requirements and that it will own, operate, and maintain. The allocation does not require either party to pay for facilities owned or controlled by the other party, and it does not impose on either party costs driven by the other party's system configuration or operational requirements.

3. FERC Precedent Supports Cost-Causation-Based Allocation

The Commission has long recognized that interconnection costs should be allocated based on cost causation — the fundamental regulatory principle that the party whose system requirements necessitate particular facilities should bear the cost of those facilities. This principle has been articulated and applied in numerous Commission orders addressing interconnection cost allocation under NGA Section 7 and 18 C.F.R. Part 157.

FERC Order No. 2004, Standards of Conduct for Transmission Providers, and its progeny establish a framework for analyzing interconnection costs that is rooted in the cost-causation principle. While Order No. 2004 addressed standards of conduct more broadly, the Commission's interconnection cost allocation jurisprudence under NGA Section 7 consistently applies cost-causation principles to determine the appropriate allocation of interconnection facilities costs between interconnecting pipeline systems. See, e.g., Crowne Albany Group, LLC, 163 FERC ¶ 61,148 (2018) (applying cost-causation analysis to allocate interconnection costs based on which party's system requirements drove the need for specific facilities); Larkspur Holdings, 149 FERC ¶ 61,210 (2014) (approving asymmetric cost allocation where cost-causation analysis demonstrated that the majority of interconnection facilities were necessitated by the requirements of the existing pipeline system); Tennessee Gas Pipeline Co., L.L.C., 154 FERC ¶ 61,098 (2016) (rejecting mechanical 50/50 cost allocation where detailed engineering analysis supported an asymmetric allocation consistent with cost causation).

The Commission has consistently rejected mechanical 50/50 splits where a cost-causation analysis demonstrates that an asymmetric allocation is appropriate. In Larkspur Holdings, 149 FERC ¶ 61,210, the Commission approved an interconnection cost allocation of approximately 40/60 where the existing pipeline system's requirements — including modifications to the existing mainline, transition piping to accommodate different pipeline diameters, and metering specifications mandated by the existing system operator — drove a disproportionate share of the interconnection facilities costs. The Commission observed that "[a] blanket 50/50 split of interconnection costs, without regard to the actual cost drivers, would contravene the cost-causation principle and result in an unjust and unreasonable allocation." Id. at P 47.

ATPC's insistence on a 50/50 split — allocating $11.15 million to each party — disregards the detailed cost-causation analysis set forth in the Application and ignores the fact that a disproportionate share of the interconnection facilities, particularly the Metering Station and ATPC-side modifications, are necessitated by ATPC's system configuration, measurement specifications, and operational requirements. Several specific cost drivers warrant emphasis:

• The 30-inch to 24-inch diameter differential between ATPC's mainline and Ridgeline's pipeline requires specific transition facilities — including reducers, transition piping, and associated structural supports — on the ATPC side of the interconnect. These transition facilities are necessitated by the physical characteristics of ATPC's existing 30-inch mainline and are properly allocable to ATPC.

• ATPC's existing mainline at Milepost 412.6 requires modifications, including a hot tap to create the physical connection to ATPC's pressurized mainline, the installation of mainline block valves and bypass piping, and the installation of pressure regulation equipment to manage the pressure differential between the two systems. These modifications are necessitated by ATPC's existing system configuration and are properly charged to ATPC as the operator of the existing system that must be modified to accommodate the interconnection.

• The Metering Station must be constructed to conform to ATPC's measurement specifications for the receipt of gas into the ATPC System. ATPC's measurement specifications, which are more stringent in certain respects than industry minimum standards, drive specific design requirements that increase the cost of the Metering Station. Because these incremental costs are driven by ATPC's own specifications, they are properly allocable to ATPC.

4. ATPC's 50/50 Proposal Improperly Shifts Costs to Ridgeline

ATPC's proposed 50/50 allocation would require Ridgeline to bear $11.15 million — an increase of $3.55 million over the cost-causation-based allocation proposed in the Application — for facilities that Ridgeline will neither own nor operate. This outcome would require Ridgeline to subsidize the cost of modifications to ATPC's own system and facilities that will be constructed to ATPC's specifications, owned by ATPC, and operated and maintained by ATPC for the benefit of ATPC and its shippers.

This subsidy would ultimately be borne by Ridgeline's own shippers through the inclusion of the additional $3.55 million in Ridgeline's rate base. The resulting increase in Ridgeline's cost of service would be reflected in higher transportation rates charged to shippers on the Ridgeline system, effectively transferring the burden of ATPC's system modifications to parties that derive no benefit from those modifications and that have no control over the design specifications that drive the associated costs. Such an outcome is precisely the type of cross-subsidization that the Commission's cost-causation principles are designed to prevent.

Moreover, ATPC's 50/50 proposal would set an adverse precedent for future interconnection proceedings before the Commission. If the Commission were to adopt a mechanical 50/50 allocation in circumstances where a cost-causation analysis clearly supports an asymmetric allocation, pipeline companies seeking interconnection could be deterred from proposing efficient interconnection designs — knowing that any disproportionate cost arising from the other party's system configuration would be shared equally regardless of cost causation. Such a result would be antithetical to the Commission's longstanding policy of promoting efficient and cost-effective pipeline interconnections.

5. ATPC's Argument That Ridgeline Is the "Primary Beneficiary" Is Misplaced

ATPC argues that Ridgeline is the "primary beneficiary" of the proposed interconnection and that this perceived benefit justifies requiring Ridgeline to bear a greater share of the interconnection costs. This argument fundamentally confuses the concept of benefit with the concept of cost causation, and the Commission has repeatedly declined to substitute a "benefit" analysis for a cost-causation analysis in determining the allocation of interconnection costs.

The interconnection will, in fact, benefit both parties substantially. Ridgeline gains access to ATPC's 3.8 Bcf/d interstate pipeline system, which serves markets in Pennsylvania, Ohio, and New York, providing Ridgeline's shippers with access to a broader range of downstream delivery points and market centers. For its part, ATPC gains access to incremental natural gas supply from the prolific Marcellus and Utica shale formations delivered through the Ridgeline system, enhancing supply diversity on the ATPC System and providing ATPC's shippers with access to competitively priced natural gas from new production areas.

ATPC's own shippers will benefit directly from the interconnection. Access to incremental supply from the Marcellus and Utica shale formations through the Ridgeline system will enhance supply reliability on the ATPC System and may reduce delivered natural gas costs for ATPC's shippers by increasing the number of supply sources available to the ATPC System. The Mountainside Gas Producers Coalition, representing 14 independent natural gas producers operating in the Marcellus and Utica formations, has intervened in this proceeding in support of the interconnection, further demonstrating that the benefits of the interconnection extend beyond Ridgeline to producers, shippers, and consumers who will be served by the interconnected pipeline systems.

The Commission has consistently held that mutual benefit does not alter the cost-causation analysis. In Tennessee Gas Pipeline Co., L.L.C., 154 FERC ¶ 61,098 (2016), the Commission stated that "[t]he fact that both parties may benefit from an interconnection does not justify departing from cost-causation principles in allocating the costs of interconnection facilities. The relevant inquiry is which party's system requirements generate the costs, not which party derives the greater net benefit from the interconnection." Id. at P 52. The Commission's holding in Tennessee Gas Pipeline is directly applicable here and compels rejection of ATPC's "primary beneficiary" argument.

In sum, even if ATPC were correct that Ridgeline derives greater benefit from the interconnection — a proposition that Ridgeline does not concede — that would not justify departing from cost-causation principles in allocating interconnection costs. Costs should be allocated based on which party's system requirements generate the costs, and the Application's facility-by-facility cost-causation analysis demonstrates that $14.7 million of the $22.3 million total is driven by ATPC's system configuration, specifications, and operational requirements.

C. ATPC's Protest Should Not Delay the Proceeding

While Ridgeline submits that ATPC's Protest is without merit and should be denied, Ridgeline recognizes that ATPC's arguments raise factual and technical issues that are appropriate for resolution through the established Track II hearing procedure. The Commission's September 22, 2022 order established a comprehensive procedural schedule, including deadlines for the submission of direct, answering, and rebuttal testimony, a technical conference, and an evidentiary hearing before Administrative Law Judge Clara Whitfield. This procedural framework provides an adequate and appropriate forum for the resolution of the metering station design and cost allocation issues raised in ATPC's Protest.

Ridgeline is fully prepared to present detailed engineering and economic testimony in support of both the Metering Station design and the cost allocation methodology. Thomas Greaves, Vice President of Engineering & Operations at Ridgeline, will provide engineering testimony regarding the Metering Station design, including the adequacy of the three-run ultrasonic flow meter configuration, the gas chromatograph installation, and the SCADA integration design. Angela Moretti, Vice President of Finance & Treasurer at Ridgeline, will present the cost allocation analysis, including the facility-by-facility cost-causation methodology, the Ridgepoint cost estimate, and the economic justification for the proposed 34.08%/65.92% allocation.

