Bigger Blankets and Faster Steel: FERC’s May Commission Meeting

Originally published for customers May 22, 2026.

What’s the issue?

At the May meeting, the Commission issued a notice of proposed rulemaking (NOPR) exploring major blanket certificate program revisions and also extended temporary higher project cost thresholds through May 31, 2028.

Why does it matter?

The NOPR would expand the types of blanket-eligible projects while introducing new rate and disclosure requirements. It also seeks additional comment on protest standards.

What’s our view?

A final rule could change materially, but the Commission is clearly focused on closing the gap between actual infrastructure costs and historic blanket threshold adjustments without upending the program.

At the May meeting, the Commission issued a notice of proposed rulemaking exploring major blanket certificate program revisions and also extended temporary higher project cost thresholds through May 31, 2028. The NOPR would expand the types of blanket-eligible projects while introducing new rate and disclosure requirements. It also seeks additional comment on protest standards. A final rule could change materially, but the Commission is clearly focused on closing the gap between actual infrastructure costs and historic blanket threshold adjustments without upending the program.

A Blanket Benchmark

Before examining the NOPR’s details, it’s helpful to understand what results the temporary increases in cost thresholds have produced, particularly for the prior notice cost threshold. Since June 18, 2025 — when FERC temporarily waived its regulations to increase blanket certificate cost thresholds — 54 projects have filed prior notice requests. These projects comprise expansions, storage, abandonments and replacements, upgrades, and reductions, with estimated costs ranging from $0 to tens of millions, well beyond the previous $41.1 million cap. Of these projects, just four, or roughly 7%, targeted an in-service date of May 31, 2027, or sooner, which would have allowed them to take advantage of the temporary cost increase.

In From Paper to Pipe, What Recent Reforms Mean for Project Timelines, we noted that the practical value of the temporary waiver would gradually diminish as the previous May 31, 2027 sunset approached, because developers would have less time to actually construct projects under the higher thresholds before expiration. As shown below, just eight projects—seven reductions, one storage—have actually completed construction since FERC instituted the temporary waiver. The Commission’s extension addresses that issue directly by restoring a longer practical construction window. That article also discusses the rulemaking path.

Overview: Smaller Projects Faster Reviews

The core concept in the blanket program is efficient resource allocation within FERC. Allow staff to focus on larger, more environmentally complex projects, and channel reviews for lower-impact projects through less burdensome pathways. At a high level, the NOPR expands and modernizes that idea. Key provisions from the proposal include:

• Higher blanket certificate cost thresholds based on INGAA analysis
• Annual future adjustments using the Handy-Whitman Index instead of the GDP deflator
• A two-year in-service deadline instead of one year
• Disclosure of project beneficiaries
• Incremental rate options for certain projects
• Expanding automatic authorization applicability to include certain receipt points, and seeking comment on whether mainline projects should be included as well
• Removal of cost limits for prior notice compression projects within the facilities’ existing footprint

A Handy New Adjustment Tool for Construction Cost Thresholds

The core problem is that actual construction costs have risen faster than the formula the Commission has historically used to adjust cost thresholds. INGAA illustrated the disparity clearly, presenting data showing that 2006–2024 pipeline construction and compression costs increased by approximately 256% and 173% respectively, while blanket cost thresholds increased by only 50%. Three main options were discussed to address this:

1. The historic approach: based on the U.S. Department of Commerce’s Gross National Product implicit price deflator (GDP deflator).
2. The Handy-Whitman Index: an alternative price tracker focused narrowly on gas utility construction costs.
3. INGAA’s proposal: use Exhibit K data to calculate a three-year rolling average of median pipeline and compression costs.

The Commission proposes to adopt the Handy-Whitman Index, which, as discussed in FERC’s Own Data Says Raise the Limit, FERC previously declined to adopt because it is based on privately collected data that cannot easily be verified. In explaining its change of course, the NOPR states that the Commission no longer views this concern as sufficient to outweigh the Index’s advantages over the GDP deflator, particularly given the latter’s poor track record. The Commission declined INGAA’s proposal, citing administrative burden and implementation concerns. However, the Commission based the new thresholds on INGAA’s data, averaging pipeline and compression costs between 2006 and 2024 to arrive at:

• $86 million for prior notices
• $30 million for automatic authorizations
• $17 million for storage testing

The Beneficiary Pays

Another major theme was ratepayer protection. Under current policy, blanket certificate projects generally rely on assumptions that their costs are sufficiently minor to support rolled-in treatment. The Commission proposed three modifications to protect ratepayers from increased costs:

1. Allowing incremental rates for prior notice projects

Applicants would be required to provide rate calculations and supporting exhibits with their filings, giving Commission staff and protestors an opportunity to challenge the proposed rates during the notice period.

2. Requiring applicants seeking rolled-in treatment for certain mainline expansions to provide evidence that existing customers benefit from the project.

Commission staff or any other party would have the opportunity to protest.

3. Requiring pipeline companies to disclose beneficiaries of blanket projects.

During the meeting, staff explained that proposed disclosure requirements regarding project beneficiaries were intended to help protect shippers and ratepayers that may not directly benefit from a project but could otherwise bear some portion of the associated costs. The order states that this information would aid in future rate proceedings.

Protests to Limits on Protests

The Commission declined to adopt INGAA’s proposed tighter protest eligibility standards, which would have only allowed those with substantial economic interests, Commission staff, or affected landowners to protest. The Commission did, however, seek comment on whether more defined protest eligibility standards should exist in the future, particularly for protests based primarily on generalized objections rather than direct project impacts.

If you would like to discuss how blanket certificate reform could impact project timing, cost recovery, protest risk, or infrastructure development strategy, please contact us.