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Mike Nowatzki, Forum News Service, Published December 18 2013

Company won't face fines for unpermitted gas pipeline in ND

BISMARCK – An Oklahoma-based company won’t face fines for installing and operating a natural gas pipeline in North Dakota without the proper state permits, but a state regulator said Wednesday that she may pursue a change in state law to make it easier to impose penalties in such cases.

Public Service Commissioner Julie Fedorchak said that while Hiland Operating LLC testified that it didn’t know it needed PSC approval to site a 6.5-mile-long pipeline installed in 2009 in Burke and Divide counties, “not being aware of the law is not a defense.”

Under state law, anyone who constructs or operates a transmission line without first securing the required certificate or permit is guilty of a Class A misdemeanor and subject to civil penalties of up to $10,000 for each day the violation persists, not to exceed $200,000.

State statute says the company must have “willfully” violated the law, and Fedorchak said, “I don’t think that that’s the case in this instance.” She said she doesn’t plan to open a PSC investigation into the matter, but she questioned the law’s requirement.

“ ‘Willful’ is a really high standard, and … I may or may not be pursuing in the Legislature some check of that language to see if truly willful is what we want in this instance,” she said. “… They should just have to know what the law is, and if they avoid it, they should be subject to penalties.”

Commissioner Randy Christmann said the PSC could throw its power around and penalize Hiland Operating, but he added that the most important thing is that the company reported the unpermitted pipeline.

“We want to make sure we don’t put a strong disincentive to people coming forward if they do make a mistake,” he said.

Hiland Operating previously told Forum News Service in an email that it “did not correctly understand the statutes governing siting of the natural gas residue pipeline,” but that the pipeline was built and has operated in compliance with PSC regulations.

In other business Wednesday, the PSC approved environmental cost recovery tariffs and rate increases for Otter Tail Power Co. and Montana-Dakota Utilities Co. to offset the cost of pollution control equipment installed at the Big Stone coal-fired power plant in South Dakota.

Big Stone was required to install air quality control equipment to reduce emissions of sulfur dioxide and nitrogen oxide to comply with the U.S. Environmental Protection Agency’s regional haze rule, according to documents filed with the PSC. The plant is co-owned by NorthWestern Corp., MDU and Otter Tail Power.

The rates approved Wednesday will result in an average monthly increase of $2.70 for Otter Tail residential customers and $1.52 for MDU residential customers, starting in January, Fedorchak said.