TransCanada Evaluating Nebraska PSC Decision On Keystone XL

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TransCanada Corp. confirmed that on Nov. 20, the Nebraska Public Service Commission (PSC) has approved an alternative route for the proposed Keystone XL Pipeline project through the state. TransCanada is evaluating the PSC’s decision.

By a vote of three-to-two, PSC commissioners approved an order giving TransCanada the go ahead to build the Keystone XL Pipeline utilizing the proposed Mainline Alternative Route. The Mainline Alternative Route was one of three proposed routes (Preferred Route, Sandhills Alternative Route and  Mainline Alternative Route) included in the application filed by TransCanada Keystone Pipeline LP for the Keystone XL Pipeline through Nebraska.

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The decision follows a more than nine-month long legal process highlighted by a nearly weeklong hearing in August. The process also included public participation with commissioners holding four public meetings on the OP-0003 docket. Public comment was also received via email and in writing.

“The order speaks for itself,” said PSC chairman Tim Schram, in a written statement. “While we would like to thank everyone who participated in this process it would be inappropriate to comment further as legal challenges to the decision remain a possibility.”

The parties to the proceeding have 30 days to file an appeal of the decision with the courts.

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“As a result of today’s decision, we will conduct a careful review of the Public Service Commission’s ruling while assessing how the decision would impact the cost and schedule of the project,” said Russ Girling, TransCanada’s president and CEO.

Proponents of the project were quick to issue statements applauding the PSC order. The Association of Oil Pipe Lines (AOPL) notes that this action represents the last major hurdle in the pipeline’s permitting process.

“Nebraska recognizes the Keystone XL pipeline is in the public interest bringing good paying jobs and more affordable energy for US consumers,” said Andy Black, President and CEO of AOPL.

Construction of the Keystone XL pipeline would provide nationally over 42,000 U.S. jobs and $2.1 billion in U.S. worker payroll, according to economic analysis by the U.S. State Department (Final Supplemental Environmental Impact Statement: Keystone XL Project, Jan. 2014, p.4.10-1).

While Keystone XL would support 6,800 construction jobs with $420 million in payroll, it would also lead to 4,600 manufacturing jobs with $309 million in payroll, 4,400 jobs in trade with $172 million in payroll, 2,200 jobs in finance and insurance with $131 million in payroll, 5,100 jobs in other professional services with $343 million in payroll, 2,700 jobs in health services with $141 million in payroll, and 5,700 jobs in food and accommodations with $278 million in payroll. Other proposed pipeline projects can be expected similarly to create thousands of jobs with millions of dollars in worker payroll.

The AOPL release goes on to note that, locally in Nebraska, federal government analysis predicted a construction camp in Holt County would generate the equivalent of one full year of property taxes. Nebraska sales and construction equipment use tax revenues would generate $16.5 million for state government. In its first full year of operation, the Keystone XL would generate $11.8 million in additional property taxes for counties in the State of Nebraska. Individual Nebraska counties would see their property tax revenues increase 2 to 14 percent. New revenues from Keystone XL would benefit the communities directly, funding increases to school budgets, police and fire departments and local government needs.

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API President and CEO Jack Gerard also applauded the order and thanked the commission for its thoughtful and comprehensive process to evaluate the project.

“The Nebraska Public Service Commission set an example for how to carefully evaluate critical energy infrastructure projects, even in the face of strongly held views and opinions,” said Gerard. “It’s been a long path to today’s approval and the Commission should be commended. Their action allows the Keystone XL pipeline to be built by highly-trained, skilled tradesmen using state-of-the-art technologies aimed at protecting the environment and promoting the safety of our communities. Pipelines such as this enhance our ability to safely deliver North American energy to our world class refineries, which in turn provide the fuels and products we all rely on every day.”

Apart from Keystone XL, TransCanada will continue to advance its $24 billion near-term capital program in addition to other longer-term opportunities. TransCanada’s portfolio of high quality projects is expected to generate growth in earnings and cash flow to support an expected annual dividend growth rate at the upper end of an eight to 10 percent range through 2020.

 

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