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Fedorchak touts PSC proposal to fund state rail safety program

From the Jamestown Sun Article by Patrick Springer

FARGO — Julie Fedorchak, a member of the North Dakota Public Service Commission, appeared Thursday in Fargo to promote the commission’s proposal to add a rail safety program to supplement federal inspections.

Fedorchak, a Republican appointee who faces a challenge from Democrat Tyler Axness in the November election, said the PSC’s plan to add three staff members at a cost of $1 million per biennium is “measured” and appropriate to the dramatic increase in rail shipments of Bakken crude oil.

Rail shipments in North Dakota more than tripled in volume between 2007 and 2012, with oil cargoes accounting for much of the increase.

The spike in rail traffic and increased need for public safety — as shown by the December derailment and explosion of oil tankers near Casselton — create the need for the state to augment the federal rail inspection program, Fedorchak said.

“This is the time to do this,” she said, adding that the state also must help to expand pipeline capacity to carry petroleum, which also will make the rails safer as well as support a growing industry important to the state’s economy.

Rail safety inspections in North Dakota now are entirely performed by the Federal Railroad Authority, or FRA, which has two inspectors in the state to check 3,000 miles of track.

The PSC proposal would add a state rail track inspector and mechanical inspector as well as a rail safety manager. The inspectors would be trained and certified by the FRA and have the same authority, Fedorchak said.

“The state can step in here and direct our resources to the areas of greatest concern,” she said, adding that the federal inspectors are working hard but are stretched thin.

Gov. Jack Dalrymple has expressed support for the PSC’s 2015-17 budget proposal, Fedorchak said.

Rep. Pete Silbernagel, R-Casselton, appeared with Fedorchak and supported the proposed state inspection program to augment the federal program.

Silbernagel said Casselton, which sees 14 to 18 trains rumble through the area every day, will welcome a state rail inspection program. He counted four train derailments in recent years on a stretch of track in the area, including the December derailment of oil and grain trains.

“It’s not an over-the-top program,” Silbernagel said. “It’s meant to get more boots on the ground.”

The state inspection program would be part of a broader rail safety solution, which also includes building more pipelines, increasing tanker car standards and setting safe train speeds.

Axness, a Fargo Democrat who serves in the state Senate and is vying for Fedorchak’s post, said state regulators have been slow to act and assume responsibility for the predictable challenges stemming from the oil boom.

“It’s too little, too late in my opinion,” he said, though he does support an increased state role and agrees expanded pipeline capacity is needed.

Public Service Commission Proposes New Rail Safety Program

As Reported on KXNews

Public Service Commissioner Julie Fedorchak is calling for safer rail operations in North Dakota.

She outlined a proposal that would hire two rail inspectors for the 3000 miles of track in North Dakota. Currently the Federal Rail Administration is solely responsible for rail safety. The Rail Safety Program would cost about 500,000 per year and would come into effect in late 2015.

Fedorchak says federal inspectors are stretched too thin and have responded too slowly to the quickly changing rail industry.
“The rail system is a huge driver in our economy and that’s going to be here for many years. I think that a rail safety program now is a prudent step for the state to take.” says Julie Fedorchak. Fedorchak says the volume of rail traffic in North Dakota has increased nearly 233% between 2000 and 2012. And much of the cargo has become big volumes of hazardous materials.

The total cost of the program will be about a half a million per year.

PSC approves MDU agreement

From the Bismarck Tribune Article by Nick Smith

State regulators approved an agreement negotiated with a major utility company which prevents customers from seeing any rate increase for recovering costs associated with a project in Mandan.

The North Dakota Public Service Commission unanimously voted in favor of a settlement with Montana-Dakota Utilities Company on Wednesday.

The agreement deals with the recovery of the cost of the Heskett III, an 88-megawatt gas combustion turbine generator the company built in Mandan.

Commissioner Julie Fedorchak said Heskett III is already operational and the cost of the project was approximately $76 million.

“There is no rate adjustment,” Fedorchak said. “It’s a good deal for customers at this point.”

Fedorchak said there had been several changes to the settlement agreement since a cost recovery tariff and proposed rate increase were filed in February. Originally MDU had proposed a rate increase of $3.62 per month to residential customers.

