Docket Nos. CP16-10-010, CP19-477-002, CP21-57-002
I concur with today’s decision to sustain the result of the Extension Order. However, I write separately to clarify the Commission’s standards for deciding requests for extensions of time (EOT) to complete natural gas projects and how they apply in this case. Commissioner Danly’s concurrence suggests all need-based arguments opposing a requested EOT constitute impermissible “collateral attacks” on the original certificate order or attempts to “reopen” the certificate order record.[1] Our EOT precedents do not support that position. Indeed, for the reasons explained below, in deciding whether to grant an EOT, the Commission is required to consider any credible information presented to it indicating the project is no longer needed.
At the outset, it is helpful to understand that an EOT request seeks to amend an important certificate condition that the Commission has found to be required by the public convenience and necessity under section 7(e) of the Natural Gas Act.[2] The Commission imposes deadlines in section 7 certificates “to ensure that the facts, analysis, and rationale regarding a particular proposal do not grow stale. If an applicant fails to construct the authorized facilities by the construction deadline, the certificate will lapse.”[3]
The completion deadline in a certificate order reflects what the Commission believes to be a reasonable period “within which the findings supporting our authorization can be expected to remain valid, for the project sponsor to conclude any necessary marketing efforts and complete construction and make the project available for service.”[4] The Commission has recognized that the “data that underpin our conclusions on the need for a project, its commercial prospects, and its environmental impacts are subject to change” and those conclusions therefore “cannot be sustained indefinitely.”[5] For these reasons, the Commission has often addressed as a threshold question in EOT proceedings whether changed circumstances undermine the conclusions supporting the Commission’s original certificate order—including those pertaining to project need.[6] In some cases, the Commission vacated the expiring certificate based on its assessment that, under current market conditions, the project was no longer viable.[7]
The Commission has never held that the issue of project need is somehow categorically off limits in EOT proceedings, nor could it lawfully do so.[8] The Commission imposes a project-specific deadline in a certificate order because it has determined that the public convenience and necessity requires it.[9] The Commission similarly must determine, consistent with its obligations under section 7 of the Natural Gas Act, whether a requested extension of that deadline is in the public interest.[10] Project need is a core element in determining public convenience and necessity.[11] Should the Commission fail to consider credible arguments or evidence in an EOT proceeding that a project is no longer needed, it would violate both its duty to protect the public interest under section 7 of the Natural Gas Act, as well as its obligation under the Administrative Procedure Act to engage in reasoned decision-making.[12]
In this case, the Commission was obligated to and did consider arguments and evidence that Appalachian Voices and NRDC properly raised in asserting that the MVP pipeline is no longer needed. Specifically, the Commission considered whether EQT’s recent resale of a portion of its contracted capacity on the pipeline or investors’ write-downs of their investments in the pipeline should change the Commission’s conclusion that the MVP pipeline is needed.[13] I concur with the Commission’s determination that this information is insufficient to show the MVP project is no longer needed. However, I strongly disagree with the suggestion that the Commission’s analysis of project need in the order is “mere surplusage.”[14] To the contrary, for the reasons I have explained, under both the Natural Gas Act and the Administrative Procedure Act, the Commission is obligated to consider Appalachian Voices’ and NRDC’s arguments predicated on changed circumstances.
It is perfectly proper for parties in an EOT proceeding to raise arguments and submit information showing that circumstances have changed so significantly since issuance of the certificate order that extending the project’s deadline is not in the public interest. The Commission must avoid reflexively invoking the phrases “collateral attack,” “relitigating the certificate order,” and “reopening the certificate record” as a substitute for seriously engaging with evidence and arguments that are properly raised in an EOT proceeding. Simply put, that is because the Commission does none of those things when it considers evidence of a change in circumstances that draws into question whether an expiring certificate remains in the public interest.[15] In discharging our statutory duties to protect the public interest and engage in reasoned decision-making, it is essential that we receive this information and carefully consider it in EOT proceedings.
