Pa. regulator: Sunoco pipeline project has public utility status

Sunoco Logistics Partners and its proposed Marcellus Shale Mariner East project have public utility status, the Pennsylvania Public Utility Commission ruled Thursday.

The decision was a victory for Sunoco, which is repurposing a petroleum pipeline to transport Marcellus Shale ethane and propane to Marcus Hook.

The commission noted that Sunoco's pipeline routes and services have been certificated as public utilities since the early 1930s.

"Sunoco's amended petitions adequately plead sufficient facts for the commission to find that it is both a 'public utility' and a 'public utility corporation,' " said PUC vice chairman John F. Coleman Jr. and commissioner Pamela A. Witmer in a joint motion approved 4-1 by the commission.

The ruling reversed an earlier advisory opinion by two PUC administrative law judges that Sunoco's Marcellus pipeline would not qualify as a public utility.

The commission directed the PUC's Office of Administrative Law Judge to hold hearings on Sunoco's zoning exemption request to construct "buildings" around, and over, valve control and pump stations. A favorable decision would allow Sunoco to bypass local zoning restrictions.

"The issue becomes whether the 'buildings' are reasonably necessary for the convenience or welfare of the public, meaning they are exempt from local zoning ordinances," the commission said. "We must decide whether it is in the convenience or welfare of the public for Sunoco to enclose the planned facilities with walls and roofs, even if those enclosures may conflict with local zoning ordinances."

Michael J. Hennigan, president and CEO of Sunoco Logistics, said the company was pleased that the PUC "has confirmed that we are a public utility corporation" and "recognized that Mariner East will provide a critical service - bringing Pennsylvania energy to Pennsylvanians - with significant public benefits."

Hennigan pledged to "continue to work cooperatively with all municipalities."

The Mariner East project, supported by the gas industry and business leaders, has attracted opposition from some neighboring landowners, particularly in Chester County's West Goshen Township, where Sunoco proposes to build a pumping station.

The Chester County Community Coalition, which was formed in April in response to Sunoco Pipeline's plans, and the Concerned Citizens of West Goshen "are extremely upset with the decision of the PUC today," Tom Casey, director of the coalition and a West Goshen resident, said Thursday. He said the groups are talking to their lawyer about what to do next.

Commissioner James H. Cawley dissented in the 4-1 decision.