Docket No. CP21-94-000
I support granting the Motion to Intervene Out of Time and to Lodge (“Motion to Intervene and Lodge”) jointly filed by the New Jersey Board of Public Utilities (“NJBPU”) and the New Jersey Division of Rate Counsel.[1] While the views of state officials are always due respectful consideration, in this case the position and views of the NJBPU are somewhat less than clear based on the history of this case. The NJBPU did not timely intervene to oppose this specific project (hence, the need for the Motion to Intervene Out of Time and Lodge). Nor does the NJBPU explicitly ask the Commission to reject this specific project, but only to accept a third-party study by London Economics[2] (“London Study”) that, as the Motion puts it, “will help the Commission determine whether New Jersey requires any additional natural gas pipeline capacity.”[3] While the NJBPU indicates it accepts the “findings” of the London Study, as best as I can determine, that study was a general study applicable statewide, not to this specific project. But even assuming the NJBPU is implicitly opposed to the project, the record does not indicate that the NJBPU submitted any information explaining why the local gas distribution companies (“LDCs”) in New Jersey, which entered into contracts to take natural gas supply from this pipeline — LDCs which the NJBPU regulates—were wrong to do so or could have obtained alternative sources of gas supply to serve their residential, commercial and industrial customers,[4] or would incur shipping costs that would be unreasonable or imprudently incurred or would be unnecessary to provide reliable service to customers. And, as the Order notes, New Jersey constitutes only about half of the need for the project, so the need issue is broader than one state.[5]
The London Study is one of three studies constituting part of the record in this case.[6] The London Study’s conclusions are at variance with another study, offered by the Applicant,[7] also presented on the question of need.
So the question is how much weight the third-party studies submitted herein should receive. I am aware that the Commission has encouraged the submission of such studies in certificate cases,[8] but, as I have noted before, a third-party study that has never been authenticated by a witness (such as the study’s author) who could testify and be subject to cross-examination under oath would likely not be admitted into evidence under standard rules of evidence in any judicial proceeding.[9] We generally accept, however, this type of evidence in FERC proceedings like this one,[10] which is legislative in nature, not judicial.
Weighed against the evidence from third-party studies in this proceeding is uncontested evidence that several shippers — unaffiliated with the pipeline developer — freely executed agreements to take service on the facility.[11] In fact, the precedent agreements cover 100% of the capacity of the REAE Project. Several of these shippers are LDCs that serve residential and commercial customers in New Jersey and executed agreements because they need the gas supply to serve their customers.[12] Meanwhile, as discussed in the Order, even while admitted to the record, each of the third-party studies suffers certain shortcomings that further limit their usefulness for aiding our decision-making.[13] The third-party studies submitted in this proceeding are conflicting, are part of the record but, on balance, do not outweigh the persuasive evidence of need represented by the executed agreements to take service.
For these reasons, I respectfully concur.
[1] New Jersey Agencies’ Motion to Intervene Out of Time and Motion to Lodge, Docket No. CP21-94-000 (filed Jul. 11, 2022).
[2] Analysis of Natural Gas Capacity to Serve New Jersey Firm Customers, London Economics International LLC (Nov. 5, 2021) (London Study), attached to In the Matter of the Exploration of Gas Capacity and Related Issues, Docket No. GO19070846 (Jun. 29, 2022) (NJ BPU Order) submitted with New Jersey Agencies’ Motion to Intervene and Lodge, Docket No. CP21-94-000 (filed Jul. 11, 2022).
[3] Motion to Intervene and Lodge at 1 (emphasis added).
[4] As noted in the Order (see PP 28-31), the London Study considers several alternatives on both the demand and the supply sides that are merely theoretical. It speculates, for example, that some of the NJ LDCs’ need could be met with technologies and infrastructure that are not presently available. See, e.g., London Study at 56 (“Green Hydrogen” is a potential solution that is “still in an early stage of development”); and 59 (“natural gas response programs are still in their infancy”).
[5] Order at P 28.
[6] The other two studies are the Skipping Stone Study submitted by EDF and the NJ Conversation Fund and the Levitan Study submitted by Transco. Each of the three studies is discussed in the Order. See Order at PP 21-35.
[7] Transco April 22, 2022 Response to Additional Information Request at Attachment 1D (Transco Levitan Study).
[8] See Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶ 61,227, p.61,748 (1999) (1999 Certificate Policy Statement) (“evidence necessary to establish the need for [a new] project will usually include a market study.”)
[9] See generally, Fed. R. Evidence Rule 802. Earlier this year, I stated, “ideally, a third-party report without a witness who can authenticate it and be cross-examined on it would not even be admitted as evidence in any serious evidentiary proceeding.” Midcontinent Independent System Operator, Inc., 179 FERC ¶ 61,124 (May 18, 2022) (Christie, Concurring). I added, “I recognize that the Commission sometimes conducts paper hearings. However, in such proceedings, parties at least can submit competing testimony and evidence.” Id. at n. 14.
[10] See, e.g., PJM Power Providers Grp. v. FERC, 880 F.3d 559, 563 (D.C. Cir. 2018) (declining to convene a live hearing to adjudicate between competing experts is within FERC’s discretion) (citing Minisink Residents for Envt’l Pres. & Safety v. FERC, 762 F.3d 97 114-15 (D.C. Cir. 2014) and Blumenthal v. FERC, 613 1142, 1144-45 (D.C. Cir. 2010)).
[11] See 1999 Certificate Policy Statement, 88 FERC ¶ 61,227 at p.61,748 (noting that precedent agreements will always “constitute significant evidence of demand,” and that when a proposed project “has precedent agreements with multiple new customers [it] may present a greater indication of need than a project with only a precedent agreement with an affiliate.”)
[12] See Order at P 21 (citing statements by various New Jersey LDCs supporting the need for the REAE Project in order to ensure reliability, promote operating flexibility, and provide rate stability to customers). To repeat, it is worth bearing in mind, as the Order notes, that New Jersey constitutes only about half of the need the REAE Project is intended to meet. Id. at P 28.
[13] Order at PP 21-35.