trending Market Intelligence /marketintelligence/en/news-insights/trending/98cjzhyfjfonygkwltldca2 content esgSubNav
In This List

FERC turns down Constitution Pipeline request to get NY agency out of the way

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Using ESG Analysis to Support a Sustainable Future

Research

US utility commissioners: Who they are and how they impact regulation

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?


FERC turns down Constitution Pipeline request to get NY agency out of the way

In a case closely watched by industry and environmental groups, the Federal Energy Regulatory Commission refused a Constitution Pipeline Co. LLC request that the commission remove from the permitting process a New York agency that had denied a water permit to the 121-mile natural gas pipeline project. FERC said the agency had not run out of time in this case, as it did with a Millennium Pipeline Co. LLC project.

FERC on Jan. 11 denied Constitution's request that the commission find that the New York State Department of Environmental Conservation, or DEC, had waived its authority to issue Clean Water Act Section 401 certification for the project. FERC found that Constitution had restarted the clock on the one-year deadline for the New York agency to act by twice withdrawing and resubmitting its application for the water permit.

"By withdrawing its applications before a year had passed, and by presenting New York DEC with new applications, Constitution gave New York DEC new deadlines," FERC wrote. "The record does not show that New York DEC in any instance failed to act on an application that was before it for more than the outer time limit of one year."

The decision was bad news for those who support the Constitution pipeline as a northern conduit for Marcellus Shale gas. The pipeline project is backed by subsidiaries of Williams Cos. Inc., Cabot Oil & Gas Corp., WGL Holdings Inc. and Duke Energy Corp.'s Piedmont Natural Gas Co. Inc. It was good news for environmental groups and other pipeline opponents who have hailed New York's efforts to slow or stop the development of such projects within its borders.

Constitution applied to FERC in 2013 for the 650-MMcf/d pipeline project between Pennsylvania and New York, and the commission approved it in December 2014.

In August 2013, Constitution applied to the Department of Environmental Conservation for the water quality certificate. In May 2014, Constitution withdrew and resubmitted its application at the state agency's request, and in April 2015, Constitution did so again at the agency's request. The state agency denied the application in April 2016, saying Constitution had failed to provide enough information. Constitution looked for a review of the state decision before a federal appeals court, but the court said it did not have jurisdiction and upheld the state decision.

In October 2017, Constitution asked FERC to find that the state agency had waived its permitting authority because it failed to act in a reasonable amount of time. Constitution tried to argue that the state agency had engaged in "coercive state action" and "gaming" in threatening to deny the application and pressuring the company to resubmit. The agency countered that it did not force the company to withdraw and resubmit. FERC saw no reason to alter its position that one year is a reasonable time for action under Clean Water Act Section 401.

"We decline to do so because entertaining, on a case-by-case basis, challenges to a certifying agency's processing of a water quality certification would create uncertainty for both state certifying agencies and applicants, and is contrary to commission precedent in both hydroelectric and natural gas proceedings," FERC said. (FERC docket CP18-5)

The FERC finding could be a problem for National Fuel Gas Co., which has contested the DEC permitting process but gave the agency more time for its review.

In the Millennium case, FERC found that the state agency took longer than a year on its permitting decision for the company's Valley Lateral project. As a result, the commission waived the agency's authority to issue the Clean Water Act certification, allowing the project to move past the state's resistance.