On February 4, 2014, the Governers of the Midwestern States (Mark Dayton – MN; Terry Branstad – IA; Mike Pence – IN; Sam Brownback – KS; Rick Snyder – MI; John Kasich – OH; and Scott Walker – WI) sent a letter to President Obama requesting immediate assistance to address the propane supply shortage and subsequent price increases due to lower-than-average temperatures. In addition, on January 28, 2014, the Department of Homeland Security’s (DHS) Integrated Analysis Task Force issued an update on Propane Supply Issues in the United States, with three key findings, two of which are directly related to the Governers’ request for assistance: (1) unseasonably cold weather was expected over the next two weeks and additional regions or states are likely to extend or issue emergency declarations; and (2) because prices are continuing to rise some states are providing emergency heating assistance to residents who can no longer afford fuel costs.

In response to these concerns regarding propane availability, on February 7, 2014, FERC issued an order requiring Enterprise TE Products Pipeline Company, LLC (Enterprise TEPPCO) to temporarily provide priority treatment to propane shipments from Mont Belvieu, Texas, to locations in the Midwest and Northeast in order to help alleviate the shortage of propane supplies in those regions. The Commission concludes in the order that an emergency exists, and that the Commission should exercise its emergency powers pursuant to Section 1(15)(d) of the Interstate Commerce Act (ICA) to direct Enterprise TEPPCO to immediately provide priority for propane as permitted by the prorationing policy included in Enterprise TEPPCO’s tariff.  The Commission has never before used its authority under Section 1(15)(d) to require such priority treatment for shipments to particular regions of the country.

Initially, Enterprise TEPPCO was required to comply with this emergency directive for seven days pending further review and order of the Commission. However, due to an agreement between the Commission and Enterprise TEPPCO dated February 10, 2014, Enterprise TEPPCO will continue to provide priority treatment for propane shipments to the Midwest and Northeast through February 21, 2014. The Commission issued an order regarding this extension of time on February 11, 2014.