Ridgeline respectfully submits that ATPC's Protest should not serve as a basis for delaying the original target in-service date for the interconnection facilities, which is Q4 2023, or the procedural schedule established in the Commission's September 22, 2022 order. Any delay in the resolution of this proceeding would postpone the benefits of the interconnection for producers, shippers, and consumers served by both pipeline systems and would increase the cost of the interconnection facilities due to construction cost escalation. Ridgeline urges the Commission to proceed expeditiously with the Track II hearing schedule and to resolve the contested issues in a timely manner.

IV. RESPONSE TO ATPC'S SPECIFIC ALLEGATIONS

In addition to the arguments addressed above, Ridgeline responds below to each specific allegation set forth in ATPC's Protest, providing a point-by-point rebuttal of ATPC's technical and economic claims.

A. ATPC Allegation: Metering Station Design Is "Inadequate"

ATPC's Protest alleges that the proposed Metering Station design at the Wetzel County Interconnect is "inadequate" to ensure accurate measurement and gas quality monitoring. ATPC raises four specific allegations of inadequacy, each of which is rebutted as follows:

Allegation 1: Insufficient Meter Runs. ATPC alleges that the three-run ultrasonic flow meter configuration does not provide sufficient measurement capacity for the proposed 800 MMcf/d design flow rate at the interconnection point.

Response: This allegation is without merit. As discussed in Section III.A.2 above, the three-run configuration — consisting of two primary measurement runs and one verification/check run — provides full redundancy for custody-transfer measurement at flow rates up to 800 MMcf/d and is consistent with the requirements of AGA Report No. 9. The 12-inch meter runs are appropriately sized for the operating pressure and velocity range at the Wetzel County Interconnect, and the two active measurement runs provide more than adequate capacity for the 800 MMcf/d design flow rate. ATPC has identified no specific technical basis for concluding that three runs are insufficient and has offered no engineering analysis demonstrating that additional meter runs are required.

Allegation 2: Lack of Bidirectional Measurement Capability. ATPC alleges that the proposed metering configuration lacks adequate bidirectional measurement capability and cannot accurately measure gas flowing in both the forward and reverse directions.

Response: This allegation is factually incorrect. As discussed in Section III.A.2 above, each of the three ultrasonic flow meter runs is equipped with reversible ultrasonic transducer pairs that enable accurate flow measurement in both directions without physical reconfiguration. Bidirectional measurement is a standard feature of modern multipath ultrasonic flow meters and is specifically addressed in AGA Report No. 9. ATPC's allegation ignores the reversible transducer capability of the proposed meters and is contradicted by the engineering specifications included in Exhibit D to the Application, which clearly describe the bidirectional measurement capability of the proposed installation.

Allegation 3: Inadequate Gas Quality Monitoring. ATPC alleges that the proposed gas quality monitoring system at the Metering Station is inadequate to ensure accurate determination of gas composition and heating value.

Response: This allegation is without merit. As discussed in Section III.A.3 above, the Metering Station design includes dual-redundant gas chromatographs that provide continuous compositional analysis at sampling intervals of no more than three minutes, consistent with GPA Midstream Standard 2261. The dual-redundant configuration ensures continuous gas quality monitoring even during instrument maintenance, calibration, or malfunction. ATPC has not identified any specific deficiency in the gas chromatograph configuration or sampling interval, and its generalized allegation of inadequacy is unsupported by any technical analysis or expert testimony.

Allegation 4: Insufficient SCADA Integration. ATPC alleges that the proposed SCADA integration between Ridgeline's and ATPC's systems is "insufficiently specified" and may not provide adequate real-time data sharing between the two parties' gas control centers.

Response: This allegation is contradicted by the detailed SCADA system design documents included in Exhibit F to the Application. As discussed in Section III.A.3 above, the proposed SCADA system is designed to provide real-time data transmission to both Ridgeline's and ATPC's gas control centers via redundant communication pathways, using industry-standard communication protocols. The SCADA design documents identify all data points to be transmitted, communication protocols, polling intervals, and alarm setpoints. ATPC's own engineers participated in preliminary design discussions regarding SCADA integration prior to the filing of the Application, and at no point during those discussions did ATPC raise concerns about the level of specification in the SCADA design.

B. ATPC Allegation: Cost Allocation "Improperly Shifts" $14.7 Million to ATPC Shippers

ATPC's Protest characterizes the proposed cost allocation as an improper "shift" of $14.7 million in interconnection facilities costs to ATPC and its shippers. This characterization is misleading and should be rejected.

The $14.7 million allocated to ATPC under the Application represents the estimated cost of interconnection facilities that will be owned, operated, and maintained by ATPC and that are necessitated by ATPC's own system configuration, measurement specifications, and operational requirements. These facilities include modifications to ATPC's existing 30-inch mainline, ATPC-side piping and transition facilities, the Metering Station (which must conform to ATPC's measurement specifications), the pig receiver, and ATPC's SCADA interface equipment. Allocating the cost of these ATPC-owned and ATPC-operated facilities to ATPC is not a "shift" of costs; it is a straightforward application of cost-causation principles.

ATPC's argument that its shippers will bear these costs ignores the fundamental distinction between the allocation of interconnection costs between the interconnecting parties and the recovery of those costs from shippers. Ridgeline's proposed allocation addresses only the first issue — how the $22.3 million total cost should be divided between Ridgeline and ATPC. The Application does not prescribe how ATPC should recover its $14.7 million share of interconnection costs from its own shippers. That is a matter entirely within ATPC's control and would be addressed in ATPC's own tariff filings before the Commission. ATPC may propose to recover its interconnection costs through a surcharge, through inclusion in rate base in a future general rate case, or through any other mechanism permitted by the Commission's regulations and ATPC's existing tariff. The method of cost recovery from ATPC's shippers is ATPC's decision and is not at issue in this proceeding.

The Clearwater Municipal Gas Authority's expression of support for ATPC's position on cost allocation reflects Clearwater's concern about potential rate increases on the ATPC System that could result from ATPC's recovery of its share of interconnection costs. While Ridgeline understands Clearwater's concern, that concern is properly addressed in ATPC's own rate proceedings, not in this docket. The question before the Commission in this proceeding is whether the cost allocation between Ridgeline and ATPC is consistent with cost-causation principles — and, for the reasons set forth above, it plainly is. The downstream rate impact on ATPC's shippers is a function of ATPC's chosen method of cost recovery and the overall cost of service on the ATPC System, neither of which is determined by this proceeding.

V. REQUEST FOR RELIEF

WHEREFORE, for the reasons set forth herein, Ridgeline Midstream Services LLC respectfully requests that the Commission:

1. Deny ATPC's Protest in its entirety, including both ATPC's challenge to the Metering Station design and ATPC's challenge to the proposed cost allocation methodology;

2. Affirm the adequacy of the proposed metering station design at the Wetzel County Interconnect, including the three-run ultrasonic flow meter configuration, the dual-redundant gas chromatograph installation, and the SCADA integration design, as meeting or exceeding applicable industry standards and Commission requirements;

3. Affirm the proposed cost allocation of $7.6 million to Ridgeline (34.08%) and $14.7 million to ATPC (65.92%) for the $22.3 million total interconnection facilities cost, as consistent with cost-causation principles and Commission precedent;

4. Proceed with the Track II hearing schedule as established in the Commission's September 22, 2022 order, without delay; and

5. Grant such other and further relief as the Commission deems just, reasonable, and appropriate.

VI. CONCLUSION

For the foregoing reasons, ATPC's Protest is without merit on both counts and should be denied.

The Metering Station design at the Wetzel County Interconnect meets or exceeds applicable industry standards, including AGA Report No. 9 and GPA Midstream Standard 2261, and is fully adequate for bidirectional flow measurement at the proposed 800 MMcf/d design capacity, with expansion capability to 1.2 Bcf/d. The three-run ultrasonic flow meter configuration provides full redundancy for custody-transfer measurement, the dual-redundant gas chromatographs ensure continuous gas quality monitoring, and the SCADA integration design provides real-time data sharing between Ridgeline's and ATPC's gas control centers. ATPC's allegations of inadequacy are unsupported by the technical record and reflect a fundamental misunderstanding of modern ultrasonic metering technology.