Following amendments, the final settlement has MDU agreeing to pay off the cost of the new generator using existing revenue. The agreement does, however, leave the door open for MDU to file a rate increase in the future if current and projected earnings fall below a 10.75 percent return on equity.

If MDU’s 2014 return on equity exceeds 10.75 percent, customers would receive refunds on their bills for 50 percent of the excess earnings.

New pipeline would go under Lake Sakakawea

From the Article by Dave Thompson

A new oil pipeline project is in the works.

Paradigm Midstream Services is proposing a 78 mile pipeline to run from oil fields in McKenzie County to Mountrail County. Public Service Commissioner Julie Fedorchak says the company at this point hasn’t filed any route or corridor plans – but is asking the PSC for designation of “public convenience and necessity.”

“It would have the capacity to carry 230,000 barrels per day,” said Fedorchak. “The main purpose is to take crude from McKenzie County south of the Missouri River and transport it up to some of the rail and pipeline facilities, particularly the Enbridge Sandpiper pipeline, which is north of the river.”

Fedorchak says the pipeline would have to cross Lake Sakakawea – and she says the company is planning to put the pipe underground. She says that’s a little more complicated – because the Army Corps of Engineers would have to give the company the go-ahead to put the pipe under the lake.

‘In the past, we have put all of our orders as contingent upon receiving the permit from the Corps,” said Fedorchak. “In the case of the BakkenLink pipeline, which does the same thing, they built the segments south of the river, and are still waiting for the permit from the Corps.”

The pipe would be 16 inches to 20 inches in diameter.

Public Service Commissioner Julie Fedorchak Endorsed by North Dakota Farm Bureau

BISMARCK, N.D.—The North Dakota Farm Bureau (NDFB) announced its endorsement of sitting Commissioner Julie Fedorchak for election to the North Dakota Public Service Commission.

“We know Julie understands the unique needs of rural citizens and communities that make up our membership base,” NDFB Director of Public Policy Pete Hanebutt said. “She has done an outstanding job of reaching out to our members and our organization to assure that farmers and ranchers concerns are always represented. Her accessibility and openness with the public has earned her the respect of our members.”

Commissioner Fedorchak expressed her gratitude for the support and endorsement of the NDFB.

“I am proud to serve on the Public Service Commission and represent my fellow North Dakotans during this time of enormous growth and change in our state,” Fedorchak said. “The Farm Bureau has long been a strong voice for private landowners, for agriculture and for rural North Dakota and I am honored by the support of this grassroots organization and the 27,000 families who are its members.”

Fedorchak: New rail safety rules ‘good step’, final tank car specs needed

BISMARCK, N.D.—Public Service Commissioner Julie Fedorchak applauded today’s announcement by federal officials of tougher safety standards for transporting oil and other hazardous materials by rail, but urged US Transportation Secretary Anthony Foxx to move decisively to determine the new standards for tank cars.
New rules include a phase out of older tank cars within two years, lower speed limits through cities and improved quality for breaks.

“North Dakota is a leader in producing oil that is helping Americans become energy independent. These new rules are a step in the right direction for improving public safety and confidence in our transportation system,” Fedorchak said. “However, completing the new rules for tank cars is vital and must be done soon so the industry can safely address the need for cars with higher standards as soon as possible.”

Fedorchak said her work to enhance rail safety on the state level continues.

Julie Fedorchak has been serving on the PSC since January 2, 2013 when Gov. Jack Dalrymple appointed her to complete Kevin Cramer’s term. She was most recently the state director for U.S. Senator John Hoeven. She brings to the commission 20 years of public and private sector experience including 10 years running her own business and serving as a senior policy advisor for both Hoeven and Gov. Ed Schafer. A fourth generation North Dakotan, Julie is steadfast in her commitment to good government and public service. She brings a pragmatic approach to the energy development challenges facing North Dakota, balancing the need for fair and certain regulatory processes with a strong focus on improving public safety and environmental stewardship.

