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More groups weigh in on key court fight over FERC gas pipeline process

Pipeline opponents on Jan. 17 offered new data to the U.S. Court of Appeals for the District of Columbia Circuit to support their assertions that interstate natural gas project construction is often well underway before they get a chance to challenge federal authorizations in court.

Their analysis comes as part of closely watched litigation that could have implications for gas project timelines and Federal Energy Regulatory Commission procedures.

Landowners and environmental groups are asking the court to rein in FERC's practice of tolling its decisions on requests for rehearing of orders authorizing projects. The practice, the opponents say, grants the agency an indefinite extension while challengers are denied due process and construction often proceeds.

Raising the stakes for FERC, the full D.C. Circuit has agreed to reconsider an August three-judge panel ruling that upheld FERC's orders and approach (Allegheny Defense Project, et al., v FERC, 17-1098).

A friend of the court brief filed on behalf of 16 conservation groups on Jan. 17 crunched the numbers on FERC project actions from 2009 to 2019. In 48 out of 61 cases in which projects faced challenges, FERC authorized construction activity while rehearing requests were still pending, the groups' analysis found.

In 21 of the 61 challenged cases between 2009 and 2019, natural gas projects were at least partially in service before FERC's final, reviewable rehearing decision, which allowed opponents or landowners to appeal the FERC orders in court, according to the analysis.

Prior efforts to challenge the tolling order practice have fallen flat. FERC noted in court filings that the D.C. Circuit and every other court to consider the issue have long held that the Natural Gas Act allows the commission to issue tolling orders.

FERC has also contended that parties have the ability to file a mandamus action designed to preserve the integrity of future judicial review.

In the August D.C. Circuit ruling in this case, upholding FERC orders on Williams Cos. Inc.'s Atlantic Sunrise project, the three-judge panel concluded that circuit court precedent foreclosed the homeowners' due process claims regarding tolling orders. But Judge Patricia Millett's concurring statement argued for a second look at the precedent and assailed FERC's practice as putting homeowners in a "seemingly endless administration limbo" while energy companies plowed ahead seizing land and constructing the pipeline.

Soon after that ruling, FERC in September appeared to respond by announcing it will reallocate resources in an effort to issue within 30 days rehearing orders implicating landowner rights.

The case has drawn interest, and amicus briefs, from a coalition of states as well as from other environmental groups and from landowners whose properties were affected by other pipelines across the country.

On Jan. 17, a group of 11 states and the District of Columbia filed a joint amicus brief, arguing FERC's tolling order practice not only undermines their residents' right to due process but in other contexts interferes with states' sovereign right to adopt important policies determining their own energy resource mix, or to protect pipeline development traversing state-owned conservation lands.

The states' brief, led by Maryland, pointed by way of example to FERC action on the PJM Interconnection capacity market. The states noted that FERC failed to rule on rehearing requests related to a June 2018 order on the matter, before FERC in December 2019 expanded what is known as PJM's minimum offer price rule to new resources entitled to state subsidies.

"[B]ecause the capacity market signals the need for future investment in generation resources and aids many states' resource planning, the harm to states would constitute irreparable injury to sovereign interests," they wrote. Given FERC's tolling order practice, it is unclear when states will have access to the courts to challenge the commission's affront to their energy policies, they added.

Williams separately has argued that fast-tracking judicial review of FERC's decisions by disallowing the use of tolling orders does not guarantee review will occur prior to property takings because "Congress did not condition the exercise of eminent domain on anything other than issuance" of a certificate order.

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.