The cost allocation methodology set forth in the Application is consistent with the Commission's well-established cost-causation principles, as articulated in FERC Order No. 2004 and its progeny, and with precedent from analogous interconnection proceedings under NGA Section 7 and 18 C.F.R. Part 157. The proposed allocation of $7.6 million (34.08%) to Ridgeline and $14.7 million (65.92%) to ATPC reflects a detailed, facility-by-facility cost-causation analysis that assigns costs to the party whose system requirements necessitate each component of the interconnection facilities. ATPC's proposed 50/50 split is arbitrary, contravenes cost-causation principles, and would improperly subsidize ATPC's system modifications at the expense of Ridgeline and its shippers.

Ridgeline is prepared to support its Application through the evidentiary hearing process established by the Commission's September 22, 2022 order and looks forward to a prompt resolution of this proceeding. Ridgeline respectfully urges the Commission to deny ATPC's Protest and to proceed with the Track II hearing schedule without delay.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

George Trujillo Responsible Partner, Energy & Infrastructure

Brett Callahan Lead Associate, Energy & Infrastructure

David Stanton Working Associate, Energy & Infrastructure

1601 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-4100 Facsimile: (202) 555-4101

Email: gtrujillo@calderwoodharkness.com

Counsel for Ridgeline Midstream Services LLC

Dated: October 17, 2022

CERTIFICATE OF SERVICE

I hereby certify that, on this 17th day of October, 2022, a copy of the foregoing Answer of Ridgeline Midstream Services LLC to the Protest of Appalachian Trunk Pipeline Company, LLC was served upon all parties on the official service list maintained by the Secretary of the Federal Energy Regulatory Commission in Docket Nos. RP22-847-000 and RP22-847-001, by electronic mail and first-class United States mail, postage prepaid, addressed to the following:

Appalachian Trunk Pipeline Company, LLC c/o William Pratt, Senior Partner Kellner, Royce & Dillard LLP One PPG Place, Suite 2800 Pittsburgh, PA 15222

Email: wpratt@kellnerroyce.com

Mountainside Gas Producers Coalition c/o Rebekah Montague Whitmore & Sable LLP 1200 New Hampshire Avenue NW, Suite 600 Washington, DC 20036

Email: rmontague@whitmoresable.com

Clearwater Municipal Gas Authority c/o Stephen Greer Fordham Municipal Law Group PC 312 Adams Avenue, Suite 100 Scranton, PA 18503

Email: sgreer@fordhamlaw.com

FERC Trial Staff c/o Jonathan Briggs Office of the General Counsel Federal Energy Regulatory Commission 888 First Street NE Washington, DC 20426

Email: jonathan.briggs@ferc.gov

Secretary of the Federal Energy Regulatory Commission 888 First Street NE Washington, DC 20426

________________________________________

David Stanton Calderwood & Harkness LLP

Dated: October 17, 2022

APPENDIX A TABLE OF AUTHORITIES

Statutes

Federal Regulations

FERC Orders

FERC Case Law

Industry Standards

Authority	Citation
Natural Gas Act § 4	15 U.S.C. § 717c
Natural Gas Act § 5	15 U.S.C. § 717d
Natural Gas Act § 7	15 U.S.C. § 717f
Authority	Citation
Rules of Practice and Procedure — Answers	18 C.F.R. § 385.213
Rates and Charges — Natural Gas Companies	18 C.F.R. Part 154
Applications for Certificates of Public Convenience and Necessity	18 C.F.R. Part 157
Certain Natural Gas Sales and Transportation	18 C.F.R. Part 284
Authority	Citation
FERC Order No. 2004, Standards of Conduct for Transmission Providers	68 Fed. Reg. 69,134 (Dec. 11, 2003); FERC Stats. & Regs. ¶ 31,155 (2003)
Authority	Citation
Crowne Albany Group, LLC	158 FERC ¶ 61,125 (2017)
Crowne Albany Group, LLC	163 FERC ¶ 61,148 (2018)
Larkspur Holdings	149 FERC ¶ 61,210 (2014)
Tennessee Gas Pipeline Co., L.L.C.	154 FERC ¶ 61,098 (2016)
Authority	Description
AGA Report No. 9 (Second Revision, April 2007)	Measurement of Gas by Multipath Ultrasonic Meters — American Gas Association
GPA Midstream Standard 2261	Analysis of Natural Gas and Similar Gaseous Mixtures by Gas Chromatography — GPA Midstream Association

UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION
Ridgeline Midstream Services LLC
Docket No. RP22-847-001
ANSWER OF RIDGELINE MIDSTREAM SERVICES LLC TO THE PROTEST OF APPALACHIAN TRUNK PIPELINE COMPANY, LLC
Filed: October 17, 2022
George Trujillo, Responsible Partner Brett Callahan, Lead Associate David Stanton, Working Associate
CALDERWOOD & HARKNESS LLP 1601 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-4100 Facsimile: (202) 555-4101
Email: gtrujillo@calderwoodharkness.com
On behalf of Ridgeline Midstream Services LLC 700 Kanawha Boulevard East, Suite 1400 Charleston, WV 25301
Right-click to update Table of Contents
I. PRELIMINARY STATEMENT
Ridgeline Midstream Services LLC ("Ridgeline" or "Applicant"), a Delaware limited liability company and wholly owned subsidiary of Dunmore Energy Holdings Ltd. ("DEH"), a Cayman Islands exempted limited company, hereby submits this Answer to the Protest filed by Appalachian Trunk Pipeline Company, LLC ("ATPC") on August 15, 2022 (the "Protest"). This Answer is filed pursuant to Rule 213 of the Commission's Rules of Practice and Procedure, 18 C.F.R. § 385.213, and in accordance with the procedural schedule established by the Commission in its September 22, 2022 order in this proceeding.
ATPC's Protest challenges two discrete aspects of Ridgeline's Application filed on May 12, 2022 (the "Application"): (1) the design of the proposed receipt-point metering station at the Wetzel County Interconnect (the "Metering Station"), and (2) the allocation of $14.7 million in interconnection facilities costs proposed to be borne by ATPC pursuant to the cost-causation methodology set forth in the Application. For the reasons set forth below, Ridgeline respectfully submits that ATPC's arguments on both counts are without merit and should be rejected by the Commission.
The Application was filed on May 12, 2022, pursuant to Sections 4 and 7 of the Natural Gas Act ("NGA"), 15 U.S.C. §§ 717c, 717f, and 18 C.F.R. Parts 154, 157, and 284, seeking authorization for the construction and operation of interconnection facilities at the Wetzel County Interconnect and approval of initial tariff rates for open-access transportation service on the Ridgeline Pipeline System. On June 14, 2022, the Commission issued a Notice of Filing establishing an intervention and protest deadline of August 15, 2022. ATPC timely filed its Protest on that date.
The proposed interconnection is located at Milepost 0.0 of the Ridgeline Pipeline System, at which point the Ridgeline system ties into ATPC's existing 30-inch-diameter mainline at ATPC Milepost 412.6, in Wetzel County, West Virginia. The Wetzel County Interconnect is the sole receipt point on the Ridgeline Pipeline System and represents the critical physical link between the two pipeline systems that will enable the transportation of natural gas from the prolific Marcellus and Utica shale production areas to downstream markets served by both Ridgeline and ATPC.
As this Answer demonstrates in detail, the Metering Station design is fully adequate under applicable industry standards — including AGA Report No. 9 and GPA Midstream Standard 2261 — and is consistent with Commission precedent governing metering and measurement at pipeline interconnection points. The three-run ultrasonic flow meter configuration provides full redundancy for bidirectional flow measurement, and the dual-redundant gas chromatograph installation ensures continuous, accurate gas quality monitoring. ATPC's assertions to the contrary are unsupported by the technical record and reflect a fundamental misunderstanding of modern ultrasonic metering technology and its application at custody-transfer interconnection points.
Similarly, the cost allocation methodology set forth in the Application is consistent with well-established cost-causation principles and Commission precedent, including FERC Order No. 2004 and its progeny. The proposed allocation of $7.6 million to Ridgeline (34.08%) and $14.7 million to ATPC (65.92%) of the $22.3 million total interconnection facilities cost reflects a detailed, facility-by-facility analysis that assigns costs to the party whose system requirements necessitate each component of the interconnection. ATPC's insistence on an arbitrary 50/50 cost split — which would require Ridgeline to subsidize $3.55 million in facilities that Ridgeline will neither own nor operate — contravenes cost-causation principles and should be rejected.
II. BACKGROUND
A. The Ridgeline Pipeline System
Ridgeline owns and operates the Ridgeline Pipeline System (the "System"), a 187-mile, 24-inch-diameter high-pressure natural gas pipeline extending from a receipt point at the Wetzel County Interconnect in Wetzel County, West Virginia (approximate coordinates 39.6120° N, 80.7540° W) to a delivery point at the Waynesburg Compressor Station in Greene County, Pennsylvania (approximate coordinates 39.8965° N, 80.1810° W). The System was placed in service on October 1, 2021, and its original construction cost was $587.2 million.
The System has a design capacity of 1.2 Bcf/d (1,200,000 Dth/d at an assumed BTU content of 1,000 BTU/cf), making it one of the significant gathering and transmission systems serving the Appalachian Basin. Current throughput on the System is approximately 680 MMcf/d, representing approximately 56.67% utilization of the System's design capacity. This throughput level reflects the phased development of production in the upstream areas served by the System and is expected to increase as additional shippers contract for capacity on the System and as the proposed interconnection with ATPC's system becomes operational.
The System is supported by three compressor stations: the Wetzel Station (located near the Wetzel County Interconnect at approximately Milepost 2.0), the Mannington Station (located at approximately Milepost 87.0 in Marion County, West Virginia), and the Waynesburg Station (located at the System's delivery point at approximately Milepost 187.0 in Greene County, Pennsylvania). These three stations provide aggregate installed compression of 45,000 horsepower, consisting of a combination of natural gas-fired turbine-driven centrifugal compressors and electric motor-driven reciprocating compressors. The compression configuration provides sufficient flexibility to accommodate variable throughput conditions and to support bidirectional flow operations at the Wetzel County Interconnect when required by market conditions.
Ridgeline is registered with the Commission under FERC Code 960442 and holds a blanket certificate under NGA Section 7(c) for the construction, acquisition, and operation of certain natural gas pipeline facilities.
B. Ridgeline's Application
On May 12, 2022, Ridgeline filed its Application under Docket Nos. RP22-847-000 (rate case) and RP22-847-001 (interconnection), seeking approval of an initial tariff rate for interstate transportation service under FERC Gas Tariff, Original Volume No. 1, Part 284, Subpart G open-access transportation, and authorization for the construction and operation of physical interconnection facilities with ATPC at the Wetzel County Interconnect. The Application was accompanied by detailed engineering drawings, cost estimates, environmental reports, and supporting testimony by Ridgeline officers and outside experts.
The proposed initial recourse rate under the Application is $0.2265 per Dth, consisting of a reservation charge component of $0.2223 per Dth and a usage charge component of $0.0042 per Dth. This rate was derived from a cost-of-service study based on a rate base of $612.40 million, which includes the original construction cost of $587.2 million, the net investment in interconnection facilities allocable to Ridgeline ($7.6 million), working capital allowances, and accumulated depreciation through the test period. The total cost of service underlying the proposed rate is $97.36 million per year.
The cost of service was calculated using a proposed return on equity of 14.00%, which Ridgeline submits is reasonable in light of the risk profile of a newly constructed pipeline system in the Appalachian Basin and is consistent with returns authorized by the Commission for comparable pipeline projects. The proposed capital structure is 55% equity and 45% debt, with a cost of debt of 5.25%, yielding a weighted average cost of capital of 10.0625%. Billing determinants were calculated at 438,000,000 Dth per year, based on the System's design capacity of 1,200,000 Dth/d multiplied by 365 days and a 100% load factor, consistent with Commission policy for designing maximum tariff rates.
C. ATPC and Tidewater Infrastructure Partners LP
ATPC is a Pennsylvania limited liability company that owns and operates a 640-mile interstate natural gas pipeline system (the "ATPC System") serving markets in Pennsylvania, Ohio, and New York. The ATPC System is a FERC-jurisdictional natural gas pipeline with current system capacity of 3.8 Bcf/d and is one of the principal trunk pipeline systems in the Appalachian Basin. ATPC is registered with the Commission under FERC Code 840117.
ATPC is a subsidiary of Tidewater Infrastructure Partners LP, a Delaware limited partnership controlled by the Alderman family. Tidewater Infrastructure Partners LP has an estimated enterprise value of approximately $6.1 billion and controls, in addition to ATPC, various other midstream energy assets throughout the eastern United States. ATPC's principal office is located at 2200 Penn Center West, Suite 300, Pittsburgh, Pennsylvania 15276. ATPC's registered agent in Pennsylvania is Keystone Corporate Services LLC, 600 North Second Street, Harrisburg, Pennsylvania 17101.
ATPC's Chief Executive Officer is Marcus R. Alderman, and its Vice President of Regulatory Affairs is Sandra K. Fenton. In this proceeding, ATPC is represented by William Pratt, Senior Partner of Kellner, Royce & Dillard LLP, One PPG Place, Suite 2800, Pittsburgh, Pennsylvania 15222.
The physical point of interconnection proposed in the Application is at ATPC Milepost 412.6 on ATPC's existing 30-inch mainline in Wetzel County, West Virginia. At this location, gas will flow from the Ridgeline System's 24-inch pipeline through the Metering Station and into ATPC's 30-inch mainline, or, in the case of reverse flow, from ATPC's mainline through the Metering Station into the Ridgeline System. The 30-inch to 24-inch diameter differential between the two pipeline systems at the point of interconnection is a significant factor in both the Metering Station design and the cost allocation analysis, as discussed more fully below.
D. Procedural History
The procedural history of this proceeding is as follows:
• May 12, 2022: Ridgeline filed the Application in Docket Nos. RP22-847-000 and RP22-847-001, including supporting testimony, engineering drawings, and environmental reports. Calderwood & Harkness LLP opened its engagement on behalf of Ridgeline under C&H Matter No. 1016-00005.
• June 14, 2022: The Commission issued its Notice of Filing, which was published in the Federal Register on June 17, 2022. The Notice established an intervention and protest deadline of August 15, 2022.