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Fedorchak: PSC oversight evolving to meet changing demands

Opinion Editorial by Julie Fedorchak

McKenzie County Economic Development Director Gene Veeder is all-too familiar with the impacts of the Bakken oil boom. At the recent Governor’s Pipeline Summit, Veeder said the greatest frustration for people in the Watford City area isn’t housing, day care shortages or flaring. It’s traffic.

Pipelines are the solution for this and so many other challenges of the oil boom. They will eliminate congestion, improve road safety and relieve pressure on the railroads. Pipelines will reduce the noise, dust and general commotion of energy activity and help North Dakotans co-exist more peacefully long term with a vibrant oil and gas industry.

As a public service commissioner, I work every day with my colleagues to regulate the pipeline industry in a way that promotes efficient, orderly and safe development and management of our state’s transmission pipeline infrastructure. It is a top priority for the PSC.

With the surge in Bakken oil production in the last five years, the PSC — like all state and local agencies — has worked to adapt our processes to best protect North Dakota people and places while also meeting the contemporary needs of business and industry.

We have consistently improved our siting and construction processes by:

•Hiring additional engineers to manage the growing workload.
•Creating a construction inspection program to employ third-party inspectors for every pipeline project who monitor construction and ensure high safety standards are met.
•Collecting GPS data on all the infrastructure we site for use in mapping, planning and monitoring.
•Simplifying the rules for making route changes during pipeline construction to best accommodate landowner requests without delays.
•Pushing companies to use best available technology for spill prevention and detection such as flow meters, pressure sensors, stop valves and cathotic protection.

We’ve also worked to better manage and protect this infrastructure with an aggressive damage prevention program spearheaded by Chairman Brian Kalk. Third-party strikes are the most common cause of pipeline leaks, and the PSC has cracked down on people causing them. We’ve levied nearly 30 fines against contractors for damaging underground infrastructure and during the last legislative session the PSC successfully increased the maximum fine from $5,000 to $25,000.

In addition to improving pipeline siting, construction and protection programs, we are working to enhance pipeline safety. The massive oil spill near Tioga last year revealed obvious shortcomings in the existing federal intrastate crude line inspection program. The PSC had no oversight of that line, but if the Legislature adopts our proposal, we will take over the federal program that failed to detect problems that could have prevented or minimized that disaster.

The PSC has a strong record of managing the safety of our in-state gas pipelines. It’s time to put this same approach to work on crude oil lines and have North Dakota state employees who are accountable to our citizens overseeing the safety of the growing crude oil pipeline network in our backyard.

To further enhance safety, I am proposing a state-run rail safety plan to supplement the existing federal program that has long-served our rail industry. High-profile accidents last year show the federal program is stretched too thin and not responding quickly enough to the demands of crude-by-rail transport. A state program will provide more inspectors on the ground every day to help oversee the 3,000 miles of track in our state. They will focus on the key problem areas and help identify safety issues on the track, rail bed, operations or other potential faults before they cause an accident.

With the rate of innovation occurring in North Dakota, every day presents a slightly different twist for regulators like myself to consider. It is a dynamic time that demands we seize every opportunity to improve our processes, oversight and infrastructure. We are always seeking ways to do this work better so infrastructure can more effectively serve the oil and gas industry, better supply vital energy commodities to our fellow Americans and co-exist safely with North Dakotans for many decades.

Fedorchak well ahead of opponent’s RAILS plan

From the Jamestown Sun article by Erik Burgess

In separate interviews Tuesday, Fedorchak and Kalk said they have been focused on rail and pipeline safety during their time on the commission. They both shrugged off the challengers’ claims as “just politics.”

“I’ve got a strong background of leadership, of leading in emergency response planning,” Kalk said. “My background in the Marine Corps was that way. So anybody that says we’re not taking the lead on that, I’d just let my record speak for that.”

Fedorchak said she is working with the Federal Railroad Administration on setting up a state rail inspection program, one that is “not just a proposal with a clever acronym,” and one that she believes has the support of Republican Gov. Jack Dalrymple.

Her program, she said, focuses on analyzing where accidents are frequently occurring and finding the root causes. She said she’ll push for the program in the next legislative session and has already started talks with legislators about how to budget for it.

