Gas Transmission Northwest, LLC Docket No. CP22-2-002
I dissent from today’s order denying rehearing[1] of the Commission’s initial order on rehearing[2] of the Commission’s decision to issue a certificate of public convenience and necessity to Gas Transmission Northwest, LLC (GTN) for its GTN Xpress Project.[3] I dissented from the Initial Rehearing Order for several reasons, including that the evidence the States offered from GTN’s rate case so undermined the Certificate Order’s public interest determination that the order could not be sustained.[4] I concluded that the Commission was obligated to grant rehearing and reconsider the Certificate Order after developing a complete record satisfying the requirements of the Administrative Procedure Act (APA).[5] The majority’s summary dismissal of the States’ request for rehearing of the Initial Rehearing Order[6] perpetuates the legal errors rendering the Certificate Order invalid and I dissent from that dismissal for all the reasons explained in my dissent from the Rehearing Order.
I agree with the States that the Gibbon Declaration bears on both the issue of project need and subsidization of the GTN XPress Project by existing customers, and therefore merits the Commission’s consideration.[7] The declaration reveals that all three of the precedent agreements for the project – which are the only evidence supporting the Commission’s need determination – may soon evaporate. All three agreements permit the shippers to terminate without penalty if the project is not placed in service by November 1, 2024.[8] But GTN “will likely not complete the Project” by that date.[9] That is because the project makes no economic sense for GTN unless it can get rolled-in rate treatment for compressor costs (thereby imposing the costs on existing customers) or renegotiate the precedent agreements to impose the costs on GTN’s counterparties, and both options will take significant time.[10] The Gibbon Declaration shows that the precedent agreements are highly conditional and may soon terminate. That is yet another reason the Commission should have not relied solely on the precedent agreements to establish need in this case.[11] Without the precedent agreements, there is nothing to support the Commission’s need determination.[12] Accordingly, the Gibbon Affidavit, by undermining the agreements’ probative value, “goes to the very heart of the case” and may well “change the outcome of the proceeding.”[13]
In my dissent from the Initial Rehearing Order I challenged the majority’s assertion that the Commission is incapable of determining the significance of the project’s greenhouse gas (GHG) impacts because (1) it reflected a final Commission decision that it cannot determine the significance of GHG emissions, despite the fact the Commission has never responded to comments in the GHG Policy Statement docket[14] addressing methods for doing so; and (2) it departed from previous Commission precedent without reasoned explanation, thereby violating the APA.[15] I dissent from today’s Rehearing Order for these same reasons. I further dissent because I agree with the States that the Commission had tools it could have used to assess project-related GHG emissions, including the Social Cost of Greenhouse Gas Protocol (SC-GHG Protocol).[16] In another recent dissent, I explained that the Commission’s continued refusal to use the SC-GHG Protocol in its decision-making rests on outmoded reasoning that ignores important recent policy and scientific developments.[17] My points in that dissent apply equally here.
For these reasons, I respectfully dissent.
[1] Gas Transmission Northwest, LLC, 187 FERC ¶ 61,177 (2024) (Rehearing Order).
[3] Gas Transmission Northwest, LLC, 185 FERC ¶ 61,035 (2023) (Certificate Order).
[4] Initial Rehearing Order, 187 FERC ¶ 61,023 (Clements, Comm’r, dissenting at P 21).
[5] Id.; see also 5 U.S.C. § 706(2)(A) (providing for agency action to be set aside where arbitrary, capricious, abuse of discretion, or otherwise not in accordance with law).
[6] See Rehearing Order, 187 FERC ¶ 61,177, at P 11.
[7] States Rehearing Request at 24-25 & n.6.
[8] Gibbon Declaration at P 3.
[9] Id. at P 15 (emphasis added).
[10] See id. PP 10, 11 (describing negotiating process), 12 (estimating it will take 18 months to resolve the rolled-in rate treatment issue in GTN’s rate case).
[11] See Initial Rehearing Order, 187 FERC ¶ 61,023 (Clements, Comm’r, dissenting at P 19) (“[W]here, as here, there is credible evidence undermining the probative value of precedent agreements, the Commission must look behind those agreements and consider that evidence in its public interest determination under NGA section 7.”).
[12] The Rehearing Order argues that the Gibbon Declaration “does not undermine the ‘concrete evidence of demand’ demonstrated by the precedent agreements.” Rehearing Order, 187 FERC ¶ 61,177 at P 14. But even if the precedent agreements alone could show project demand, GTN’s precedent agreements speak to market demand for transportation services at specifically negotiated prices. If, as Mr. Gibbon’s testimony suggests, GTN is unable to transport gas for shippers at the rates initially laid out in the precedent agreements, there is no evidence regarding demand at the new prices GTN might need to charge.
[13] See id. at P 13.
[14] Docket No. PL21-3.
[15] See Initial Rehearing Order, 187 FERC ¶ 61,023 (Clements, Comm’r, dissenting at P 21).
[16] See States Rehearing Request at 74, 79-84.
[17] Transcon. Gas Pipe Line Co., 187 FERC ¶ 61,024 (2024) (Clements, Comm’r, dissenting at PP 9-17).