For these reasons, I respectfully concur.
[1] See Mountain Valley Pipeline, 182 FERC ¶ 61,046 (2023) (Order) (Danly, Comm’r, concurring at P 2).
[2] 15 U.S.C. § 717f(e). The Commission’s regulations provide for the inclusion of certain standard conditions in certificates “as the Commission shall find [to be] … required by the public convenience and necessity.” 18 C.F.R. § 157.20 (2022). One of those conditions is that the authorized facilities be constructed and made available for service by a date specified in the certificate order. Id. § 157.20(b).
[3] Iroquois Gas Transmission Sys., LP, 104 FERC ¶ 61,307, at P 14 (2003) (citing KN Wattenberg Transmission Ltd. Liab. Co., 92 FERC ¶ 61,214 (2000)). The Commission establishes certificate deadlines to “diminish[ ] the potential that the public interest might be compromised by significant changes occurring between issuance of the certificate and the commencement of the project.” Const. Pipeline Co., LLC, 165 FERC ¶ 61,081, at P 9 (2018). Extending the deadline for an unneeded project can contravene the public interest in a variety of ways. For example, it may inhibit competition by discouraging other, more viable projects from being built in the same market. Chestnut Ridge Storage LLC, 139 FERC ¶ 61,149, at P 9 (2012). An unwarranted EOT may also unnecessarily impinge on the right of landowners to use their property in a way that would be incompatible with a project. Id. at P 10 (2012); Arlington Storage Co., LLC, 155 FERC ¶ 61,165, at P 10 (2016).
[4] Chestnut Ridge Storage LLC, 139 FERC ¶ 61,149 at P 8 (emphasis added) (upholding denial of extension of time based on lack of customers and project financing).
[5] Id. at n.9.
[6] See, e.g., id. at P 11; Delfin LNG LLC, 178 FERC ¶ 61,031, at P 14 (2022) (“Although under our precedent we may deny an extension of time based on changed market conditions, the record in this case does not support that result.”); Trunkline Gas Co., LLC, 179 FERC ¶ 61,086, at P 11 (2022) (“[W]e may deny an extension of time based on significantly changed market conditions.”); Corpus Christi Liquefaction Stage III, 179 FERC ¶ 61,087, at P 11 (2022) (“[A]n extension of time to construct a project may be denied where the record indicates that a project is no longer commercially viable. A change in commercial viability may constitute a significant change in the circumstances underlying the original public interest findings.”); Delfin LNG LLC, 181 FERC ¶ 61,144, at PP 9-11 (2022) (considering whether market need existed at the time of second extension request); Columbia Gas Transmission, LLC, 172 FERC ¶ 61,162, at P 16 (2020) (“[W]hen reviewing a request for an extension of time, the Commission considers whether our conclusions and environmental conditions are still valid.”); Algonquin Gas Transmission, LLC, 170 FERC ¶ 61,144, at PP 15-16 (2020) (finding no change in market need since the two-year requested extension did not disturb the fifteen-year precedent agreements in place but that the Commission could consider in EOT proceedings whether “environmental and other public interest findings underlying the Commission’s authorization” had remained valid since the initial certificate was issued) (emphasis added); Arlington Storage Co., LLC, 155 FERC ¶ 61,165 at PP 8, 14 (evaluating arguments in EOT proceeding that “market conditions have changed to an extent that there is no longer any need or demand for” the project). Commissioner Danly simply ignores these precedents in asserting the Commission has an “invariant policy” of never “revisiting” need in EOT proceedings. See Commissioner Danly Concurrence at P 3. Although it is true that the Commission does not “revisit” in EOT proceedings arguments and evidence it considered when issuing the certificate, the Commission most assuredly does consider changed circumstances in EOT proceedings, including those related to project need, as the cited cases demonstrate.
[7] See Chestnut Ridge Storage LLC, 139 FERC ¶ 61,149 at PP 25-26; Seneca Lake Storage, Inc., 122 FERC ¶ 61,212 (2008) (after Commission granted three EOTs, project sponsor acknowledged project was not commercially viable and requested certificate be vacated).