• July 28, 2022: The Mountainside Gas Producers Coalition ("MGPC"), an unincorporated association of 14 independent natural gas producers operating in the Marcellus and Utica shale formations, filed a motion to intervene and comments. MGPC is represented by Rebekah Montague of Whitmore & Sable LLP, 1200 New Hampshire Avenue NW, Suite 600, Washington, DC 20036. In its filing, MGPC expressed general support for the proposed interconnection, which MGPC stated would enhance access to transportation capacity for its producer members, but opposed Ridgeline's proposed recourse rate as excessive relative to the risk profile of the project.
• August 1, 2022: The Clearwater Municipal Gas Authority ("Clearwater"), a Pennsylvania municipal authority that purchases natural gas transportation service on the ATPC System, filed a motion to intervene and comments. Clearwater is represented by Stephen Greer of Fordham Municipal Law Group PC, 312 Adams Avenue, Suite 100, Scranton, Pennsylvania 18503. In its filing, Clearwater expressed concern about potential rate increases on the ATPC System resulting from the allocation of interconnection costs to ATPC and stated that it supports ATPC's position on cost allocation.
• August 15, 2022: ATPC filed its Protest and motion to intervene in this proceeding. The Protest raised two primary objections: (1) the alleged inadequacy of Ridgeline's proposed Metering Station design at the Wetzel County Interconnect, and (2) a challenge to the cost allocation methodology set forth in the Application that assigns $14.7 million (65.92% of the $22.3 million total interconnection facilities cost) to ATPC.
• September 22, 2022: The Commission issued an order granting all motions to intervene, establishing a Track II procedural schedule for the hearing on contested issues, and appointing Settlement Judge Howard Margolis to conduct settlement discussions among the parties. The Track II schedule established dates for the filing of direct, answering, and rebuttal testimony, a technical conference, and an evidentiary hearing before Administrative Law Judge Clara Whitfield.
E. ATPC's Protest (Summary of Arguments Challenged)
ATPC's Protest raises two principal arguments that Ridgeline addresses in this Answer.
First, ATPC contends that the proposed Metering Station at the Wetzel County Interconnect is inadequate to ensure accurate measurement and gas quality monitoring at the interconnection point. Specifically, ATPC asserts that the three-run ultrasonic flow meter configuration specified in Ridgeline's engineering design is insufficient for bidirectional flow measurement at the proposed 800 MMcf/d design capacity of the Metering Station, that the Metering Station lacks adequate gas quality monitoring capabilities, and that SCADA integration between the two systems is insufficiently specified. ATPC argues that these alleged deficiencies could result in inaccurate measurement and custody-transfer errors that would harm ATPC and its shippers.
Second, ATPC challenges the cost allocation methodology set forth in the Application, arguing that the proposed allocation of $14.7 million (65.92%) to ATPC "improperly shifts" interconnection facilities costs to ATPC and its shippers. ATPC contends that Ridgeline is the "primary beneficiary" of the proposed interconnection and that, accordingly, Ridgeline should bear at least 50% of the total interconnection facilities cost — i.e., $11.15 million per party — rather than the $7.6 million (34.08%) proposed in the Application. ATPC argues that its proposed 50/50 allocation is more equitable and better reflects the mutual benefits of the interconnection.
As demonstrated below, both of ATPC's arguments are without merit and should be rejected.
III. ARGUMENT
A. ATPC's Challenge to the Metering Station Design Is Without Merit
ATPC's Protest devotes considerable attention to challenging the engineering design of the proposed Metering Station at the Wetzel County Interconnect. ATPC's argument rests on the premise that the proposed three-run ultrasonic flow meter configuration, combined with the gas chromatograph and SCADA systems specified in the Application, is somehow inadequate to ensure accurate measurement and gas quality monitoring at the interconnection point. This argument reflects a fundamental misunderstanding of modern ultrasonic metering technology and is directly contradicted by applicable industry standards, Commission precedent, and the engineering record in this proceeding.
1. The Proposed Metering Configuration Meets or Exceeds Industry Standards
The Metering Station design set forth in the Application is the product of a rigorous engineering analysis conducted under the supervision of Thomas Greaves, Vice President of Engineering & Operations at Ridgeline, and reviewed by qualified third-party engineering consultants. The design was developed in accordance with AGA Report No. 9, Measurement of Gas by Multipath Ultrasonic Meters (Second Revision, April 2007), which is the authoritative industry standard for custody-transfer measurement using ultrasonic flow meters at natural gas pipeline interconnection points. The design also complies with all applicable requirements of the Commission's regulations under 18 C.F.R. Part 157.
The Metering Station includes the following principal components:
• Three (3) ultrasonic flow meter runs, each consisting of a 12-inch-diameter multipath ultrasonic flow meter with bidirectional measurement capability, installed in a parallel configuration. The three-run design provides two primary measurement runs and one verification/check run, ensuring full redundancy and continuous measurement capability even when one run is taken out of service for maintenance, inspection, or calibration.
• Dual-redundant gas chromatographs for real-time compositional analysis and BTU determination, providing continuous monitoring of gas quality at the interconnection point. The gas chromatographs are configured to provide compositional analysis at sampling intervals of no more than three minutes, consistent with GPA Midstream Standard 2261, Analysis of Natural Gas and Similar Gaseous Mixtures by Gas Chromatography.
• Full SCADA integration, including real-time data transmission capabilities to both Ridgeline's and ATPC's gas control centers, ensuring that both parties have simultaneous access to flow measurement data, gas quality data, and equipment status information.
• Design capacity of 800 MMcf/d for bidirectional flow, expandable to 1.2 Bcf/d through the addition of additional meter runs to match the full design capacity of the Ridgeline Pipeline System. The initial 800 MMcf/d capacity is appropriate given the current throughput of approximately 680 MMcf/d and provides a reasonable margin for growth without requiring immediate investment in additional metering capacity.
The foregoing design is fully consistent with industry standards for custody-transfer metering at pipeline interconnection points and meets or exceeds the metering configurations employed at comparable interconnection points on pipeline systems throughout the Appalachian Basin and elsewhere. There is no basis in the engineering record for ATPC's contention that this design is "inadequate."
2. Three-Run Ultrasonic Configuration Is Adequate for Bidirectional Flow
ATPC's central technical argument is that the three-run ultrasonic flow meter configuration is "inadequate" for bidirectional service at the proposed 800 MMcf/d design capacity. This assertion is factually incorrect and technically unfounded.
The three-run configuration specified in the Application provides full redundancy for custody-transfer measurement. The design employs two primary measurement runs and one verification/check run, which is the standard configuration recommended by AGA Report No. 9 for custody-transfer applications at pipeline interconnection points. AGA Report No. 9 does not require more than two primary measurement runs for flow rates within the design capacity of the meter runs, and the addition of a third run for verification purposes exceeds the minimum standard. This configuration ensures that, at all times, at least two independent measurement paths are available for active custody-transfer measurement, even when one run is taken out of service for periodic maintenance, calibration, or inspection.
The 12-inch meter runs specified in the design are appropriately sized for the operating conditions at the Wetzel County Interconnect, including the operating pressure range of approximately 800 to 1,200 psig and the gas velocity range associated with flows up to 800 MMcf/d. At the maximum design flow rate, gas velocity through each of the two active 12-inch meter runs will be well within the operating envelope specified by the meter manufacturer and within the velocity range for which AGA Report No. 9 establishes accuracy standards. The 12-inch meter size is, in fact, the same size employed at numerous other custody-transfer metering stations on pipeline systems of comparable capacity throughout the eastern United States.
Critically, the ultrasonic flow meters specified in the Application are equipped with reversible ultrasonic transducer pairs in each run, which enable accurate flow measurement in both the forward and reverse directions without the need for physical reconfiguration of the metering equipment. This bidirectional measurement capability is a standard feature of modern multipath ultrasonic flow meters and is specifically addressed in AGA Report No. 9. The reversible transducer configuration ensures that measurement accuracy is maintained regardless of flow direction, addressing ATPC's concern about bidirectional flow measurement directly and comprehensively.
ATPC's Protest fails to identify any specific technical deficiency in the three-run configuration as applied to bidirectional flow. ATPC offers no engineering analysis demonstrating that the proposed configuration would produce inaccurate measurements, no comparison to specific industry standards that the configuration allegedly fails to meet, and no expert testimony supporting its bare assertion of inadequacy. Instead, ATPC makes a generalized claim that the configuration is "insufficient" without identifying what additional metering capability it believes is required or why. This is precisely the type of unsupported allegation that the Commission has routinely rejected. See, e.g., Crowne Albany Group, LLC, 158 FERC ¶ 61,125 (2017) (rejecting unsupported assertions regarding metering adequacy where applicant demonstrated compliance with AGA standards).
Moreover, ATPC's own metering practices undermine its argument. ATPC operates metering stations on its own 640-mile pipeline system at multiple interconnection points, and upon information and belief, several of those metering stations employ comparable or lesser redundancy than the configuration proposed by Ridgeline at the Wetzel County Interconnect. ATPC's Protest fails to explain why a standard that ATPC itself employs on its own system should be deemed inadequate when proposed by Ridgeline, or why a higher standard should apply to Ridgeline's interconnect than to ATPC's own comparable facilities.