“We’re well down this path already,” Fedorchak said. “I’m pleased that Tyler Axness is supportive because I fully expect he’ll be serving in the Senate after the election, and I look forward to working with him in tandem in his role there to support the rail safety program that we’re going to be proposing.”

PSC approves Belle Fourche pipeline

From the Bismarck Tribune Article by Nick Smith

A pipeline that will supply crude for a diesel topping plant under construction in southwest North Dakota was given the go-ahead this week by state regulators.

The three-member Public Service Commission unanimously approved a 20-mile pipeline project being proposed by Casper, Wyo.-based Belle Fourche Pipeline Co.

At 10 inches in diameter, the pipeline would pass through parts of Billings, Dunn and Stark counties. It would run parallel to an existing system where a 6-inch pipeline already is in place.

“This project … will provide 80,000 barrels to the Bakken Oil Express (rail hub),” Commissioner Julie Fedorchak said.

Total capacity of the pipeline would be 100,000 barrels of oil per day. The remaining oil would be supplying Dakota Prairie Refining, a 20,000-barrel-per-day diesel topping plant under construction. The Bakken Oil Express rail hub lies southwest of Dickinson alongside the Dakota Prairie Refining site.

The plant has been billed as the first refinery to be built in the United States since the 1970s. It’s a joint venture between MDU Resources and Indiana-based Calumet Specialty Products Partners.

The pipeline has an estimated $7.9 million cost and is expected to be built this summer. It would begin at Belle Fourche’s Skunk Hill Station near Belfield and run to the rail hub.

Commissioner Randy Christmann said the building of a refinery in the state was something that he remembered being a topic of discussion for the entire 18 years he was in the Legislature.

“North Dakota’s been waiting for this for decades,” he said.

Christmann said the Belle Fourche Pipeline Co. project was a small yet important component.

The pipeline will have a monitoring system in place to detect changes in pressure and flow. It will be watched 24/7 from the company’s monitoring center in Casper, Wyo.

PSC Okays Natural Gas Processing Plant

From the Bismarck Tribune Article By Nick Smith

BISMARCK, N.D. — A natural gas processing plant announced last year by a major natural gas company operating in North Dakota was given the green light by state regulators Thursday.

The North Dakota Public Service Commission unanimously approved the proposed 200 million cubic-feet-per-day Lonesome Creek natural gas processing plant.

Commissioner Julie Fedorchak put the construction cost of the plant at $280 million. The plant is to be located approximately 13 miles southwest of Watford City in McKenzie County.

Last fall, company officials announced the proiect in Bismarck as part of a new round of investment in the state.

Oneok officials estimated between 300 and 400 construction jobs will be created during the construction of the Lonesome Creek plant.

The Lonesome Creek project would be the company’s sixth natural gas plant either built or under construction in the state since 2010 and seventh overall. Once completed, Oneok’s total permanent employment at its plants is expected to be approximately 250.

Fedorchak said with the state trying to rein in the flaring of natural gas, the Lonesome Creek plant would help add processing capacity to the state’s infrastructure.

“This project keeps us moving in the right direction,” Fedorchak said.

At a public hearing in the spring, Fedorchak said all McKenzie County residents in attendance spoke favorably of the project.

“They seem very comfortable with how they operate,” Fedorchak said.

Fedorchak said the plant would require approximately 50 megawatts of power to operate.

Commissioner Randy Christmann expressed concern over the spiking demand for additional electrical power capacity in the state — especially in the oil patch.

“It just frustrates me that no base load power generation applications are coming in,” Christmann said.

He said he’s concerned about a growing reliance on wind power until more capacity is created through traditional energy sources. He has said on numerous occasions that he believes over-reliance on wind energy could create issues with reliability on the grid and increased costs to consumers.

Fedorchak noted that the grid does currently have capacity for the Lonesome Creek plant and will be serviced by a new substation to be built nearby.

Christmann said despite his concerns it’s tough to argue against a project that would rein in flaring, create jobs and bring in millions of dollars in investment. He called the project “an absolutely perfect home run.”

Reach Nick Smith at 250-8255 or 223-8482 or at nick.smith@bismarcktribune.com.