[8] Some of the cases Commissioner Danly’s concurrence cites did not even involve EOT requests. See Algonquin Gas Transmission, LLC, 178 FERC ¶ 61,029 (2022); Old Dominion Elec. Coop., 105 FERC ¶ 61,094 (2003); N. Nat. Gas Co., 113 FERC ¶ 61,060 (2005); Algonquin Gas Transmission, LLC, 174 FERC ¶ 61,126 (2021); United States v. Seatrain Lines, 329 U.S. 424 (1947). Moreover, the EOT cases on which Commissioner Danly relies are distinguishable. For example, in Midship Pipeline Co., LLC, 182 FERC ¶ 61,031 (2023), the petitioners opposed the requested EOT based on the project sponsor’s failure to meet the restoration conditions in its certificate; they did not allege changed circumstances relating to the Commission’s public convenience and necessity determination. The Commission had previously decided to address the restoration issues through a separate show cause proceeding and other measures. In Corpus Christi Liquefaction Stage III, LLC, 179 FERC ¶ 61,087, opponents’ arguments relevant to the Commission’s public interest determination largely revolved around new tools for evaluating greenhouse emissions associated with the project, rather than any assertion of a change in the projected emissions beyond what the Commission had considered when approving the project.
[9] See 18 C.F.R. § 157.20.
[10] See Altamont Gas Transmission Co., 75 FERC ¶ 61,349, at P 3 (1996).
[11] See Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶ 61,227, at pp. 17-19 (1999), clarified, 90 FERC ¶ 61,128, further clarified, 92 FERC ¶ 61,094 (2000).
[12] Cf. Envtl. Def. Fund v. FERC, 2 F.4th 953, 975 (D.C. Cir. 2021) (certificate order vacated based on Commission’s failure to “seriously engage” with evidence challenging project need); Vecinos Para El Bienstar de la Comunidad Costera v. FERC, 6 F.4th 1321, 1331-32 (D.C. Cir. 2021) (Commission decision granting certificate found arbitrary and capricious under Administrative Procedure Act and remanded based on agency’s failure adequately to address arguments relating to project’s impacts on climate change and environmental justice communities).
[13] Order at P 22.
[14] Commissioner Danly Concurrence at P 2.
[15] See Transcon. Gas Pipe Line Co., LLC, 175 FERC ¶ 61,148, at PP 5, 12, 18 (2021) (distinguishing between improper re-litigation of the initial certificate and assertions that “circumstances have changed” since the initial certificate that demonstrate the certificate has become stale and is no longer in the public interest); Mountain Valley Pipeline, LLC, 173 FERC ¶ 61,026, at PP 17-19 (2020) (same). A “collateral attack” occurs when the time for seeking review of an earlier order has passed and an objection is aimed not at the order purportedly under review but instead at an earlier order. See Sacramento Mun. Util. Dist. v. FERC, 428 F.3d 294, 299 (D.C. Cir. 2005); Cent. Hudson Gas & Elec. Corp. v. FERC, 783 F.3d 92, 103 (2d Cir. 2015) (citing Sacramento Mun. Util. Dist. v. FERC, 428 F.3d 294, 298-99); see also Pacific Gas & Elec. Co. v. FERC, 533 F.3d 820, 825 (D.C. Cir. 2008) (“[A] challenge made outside of the statutory period is a collateral attack over which [the court has] no jurisdiction.”); Miss. Power & Light Co. v. Miss. ex rel. Moore, 487 U.S. 354, 375 (1988) (“The reasonableness of rates and agreements regulated by FERC may not be collaterally attacked in state or federal courts. The only appropriate forum for such a challenge is before the Commission or a court reviewing the Commission’s order.”). It is demonstrably not a “collateral attack” to challenge a requested EOT based on changed circumstances that could not have been considered when the original certificate order issued.