The pig launcher/receiver facility located at Milepost 0.0, which is integrated with the Metering Station design, does not compromise measurement accuracy. The pig launcher/receiver is positioned upstream of the metering runs (in the forward-flow direction) and is equipped with appropriate piping configurations, including straight-run piping of sufficient length upstream of the meter runs, to eliminate any potential flow disturbance that could affect measurement accuracy. This configuration is consistent with the upstream piping requirements specified in AGA Report No. 9 and standard industry practice for integrating pig launching and receiving facilities with metering stations.
3. Gas Chromatograph and SCADA Integration Are Comprehensive
ATPC's Protest raises generalized concerns about gas quality monitoring and SCADA integration at the Wetzel County Interconnect. These concerns are addressed directly by the Metering Station design as specified in the Application.
The proposed gas chromatographs will provide continuous compositional analysis at sampling intervals of no more than three minutes, consistent with GPA Midstream Standard 2261. This standard establishes the methodology for the analysis of natural gas and similar gaseous mixtures by gas chromatography and is the industry-accepted standard for gas quality determination at custody-transfer points on natural gas pipeline systems. The three-minute sampling interval ensures that compositional changes in the gas stream — including variations in heating value, specific gravity, and concentrations of non-hydrocarbon components such as carbon dioxide, nitrogen, and hydrogen sulfide — are detected and recorded in near real-time.
The dual-redundant gas chromatograph configuration provides an additional layer of reliability. With two independent gas chromatographs operating simultaneously, the Metering Station will maintain continuous compositional monitoring even during instrument maintenance, calibration, or in the event of an instrument malfunction. The redundant configuration eliminates any gap in gas quality data that could otherwise occur during routine maintenance or unexpected equipment failures. This dual-redundant approach exceeds the minimum requirements of GPA Midstream Standard 2261 and represents best-in-class practice for gas quality monitoring at custody-transfer interconnection points.
SCADA integration at the Metering Station is designed to provide real-time data transmission to both Ridgeline's gas control center in Charleston, West Virginia, and ATPC's gas control center in Pittsburgh, Pennsylvania. The SCADA system will transmit flow measurement data, gas quality data, equipment status information, and alarm notifications to both parties simultaneously, enabling coordinated monitoring and operational response. The data transmission will occur via redundant communication pathways — including both fiber-optic and satellite-based communication links — to ensure continuous data availability. The SCADA system will interface with both Ridgeline's and ATPC's existing gas management systems through industry-standard communication protocols, including Modbus, DNP3, and OPC-DA/UA, as appropriate.
ATPC's Protest does not identify any specific deficiency in the proposed SCADA integration or gas quality monitoring systems. ATPC's generalized assertion that the SCADA integration is "insufficiently specified" ignores the detailed SCADA system design documents included in Exhibit F to the Application, which provide comprehensive specifications for all data points, communication protocols, polling intervals, and alarm setpoints. The SCADA design documents were prepared in consultation with both Ridgeline's and ATPC's respective SCADA vendors to ensure interoperability, and ATPC's own engineers participated in preliminary design discussions prior to filing.
B. The Proposed Cost Allocation Methodology Is Consistent with Cost-Causation Principles and Commission Precedent
ATPC's second principal argument challenges the cost allocation methodology set forth in the Application, which proposes to allocate $7.6 million (34.08%) of the total $22.3 million interconnection facilities cost to Ridgeline and $14.7 million (65.92%) to ATPC. ATPC contends that this allocation "improperly shifts" costs to ATPC and its shippers and proposes instead a 50/50 split of the total cost, allocating $11.15 million to each party. For the reasons set forth below, Ridgeline's proposed cost allocation is fully consistent with cost-causation principles and Commission precedent, while ATPC's proposed 50/50 split is arbitrary, unsupported by cost-causation analysis, and should be rejected.
1. The Total Interconnection Facilities Cost
The total estimated cost of the interconnection facilities at the Wetzel County Interconnect is $22.3 million. This figure encompasses all facilities required to establish a physical interconnection between Ridgeline's 24-inch pipeline system and ATPC's 30-inch mainline at Milepost 412.6 on the ATPC System. The estimate was prepared by Ridgepoint Appraisal & Valuation Inc. ("Ridgepoint"), an independent engineering and cost estimation firm, and reflects current engineering estimates as of the time of filing.
The $22.3 million total includes the following principal components:
• The Metering Station proper, including the three-run ultrasonic flow meter installation, meter tubes, flow conditioners, isolation valves, pressure and temperature transmitters, gas chromatographs, sample conditioning systems, meter building, and electrical and instrumentation systems;
• The pig launcher and pig receiver facilities at the interconnection point;
• Connecting piping between the Ridgeline system and the ATPC system, including transition piping from 24-inch to 30-inch diameter;
• Mainline valves, block valves, and bypass piping;
• Cathodic protection systems for all buried piping and equipment;
• Site preparation, grading, drainage, and erosion control;
• Security fencing, access roads, lighting, and site facilities;
• Modifications to ATPC's existing 30-inch mainline at Milepost 412.6, including hot tap, valve installation, and pressure regulation equipment; and
• All associated construction, engineering, project management, inspection, and testing costs.
The Ridgepoint estimate was prepared on a component-by-component basis, identifying the specific facilities on each side of the interconnection point, and forms the basis for the cost allocation methodology set forth in the Application.
2. Ridgeline's Proposed Allocation: 34.1% / 65.9%
Ridgeline proposes to bear $7.6 million (34.08%) of the total interconnection facilities cost and to allocate $14.7 million (65.92%) to ATPC. This allocation is not arbitrary; it is based on a detailed, facility-by-facility cost-causation analysis that identifies which interconnection facilities are required due to the physical characteristics, system configuration, measurement specifications, and operational requirements of each party's respective pipeline system.
Facilities on the Ridgeline side of the interconnect — including receipt-point piping between the Ridgeline mainline and the metering station, Ridgeline's SCADA interface equipment, the pig launcher, and associated Ridgeline-side site work — total approximately $7.6 million. These facilities are required to connect the Ridgeline system to the interconnection point and to support Ridgeline's operational requirements at the receipt point. They will be owned, operated, and maintained by Ridgeline, and the costs thereof are properly allocable to Ridgeline.
Facilities on the ATPC side of the interconnect — including the Metering Station proper (which must conform to ATPC's own measurement specifications for the receipt of gas into the ATPC System), ATPC-side connecting piping, transition piping from 24-inch to 30-inch diameter, modifications to ATPC's existing 30-inch mainline at Milepost 412.6 (including the hot tap, valve installation, and pressure regulation equipment), the pig receiver, ATPC's SCADA interface equipment, and associated ATPC-side site work — total approximately $14.7 million. These facilities are required due to the physical characteristics and operational requirements of ATPC's existing system and must be constructed to ATPC's specifications. They will be owned, operated, and maintained by ATPC, and the costs thereof are properly allocable to ATPC.
The cost allocation thus reflects a straightforward application of cost-causation principles: each party bears the cost of those interconnection facilities that are necessitated by its own system requirements and that it will own, operate, and maintain. The allocation does not require either party to pay for facilities owned or controlled by the other party, and it does not impose on either party costs driven by the other party's system configuration or operational requirements.
3. FERC Precedent Supports Cost-Causation-Based Allocation
The Commission has long recognized that interconnection costs should be allocated based on cost causation — the fundamental regulatory principle that the party whose system requirements necessitate particular facilities should bear the cost of those facilities. This principle has been articulated and applied in numerous Commission orders addressing interconnection cost allocation under NGA Section 7 and 18 C.F.R. Part 157.
FERC Order No. 2004, Standards of Conduct for Transmission Providers, and its progeny establish a framework for analyzing interconnection costs that is rooted in the cost-causation principle. While Order No. 2004 addressed standards of conduct more broadly, the Commission's interconnection cost allocation jurisprudence under NGA Section 7 consistently applies cost-causation principles to determine the appropriate allocation of interconnection facilities costs between interconnecting pipeline systems. See, e.g., Crowne Albany Group, LLC, 163 FERC ¶ 61,148 (2018) (applying cost-causation analysis to allocate interconnection costs based on which party's system requirements drove the need for specific facilities); Larkspur Holdings, 149 FERC ¶ 61,210 (2014) (approving asymmetric cost allocation where cost-causation analysis demonstrated that the majority of interconnection facilities were necessitated by the requirements of the existing pipeline system); Tennessee Gas Pipeline Co., L.L.C., 154 FERC ¶ 61,098 (2016) (rejecting mechanical 50/50 cost allocation where detailed engineering analysis supported an asymmetric allocation consistent with cost causation).
The Commission has consistently rejected mechanical 50/50 splits where a cost-causation analysis demonstrates that an asymmetric allocation is appropriate. In Larkspur Holdings, 149 FERC ¶ 61,210, the Commission approved an interconnection cost allocation of approximately 40/60 where the existing pipeline system's requirements — including modifications to the existing mainline, transition piping to accommodate different pipeline diameters, and metering specifications mandated by the existing system operator — drove a disproportionate share of the interconnection facilities costs. The Commission observed that "[a] blanket 50/50 split of interconnection costs, without regard to the actual cost drivers, would contravene the cost-causation principle and result in an unjust and unreasonable allocation." Id. at P 47.
