As pipeline opposition groups challenge the concept of tolling orders, the Federal Energy Regulatory Commission denied requests that it reconsider such an order giving it more time to decide whether to hold a rehearing of its approval of PennEast Pipeline Co. LLC's 1.1-Bcf/d natural gas pipeline.
The commission denied on May 30 a request from the Delaware Riverkeeper Network for a rehearing of a tolling order and a request from the Sourland Conservancy that the commission strike the same order. In early 2018, the groups, along with many other parties, asked FERC for a rehearing of the project's authorizing certificate order for PennEast. In February, FERC issued a tolling order, which grants the commission an indefinite time to consider a rehearing request beyond the mandatory 30-day period. FERC issued a second tolling order in April.
Delaware Riverkeeper and Sourland Conservancy argued that the tolling orders go against the idea of a timely review by the commission, especially because they allow the pipeline developer to proceed with eminent domain requests and construction while the rehearing process stalls.
FERC disagreed, saying the tolling order was just a procedural move that affords the commission additional time. "Here, approximately [30] requests for rehearing of the January order have been filed raising a host of purported errors," FERC wrote. "The commission is obligated to respond meaningfully to the matters raised therein. Doing so will, of course, require considerable time beyond that afforded by the 30-day period."
One of the Democrats on the commission, Commissioner Richard Glick, agreed with the decision to deny the groups' requests, but in a separate statement called on the commission to acknowledge the need for urgency in responding to rehearing requests. Glick, who had dissented from the vote that authorized the project, said when FERC issues a tolling order, it must address the merits of the rehearing request as quickly as possible to protect the public, especially when the public need for a project is called into question.
Otherwise, Glick said, "Landowners, communities, and the environment may suffer needless and avoidable harm while the parties await their opportunity to challenge the commission's certificate decision in court."
Even as the FERC actions keep opponents' challenges on hold, Height Capital Markets energy analyst Katie Bays said the project might still have trouble in New Jersey. She pointed to the facts that Gov. Phil Murphy campaigned on rejecting the pipeline, state legislators and regulators asked FERC to reconsider the certificate order, and the state's attorney general denied PennEast's offer to purchase the right of way through lands in which the state has an interest.
"In our view, that is a credible threat," Bays said.
The New Jersey Department of Environmental Protection also rejected PennEast's first application for a Clean Water Act Section 401 permit because of missing survey data. The developer is expected to resubmit the application, but Bays observed that a FERC certificate order is no longer a guarantee that a project will be built.
"At the end of the day, New York has provided a blueprint for how to reject pipelines, specifically how to reject pipeline 401 certificates, and I think that if that's the model New Jersey wants to follow, they can follow it. You've got enough court cases now, you've got enough FERC decisions now, to say that there is not a whole lot anyone is going to do to stop you if you decide you that you want to reject the pipeline," Bays said.
PennEast has said the challenges from New Jersey have blocked potential cost savings of about $435 million for energy consumers in New Jersey and eastern Pennsylvania during the 2017-2018 winter season that could have been realized if the project was in service. The project is a joint venture of affiliates of Enbridge Inc., Southern Co. Inc., New Jersey Resources Corp., South Jersey Industries Inc. and UGI Corp. (FERC docket CP15-558)
