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TITLE 16ECONOMIC REGULATION
PART 1RAILROAD COMMISSION OF TEXAS
CHAPTER 3OIL AND GAS DIVISION
RULE §3.65Critical Designation of Natural Gas Infrastructure

(a) Definitions.

  (1) In this section, the term "energy emergency" means any event that results in or has the potential to result in firm load shed required by the reliability coordinator of a power region in Texas.

  (2) In this section, the term "critical customer information" means the information required on Commission Form CI-D and any attachments.

  (3) In this section, "any volume of gas indicated in Mcf/day" means the average daily production from the well's six most recently filed monthly production reports. Wells without six months of production reports shall average the production from the well's production reports on file with the Commission or use the production volume from the well's initial potential test or deliverability test if the well has not yet filed a production report.

(b) Critical designation criteria. The following facilities are designated critical during an energy emergency:

  (1) Critical Gas Supplier. The following facilities are designated a critical gas supplier:

    (A) gas wells producing gas in excess of 15 Mcf/day;

    (B) oil leases producing casinghead gas in excess of 50 Mcf/day;

    (C) gas processing plants;

    (D) natural gas pipelines and pipeline facilities including associated compressor stations and control centers;

    (E) local distribution company pipelines and pipeline facilities including associated compressor stations and control centers;

    (F) underground natural gas storage facilities;

    (G) natural gas liquids transportation and storage facilities; and

    (H) saltwater disposal facilities including saltwater disposal pipelines.

  (2) Critical Customer. A critical customer is a critical gas supplier for whom the delivery of electricity from an electric entity is essential to the ability of such gas supplier to operate. A critical customer is required to provide critical customer information pursuant to subsection (g) of this section to the electric entities described in §25.52(h) of this title (relating to Reliability and Continuity of Service) and Texas Utilities Code §38.074(b)(1) so that those electric entities may prioritize the facilities in accordance with Texas Utilities Code §38.074(b)(2) and (b)(3). Priority for load-shed purposes during an energy emergency is described by §25.52(h)(2) of this title and any guidance issued thereunder by the Public Utility Commission.

(c) Request for critical designation if not designated critical in subsection (b) of this section.

  (1) A facility that is not designated critical under subsection (b) of this section may write to the Commission to apply to be designated critical if the facility's operation is required in order for another facility designated critical to operate. The applicant shall include objective evidence that the facility's operation is required for another facility designated critical in subsection (b) of this section to operate. If approved, the facility shall submit Form CI-D.

  (2) A facility that is not designated critical under subsection (b) of this section but that is included on the electricity supply chain map produced by the Texas Electricity Supply Chain Security and Mapping Committee shall write to the Commission to apply to be designated critical, and after approval, shall submit Form CI-D.

(d) Acknowledgment of critical status. Except as provided by subsection (f) of this section, an operator of a facility designated as critical under subsection (b) of this section shall acknowledge the facility's critical status by filing Form CI-D as provided in this subsection. In the year 2022, the Form CI-D acknowledgment shall be filed bi-annually by January 15, 2022, and either September 1, 2022, or 30 days from the date the map is produced by the Texas Electricity Supply Chain Security and Mapping Committee, whichever is later. Beginning in 2023, the Form CI-D acknowledgment shall be filed bi-annually by March 1 and September 1 of each year.

(e) Facilities not eligible for an exception. Because of their contribution to the natural gas supply chain, the following facilities designated critical under subsection (b) of this section are not eligible for an exception under subsection (f) of this section:

  (1) a facility included on the electricity supply chain map produced by the Texas Electricity Supply Chain Security and Mapping Committee;

  (2) gas wells or oil leases producing gas or casinghead gas in excess of 250 Mcf/day;

  (3) gas processing plants;

  (4) natural gas pipelines or pipeline facilities that directly serve local distribution companies or electric generation;

  (5) local distribution company pipelines or pipeline facilities;

  (6) underground natural gas storage facilities;

  (7) natural gas liquids storage and transportation facilities; and

  (8) a saltwater disposal facility, including a saltwater disposal pipeline, that supports a facility listed in paragraphs (1) through (7) of this subsection.

(f) Critical designation exception.

  (1) A facility listed in subsection (b) of this section other than those identified in subsection (e) of this section may apply for an exception. An applicant shall demonstrate with objective evidence a reasonable basis and justification in support of the application, such as all of the gas produced at a facility is for on-site consumption, or the facility does not otherwise provide gas for third-party use. The Director of the Critical Infrastructure Division will administratively approve or deny a request for an exception. If the request is denied, the Division will notify the applicant and the applicant may request a hearing to challenge the denial. The party requesting the hearing shall have the burden of proof.

  (2) An applicant for exception shall submit a Form CI-X exception application that identifies each facility for which an exception is requested. The Form CI-X shall be accompanied by an exception application fee. The amount of the fee is $150 as established in Chapter 81, Texas Natural Resources Code.

    (A) In the year 2022, the Form CI-X exception application shall be filed bi-annually by January 15, 2022, and either September 1, 2022, or 30 days from the date the map is produced by the Texas Electricity Supply Chain Security and Mapping Committee, whichever is later. Beginning in 2023, the Form CI-X exception application shall be filed bi-annually by March 1 and September 1 of each year.

    (B) Once an operator has an approved Form CI-X on file with the Commission, the operator is not required to pay the $150 exception application fee when the operator updates the facilities identified on its Form CI-X.

(g) Providing critical customer information. A critical customer shall provide the critical customer information to the electric entities described in §25.52 of this title and Texas Utilities Code § 38.074(b)(1) unless the critical customer is granted an exception under subsection (f) of this section. The critical customer information shall be provided in accordance with §25.52 of this title. The operator shall certify on its Form CI-D that it has provided the critical customer information to its electric entity.

(h) Confidentiality of information filed pursuant to this section. A person filing information with the Commission that the person contends is confidential by law shall notify the Commission on the applicable form. If the Commission receives a request under the Texas Public Information Act (PIA), Texas Government Code, Chapter 552, for materials that have been designated confidential, the Commission will notify the filer of the request in accordance with the provisions of the PIA so that the filer can take action with the Office of the Attorney General to oppose release of the materials.

(i) Exceptions not transferable. Exceptions are not transferable upon a change of operatorship. When a facility is transferred, both the transferor operator and the transferee operator shall ensure the transfer is reflected on each operator's Form CI-D or Form CI-X when the applicable form update is submitted in accordance with the bi-annual filing timelines in subsections (d) and (f) of this section. If the facility has an exception under subsection (f) of this section, the exception shall remain in effect until the next bi-annual filing deadline. If the transferee operator seeks to continue the exception beyond that time period, the transferee operator shall indicate the transferred facility on the Form CI-X pursuant to subsection (f) of this section.

(j) Failure to file or provide required information. An operator who fails to comply with this section may be subject to penalties under §3.107 of this title (relating to Penalty Guidelines for Oil and Gas Violations).


Source Note: The provisions of this §3.65 adopted to be effective December 20, 2021, 46 TexReg 8688

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