ATPC's insistence on a 50/50 split — allocating $11.15 million to each party — disregards the detailed cost-causation analysis set forth in the Application and ignores the fact that a disproportionate share of the interconnection facilities, particularly the Metering Station and ATPC-side modifications, are necessitated by ATPC's system configuration, measurement specifications, and operational requirements. Several specific cost drivers warrant emphasis:
• The 30-inch to 24-inch diameter differential between ATPC's mainline and Ridgeline's pipeline requires specific transition facilities — including reducers, transition piping, and associated structural supports — on the ATPC side of the interconnect. These transition facilities are necessitated by the physical characteristics of ATPC's existing 30-inch mainline and are properly allocable to ATPC.
• ATPC's existing mainline at Milepost 412.6 requires modifications, including a hot tap to create the physical connection to ATPC's pressurized mainline, the installation of mainline block valves and bypass piping, and the installation of pressure regulation equipment to manage the pressure differential between the two systems. These modifications are necessitated by ATPC's existing system configuration and are properly charged to ATPC as the operator of the existing system that must be modified to accommodate the interconnection.
• The Metering Station must be constructed to conform to ATPC's measurement specifications for the receipt of gas into the ATPC System. ATPC's measurement specifications, which are more stringent in certain respects than industry minimum standards, drive specific design requirements that increase the cost of the Metering Station. Because these incremental costs are driven by ATPC's own specifications, they are properly allocable to ATPC.
4. ATPC's 50/50 Proposal Improperly Shifts Costs to Ridgeline
ATPC's proposed 50/50 allocation would require Ridgeline to bear $11.15 million — an increase of $3.55 million over the cost-causation-based allocation proposed in the Application — for facilities that Ridgeline will neither own nor operate. This outcome would require Ridgeline to subsidize the cost of modifications to ATPC's own system and facilities that will be constructed to ATPC's specifications, owned by ATPC, and operated and maintained by ATPC for the benefit of ATPC and its shippers.
This subsidy would ultimately be borne by Ridgeline's own shippers through the inclusion of the additional $3.55 million in Ridgeline's rate base. The resulting increase in Ridgeline's cost of service would be reflected in higher transportation rates charged to shippers on the Ridgeline system, effectively transferring the burden of ATPC's system modifications to parties that derive no benefit from those modifications and that have no control over the design specifications that drive the associated costs. Such an outcome is precisely the type of cross-subsidization that the Commission's cost-causation principles are designed to prevent.
Moreover, ATPC's 50/50 proposal would set an adverse precedent for future interconnection proceedings before the Commission. If the Commission were to adopt a mechanical 50/50 allocation in circumstances where a cost-causation analysis clearly supports an asymmetric allocation, pipeline companies seeking interconnection could be deterred from proposing efficient interconnection designs — knowing that any disproportionate cost arising from the other party's system configuration would be shared equally regardless of cost causation. Such a result would be antithetical to the Commission's longstanding policy of promoting efficient and cost-effective pipeline interconnections.
5. ATPC's Argument That Ridgeline Is the "Primary Beneficiary" Is Misplaced
ATPC argues that Ridgeline is the "primary beneficiary" of the proposed interconnection and that this perceived benefit justifies requiring Ridgeline to bear a greater share of the interconnection costs. This argument fundamentally confuses the concept of benefit with the concept of cost causation, and the Commission has repeatedly declined to substitute a "benefit" analysis for a cost-causation analysis in determining the allocation of interconnection costs.
The interconnection will, in fact, benefit both parties substantially. Ridgeline gains access to ATPC's 3.8 Bcf/d interstate pipeline system, which serves markets in Pennsylvania, Ohio, and New York, providing Ridgeline's shippers with access to a broader range of downstream delivery points and market centers. For its part, ATPC gains access to incremental natural gas supply from the prolific Marcellus and Utica shale formations delivered through the Ridgeline system, enhancing supply diversity on the ATPC System and providing ATPC's shippers with access to competitively priced natural gas from new production areas.
ATPC's own shippers will benefit directly from the interconnection. Access to incremental supply from the Marcellus and Utica shale formations through the Ridgeline system will enhance supply reliability on the ATPC System and may reduce delivered natural gas costs for ATPC's shippers by increasing the number of supply sources available to the ATPC System. The Mountainside Gas Producers Coalition, representing 14 independent natural gas producers operating in the Marcellus and Utica formations, has intervened in this proceeding in support of the interconnection, further demonstrating that the benefits of the interconnection extend beyond Ridgeline to producers, shippers, and consumers who will be served by the interconnected pipeline systems.
The Commission has consistently held that mutual benefit does not alter the cost-causation analysis. In Tennessee Gas Pipeline Co., L.L.C., 154 FERC ¶ 61,098 (2016), the Commission stated that "[t]he fact that both parties may benefit from an interconnection does not justify departing from cost-causation principles in allocating the costs of interconnection facilities. The relevant inquiry is which party's system requirements generate the costs, not which party derives the greater net benefit from the interconnection." Id. at P 52. The Commission's holding in Tennessee Gas Pipeline is directly applicable here and compels rejection of ATPC's "primary beneficiary" argument.
In sum, even if ATPC were correct that Ridgeline derives greater benefit from the interconnection — a proposition that Ridgeline does not concede — that would not justify departing from cost-causation principles in allocating interconnection costs. Costs should be allocated based on which party's system requirements generate the costs, and the Application's facility-by-facility cost-causation analysis demonstrates that $14.7 million of the $22.3 million total is driven by ATPC's system configuration, specifications, and operational requirements.
C. ATPC's Protest Should Not Delay the Proceeding
While Ridgeline submits that ATPC's Protest is without merit and should be denied, Ridgeline recognizes that ATPC's arguments raise factual and technical issues that are appropriate for resolution through the established Track II hearing procedure. The Commission's September 22, 2022 order established a comprehensive procedural schedule, including deadlines for the submission of direct, answering, and rebuttal testimony, a technical conference, and an evidentiary hearing before Administrative Law Judge Clara Whitfield. This procedural framework provides an adequate and appropriate forum for the resolution of the metering station design and cost allocation issues raised in ATPC's Protest.
Ridgeline is fully prepared to present detailed engineering and economic testimony in support of both the Metering Station design and the cost allocation methodology. Thomas Greaves, Vice President of Engineering & Operations at Ridgeline, will provide engineering testimony regarding the Metering Station design, including the adequacy of the three-run ultrasonic flow meter configuration, the gas chromatograph installation, and the SCADA integration design. Angela Moretti, Vice President of Finance & Treasurer at Ridgeline, will present the cost allocation analysis, including the facility-by-facility cost-causation methodology, the Ridgepoint cost estimate, and the economic justification for the proposed 34.08%/65.92% allocation.
Ridgeline respectfully submits that ATPC's Protest should not serve as a basis for delaying the original target in-service date for the interconnection facilities, which is Q4 2023, or the procedural schedule established in the Commission's September 22, 2022 order. Any delay in the resolution of this proceeding would postpone the benefits of the interconnection for producers, shippers, and consumers served by both pipeline systems and would increase the cost of the interconnection facilities due to construction cost escalation. Ridgeline urges the Commission to proceed expeditiously with the Track II hearing schedule and to resolve the contested issues in a timely manner.
IV. RESPONSE TO ATPC'S SPECIFIC ALLEGATIONS
In addition to the arguments addressed above, Ridgeline responds below to each specific allegation set forth in ATPC's Protest, providing a point-by-point rebuttal of ATPC's technical and economic claims.
A. ATPC Allegation: Metering Station Design Is "Inadequate"
ATPC's Protest alleges that the proposed Metering Station design at the Wetzel County Interconnect is "inadequate" to ensure accurate measurement and gas quality monitoring. ATPC raises four specific allegations of inadequacy, each of which is rebutted as follows:
Allegation 1: Insufficient Meter Runs. ATPC alleges that the three-run ultrasonic flow meter configuration does not provide sufficient measurement capacity for the proposed 800 MMcf/d design flow rate at the interconnection point.
Response: This allegation is without merit. As discussed in Section III.A.2 above, the three-run configuration — consisting of two primary measurement runs and one verification/check run — provides full redundancy for custody-transfer measurement at flow rates up to 800 MMcf/d and is consistent with the requirements of AGA Report No. 9. The 12-inch meter runs are appropriately sized for the operating pressure and velocity range at the Wetzel County Interconnect, and the two active measurement runs provide more than adequate capacity for the 800 MMcf/d design flow rate. ATPC has identified no specific technical basis for concluding that three runs are insufficient and has offered no engineering analysis demonstrating that additional meter runs are required.
Allegation 2: Lack of Bidirectional Measurement Capability. ATPC alleges that the proposed metering configuration lacks adequate bidirectional measurement capability and cannot accurately measure gas flowing in both the forward and reverse directions.
