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New split emerges at FERC over water quality waiver for Constitution pipeline

The Federal Energy Regulatory Commission reaffirmed its order clearing away a New York regulatory roadblock for the proposed 650-MMcf/d Constitution Pipeline Co. LLC natural gas transportation project between Pennsylvania and New York, but Democratic Commissioner Richard Glick, changing course, has come out against the FERC action.

At issue is the New York Department of Environmental Conservation's April 2016 denial of the developer's application for water quality certification, which sidelined the Constitution project, triggered litigation and became a flashpoint in debate over New York Gov. Andrew Cuomo's blocking of gas pipeline projects as part of a broad climate policy stance.

Backed by pipeline company Williams Cos. Inc. and gas producers, the 124-mile Constitution pipeline project is designed to ship gas from northeastern Pennsylvania to interconnections with the pipeline systems of Iroquois Gas Transmission System LP and Tennessee Gas Pipeline Co. in upstate New York.

FERC findings

Helping to reopen a path for the project, FERC voted 4-0 in August to find that New York waived its water quality authority by exceeding the one-year time limit in which it must act under the Clean Water Act. In doing so, it cited a Jan. 25 decision from the U.S. Court of Appeals for the District of Columbia Circuit involving FERC, the Hoopa Valley tribe and a PacifiCorp hydropower project. (U.S. Appeals Court for the D.C. Circuit docket 14-1271)

FERC said the Hoopa Valley case meant that states will waive their Clean Water Act Section 401 authority if a project application is withdrawn and resubmitted to avoid the one-year time limit for state decisions and the state fails to act in that timeframe.

In its Dec. 12 order on rehearing in the Constitution case, FERC rejected arguments from the New York Department of Environmental Conservation and environmental groups that the commission's application of the Hoopa Valley decision was overly broad. (FERC docket CP18-5)

"The Hoopa Valley court noted that Section 401's text is clear; it sets a full year as 'the absolute maximum' period of time for state action," FERC said. The ruling led to the conclusion that the time limit is "unqualified" and does not allow exceptions raised by New York and other parties, FERC said.

The timing of state water quality reviews has been litigated not only in pipeline projects but also in hydropower licensing decisions reviewed by FERC.

Glick dissent

Glick acknowledged that he backed the original Constitution waiver. "But that was before the commission announced its policy that, for all intents and purposes, only a physical change to a proposed project could restart Section 401's one-year period," he wrote in his dissent, referring to the majority's approach in a decision involving McMahon Hydroelectric.

Glick called the Constitution case "difficult" and said further briefing is needed before FERC can decide one way or another. He suggested that parties submit more information on whether Constitution's filings rendered its request sufficiently different to constitute a new water quality application. In his view, the Hoopa Valley decision was a difficult case to apply because it expressly avoided addressing what happens when a developer changes its application before the one-year period lapses.

In the Constitution case, FERC was treating as immaterial the revisions, supplements and amendments that offered key technical details that may have been important to the state's ability to assess compliance such as how the pipeline would cross water bodies, Glick said. The commissioner also disagreed with the majority on whether to pause the development of the pipeline pending litigation.

Maya Weber is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.