FEDERAL APPEALS COURT CONFIRMS MUNICIPAL AUTHORITY OVER GAS TRANSMISSION FACILITIES

The Fifth Circuit Court of Appeals recently upheld a federal district court ruling that allowed the City of Grand Prairie to enforce various land use regulations against a Texas Midstream Gas Services (TMGS) compressor station.

The city code requires a specific use permit, and various other permits, for the construction of a compressor station in certain zoning districts. The code also establishes conditions for the issuance of the permits, including minimum setbacks, roof pitch, building material requirements, architectural design compatibility with surrounding development, noise limitations, and a “security fence” of at least eight feet in height to enclose the area.

TMGS sued the city, claiming that the federal Pipeline Safety Act (PSA) and state law preempt the city’s requirements. The PSA prescribes safety standards not only for pipelines but also for related structures, including compressor stations.

The court of appeals concluded that, with the exception of the “security fence” requirement, the city code does not address compressor station “safety.” Rather, it relates to general aesthetics and community enhancement and was designed to protect property values:

Our decision today is the first to consider whether the PSA preempts a setback requirement for a compressor station. However, our decision is consistent with PSA preemption jurisprudence from our court and elsewhere…Cases decided under the PSA’s predecessor statutes have uniformly invalidated parochial safety provisions…[but] [n]one of these cases foreclose laws primarily related to aesthetics or non-safety police powers. The PSA preempts safety standards for natural gas pipeline facilities. Grand Prairie’s setback requirement is not a safety standard in letter, purpose, or effect. It may remain in force.

The court of appeals also rejected the TMGS argument that its eminent domain authority should override the city’s police power regulations.

The opinion is a good one for those cities that regulate natural gas compressor stations and other equipment.

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