Response: This allegation is factually incorrect. As discussed in Section III.A.2 above, each of the three ultrasonic flow meter runs is equipped with reversible ultrasonic transducer pairs that enable accurate flow measurement in both directions without physical reconfiguration. Bidirectional measurement is a standard feature of modern multipath ultrasonic flow meters and is specifically addressed in AGA Report No. 9. ATPC's allegation ignores the reversible transducer capability of the proposed meters and is contradicted by the engineering specifications included in Exhibit D to the Application, which clearly describe the bidirectional measurement capability of the proposed installation.
Allegation 3: Inadequate Gas Quality Monitoring. ATPC alleges that the proposed gas quality monitoring system at the Metering Station is inadequate to ensure accurate determination of gas composition and heating value.
Response: This allegation is without merit. As discussed in Section III.A.3 above, the Metering Station design includes dual-redundant gas chromatographs that provide continuous compositional analysis at sampling intervals of no more than three minutes, consistent with GPA Midstream Standard 2261. The dual-redundant configuration ensures continuous gas quality monitoring even during instrument maintenance, calibration, or malfunction. ATPC has not identified any specific deficiency in the gas chromatograph configuration or sampling interval, and its generalized allegation of inadequacy is unsupported by any technical analysis or expert testimony.
Allegation 4: Insufficient SCADA Integration. ATPC alleges that the proposed SCADA integration between Ridgeline's and ATPC's systems is "insufficiently specified" and may not provide adequate real-time data sharing between the two parties' gas control centers.
Response: This allegation is contradicted by the detailed SCADA system design documents included in Exhibit F to the Application. As discussed in Section III.A.3 above, the proposed SCADA system is designed to provide real-time data transmission to both Ridgeline's and ATPC's gas control centers via redundant communication pathways, using industry-standard communication protocols. The SCADA design documents identify all data points to be transmitted, communication protocols, polling intervals, and alarm setpoints. ATPC's own engineers participated in preliminary design discussions regarding SCADA integration prior to the filing of the Application, and at no point during those discussions did ATPC raise concerns about the level of specification in the SCADA design.
B. ATPC Allegation: Cost Allocation "Improperly Shifts" $14.7 Million to ATPC Shippers
ATPC's Protest characterizes the proposed cost allocation as an improper "shift" of $14.7 million in interconnection facilities costs to ATPC and its shippers. This characterization is misleading and should be rejected.
The $14.7 million allocated to ATPC under the Application represents the estimated cost of interconnection facilities that will be owned, operated, and maintained by ATPC and that are necessitated by ATPC's own system configuration, measurement specifications, and operational requirements. These facilities include modifications to ATPC's existing 30-inch mainline, ATPC-side piping and transition facilities, the Metering Station (which must conform to ATPC's measurement specifications), the pig receiver, and ATPC's SCADA interface equipment. Allocating the cost of these ATPC-owned and ATPC-operated facilities to ATPC is not a "shift" of costs; it is a straightforward application of cost-causation principles.
ATPC's argument that its shippers will bear these costs ignores the fundamental distinction between the allocation of interconnection costs between the interconnecting parties and the recovery of those costs from shippers. Ridgeline's proposed allocation addresses only the first issue — how the $22.3 million total cost should be divided between Ridgeline and ATPC. The Application does not prescribe how ATPC should recover its $14.7 million share of interconnection costs from its own shippers. That is a matter entirely within ATPC's control and would be addressed in ATPC's own tariff filings before the Commission. ATPC may propose to recover its interconnection costs through a surcharge, through inclusion in rate base in a future general rate case, or through any other mechanism permitted by the Commission's regulations and ATPC's existing tariff. The method of cost recovery from ATPC's shippers is ATPC's decision and is not at issue in this proceeding.
The Clearwater Municipal Gas Authority's expression of support for ATPC's position on cost allocation reflects Clearwater's concern about potential rate increases on the ATPC System that could result from ATPC's recovery of its share of interconnection costs. While Ridgeline understands Clearwater's concern, that concern is properly addressed in ATPC's own rate proceedings, not in this docket. The question before the Commission in this proceeding is whether the cost allocation between Ridgeline and ATPC is consistent with cost-causation principles — and, for the reasons set forth above, it plainly is. The downstream rate impact on ATPC's shippers is a function of ATPC's chosen method of cost recovery and the overall cost of service on the ATPC System, neither of which is determined by this proceeding.
V. REQUEST FOR RELIEF
WHEREFORE, for the reasons set forth herein, Ridgeline Midstream Services LLC respectfully requests that the Commission:
1. Deny ATPC's Protest in its entirety, including both ATPC's challenge to the Metering Station design and ATPC's challenge to the proposed cost allocation methodology;
2. Affirm the adequacy of the proposed metering station design at the Wetzel County Interconnect, including the three-run ultrasonic flow meter configuration, the dual-redundant gas chromatograph installation, and the SCADA integration design, as meeting or exceeding applicable industry standards and Commission requirements;
3. Affirm the proposed cost allocation of $7.6 million to Ridgeline (34.08%) and $14.7 million to ATPC (65.92%) for the $22.3 million total interconnection facilities cost, as consistent with cost-causation principles and Commission precedent;
4. Proceed with the Track II hearing schedule as established in the Commission's September 22, 2022 order, without delay; and
5. Grant such other and further relief as the Commission deems just, reasonable, and appropriate.
VI. CONCLUSION
For the foregoing reasons, ATPC's Protest is without merit on both counts and should be denied.
The Metering Station design at the Wetzel County Interconnect meets or exceeds applicable industry standards, including AGA Report No. 9 and GPA Midstream Standard 2261, and is fully adequate for bidirectional flow measurement at the proposed 800 MMcf/d design capacity, with expansion capability to 1.2 Bcf/d. The three-run ultrasonic flow meter configuration provides full redundancy for custody-transfer measurement, the dual-redundant gas chromatographs ensure continuous gas quality monitoring, and the SCADA integration design provides real-time data sharing between Ridgeline's and ATPC's gas control centers. ATPC's allegations of inadequacy are unsupported by the technical record and reflect a fundamental misunderstanding of modern ultrasonic metering technology.
The cost allocation methodology set forth in the Application is consistent with the Commission's well-established cost-causation principles, as articulated in FERC Order No. 2004 and its progeny, and with precedent from analogous interconnection proceedings under NGA Section 7 and 18 C.F.R. Part 157. The proposed allocation of $7.6 million (34.08%) to Ridgeline and $14.7 million (65.92%) to ATPC reflects a detailed, facility-by-facility cost-causation analysis that assigns costs to the party whose system requirements necessitate each component of the interconnection facilities. ATPC's proposed 50/50 split is arbitrary, contravenes cost-causation principles, and would improperly subsidize ATPC's system modifications at the expense of Ridgeline and its shippers.
Ridgeline is prepared to support its Application through the evidentiary hearing process established by the Commission's September 22, 2022 order and looks forward to a prompt resolution of this proceeding. Ridgeline respectfully urges the Commission to deny ATPC's Protest and to proceed with the Track II hearing schedule without delay.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
George Trujillo Responsible Partner, Energy & Infrastructure
Brett Callahan Lead Associate, Energy & Infrastructure
David Stanton Working Associate, Energy & Infrastructure
1601 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-4100 Facsimile: (202) 555-4101
Email: gtrujillo@calderwoodharkness.com
Counsel for Ridgeline Midstream Services LLC
Dated: October 17, 2022
CERTIFICATE OF SERVICE
I hereby certify that, on this 17th day of October, 2022, a copy of the foregoing Answer of Ridgeline Midstream Services LLC to the Protest of Appalachian Trunk Pipeline Company, LLC was served upon all parties on the official service list maintained by the Secretary of the Federal Energy Regulatory Commission in Docket Nos. RP22-847-000 and RP22-847-001, by electronic mail and first-class United States mail, postage prepaid, addressed to the following:
Appalachian Trunk Pipeline Company, LLC c/o William Pratt, Senior Partner Kellner, Royce & Dillard LLP One PPG Place, Suite 2800 Pittsburgh, PA 15222
Email: wpratt@kellnerroyce.com
Mountainside Gas Producers Coalition c/o Rebekah Montague Whitmore & Sable LLP 1200 New Hampshire Avenue NW, Suite 600 Washington, DC 20036
Email: rmontague@whitmoresable.com
Clearwater Municipal Gas Authority c/o Stephen Greer Fordham Municipal Law Group PC 312 Adams Avenue, Suite 100 Scranton, PA 18503
Email: sgreer@fordhamlaw.com
FERC Trial Staff c/o Jonathan Briggs Office of the General Counsel Federal Energy Regulatory Commission 888 First Street NE Washington, DC 20426
Email: jonathan.briggs@ferc.gov
Secretary of the Federal Energy Regulatory Commission 888 First Street NE Washington, DC 20426
________________________________________
David Stanton Calderwood & Harkness LLP
Dated: October 17, 2022
APPENDIX A TABLE OF AUTHORITIES
Statutes
Federal Regulations
FERC Orders
FERC Case Law
Industry Standards
Authority | Citation
Natural Gas Act § 4 | 15 U.S.C. § 717c
Natural Gas Act § 5 | 15 U.S.C. § 717d
Natural Gas Act § 7 | 15 U.S.C. § 717f
Authority | Citation
Rules of Practice and Procedure — Answers | 18 C.F.R. § 385.213
Rates and Charges — Natural Gas Companies | 18 C.F.R. Part 154
Applications for Certificates of Public Convenience and Necessity | 18 C.F.R. Part 157
Certain Natural Gas Sales and Transportation | 18 C.F.R. Part 284
Authority | Citation
FERC Order No. 2004, Standards of Conduct for Transmission Providers | 68 Fed. Reg. 69,134 (Dec. 11, 2003); FERC Stats. & Regs. ¶ 31,155 (2003)
Authority | Citation
Crowne Albany Group, LLC | 158 FERC ¶ 61,125 (2017)
Crowne Albany Group, LLC | 163 FERC ¶ 61,148 (2018)
Larkspur Holdings | 149 FERC ¶ 61,210 (2014)
Tennessee Gas Pipeline Co., L.L.C. | 154 FERC ¶ 61,098 (2016)
Authority | Description
AGA Report No. 9 (Second Revision, April 2007) | Measurement of Gas by Multipath Ultrasonic Meters — American Gas Association
GPA Midstream Standard 2261 | Analysis of Natural Gas and Similar Gaseous Mixtures by Gas Chromatography — GPA Midstream Association