August 4, 2022
Docket No. CP22-51-000
I concur with the Commission’s decision to grant CNG HOLDING 1 LLC’s petition for a declaratory order, finding that its proposed compressed natural gas facilities and operations will not be subject to the Commission’s jurisdiction under Natural Gas Act (NGA) sections 3 and 7.[1]
I write separately to underscore the importance of the Commission’s timely action on petitions for declaratory order for jurisdictional determinations. I am pleased that the Commission has acted a little more than five and half months after the petition was filed. This has not been the case for all such petitions. As I explained in my separate statement in Golden Pass LNG, LLC,[2] there are pending petitions for declaratory order that have experienced inexplicable delays. Like the present case, these are proceedings in which parties are seeking declaratory orders to determine whether contemplated facilities will be subject to the Commission’s jurisdiction.[3] The answers to the questions posed in such petitions are fundamental—they drive investment decisions and financing terms. Without the certainty of the Commission’s declaratory orders, project sponsors cannot secure capital on commercially acceptable terms in this capital-intensive industry.
Project sponsors pay a fee of more than $30,000 when filing a petition for the issuance of a declaratory order.[4] Parties pay this fee because of the importance of legal and regulatory certainty. Often, projects cannot move forward if the project sponsor is not certain that the Commission will decline to assert jurisdiction over their contemplated facilities and delay in processing these requests can be gravely injurious: we have already seen proposed NGA section 7[5] projects which, had they been approved, could have delivered critical, desperately-needed natural gas, cancelled due to Commission inaction.[6]
In a particularly startling example, Bradford, a petition has been pending since September 18, 2020, a total of 685 days. The project in question is an inland liquefaction and rail/truck loading facility. It is hard to understand why we have allowed so much time to elapse when the contemplated project is located in the Northeast, a region suffering dire need for LNG as a result of the fuel constraints caused by inadequate natural gas pipeline infrastructure.[7] The Northeast faces imminent reliability crises, and yet we have not acted. The Commission has more than ample resources to make such jurisdictional determinations and to make them in a fraction of the time that has elapsed in Bradford.
It is my hope that the Commission’s upcoming New England Winter Gas-Electric Forum (Forum) (Docket No. AD22-9-000) will provide a better understanding of the “fuel procurement challenges” that the New England region has experienced “in past winters, including difficulties that market participants faced in securing natural gas from pipelines, LNG facilities, and fuel oil deliveries, particularly during scarce fuel supply conditions and high-demand, winter weather” and further, that the Forum will renew the Commission’s sense of urgency in providing legal and regulatory certainty through the prompt processing of NGA sections 3 and 7 applications and by making timely jurisdictional determinations.[8]
For these reasons, I respectfully concur.
[1] 15 U.S.C. §§ 717b, 717f.
[2] Golden Pass LNG Terminal LLC, 180 FERC ¶ 61,058 (2022) (Danly, Comm’r, concurring in the judgment at PP 7-10 & n.28) (stating that there have been long processing times in petitions for declaratory orders regarding contemplated liquefied natural gas (LNG) facilities, and two such examples are Bradford County Real Estate Partners LLC’s Petition for Declaratory Order Disclaiming Jurisdiction in Docket No. CP20-524-000 and Delaware River Partners LLC’s Petition for Declaratory Order Disclaiming in Docket No. CP20-522-000).
[3] See Bradford County Real Estate Partners LLC, Petition for Declaratory Order Disclaiming Jurisdiction and Motion for Expedited Action, Docket No. CP20-524-000 (Sept. 18. 2020) (pending for 685 days) (Bradford Petition); Delaware River Partners LLC, Petition for Declaratory Order Disclaiming Jurisdiction and Motion for Expedited Action, Docket No. CP20-522-000 (Sept. 11, 2020) (pending for 692 days).
[4] See 18 C.F.R. § 381.302(a) (establishing a fee for filing a petition for issuance of a declaratory order); see also id. § 385.207(a)(2) (“A person must file a petition when seeking: . . . A declaratory order or rule to terminate a controversy or remove uncertainty[.]”); id. § 385.207(c) (“Except as provided in § 381.302(b), each petition for issuance of a declaratory order must be accompanied by the fee prescribed in § 381.302(a).”).
[5] 15 U.S.C. § 717f.
[6] See, e.g., Adelphia Gateway, LLC, Withdrawal of Prior Notice, Docket No. CP21-14-000, at 2 (Oct. 12, 2021) (withdrawing a request to install and operate an additional electric-motor driven compressor unit at its already authorized Marcus Hook Compressor Unit because “as a result of the extension of the environmental review through the supplemental [Environmental Impact Statement] process and a prolonged Commission review process, the Project has been delayed well beyond Adelphia’s expectations and, more specifically, there is significant uncertainty regarding when an order will issue in this docket” and “[i]n light of this, Adelphia has decided not to continue the development of the Project”); Eastern Gas Transmission & Storage, Inc., Letter Withdrawing its Applications for the Mid-Atlantic Cooler Project, Docket No. CP21-97-000, at 1 (Sept. 20, 2021) (withdrawing an application for an NGA section 7 certificate—which had been filed nearly six months prior and had requested permission to build minor upgrades to three compressor stations in Pennsylvania and Virginia—because, “despite [the project’s] limited scope, the Commission has not taken action to prepare an Environmental Assessment”); Dominion Energy Transmission Inc., Withdrawal of Certificate Application for Sweden Valley Project, Docket No. CP18-45-000 (June 28, 2019) (withdrawing an application for a project that “involved limited facilities, including modification of an existing compressor station and the construction of two measuring stations, approximately five miles of pipeline and related ancillary facilities” because “the Project has been adversely impacted” and “[t]he Project customer has opted to terminate the requested transportation service” as a result of the Commission’s inaction on the application nearly ten months after the issuance of an environmental assessment).
[7] See Bradford County Real Estate Partners LLC, Supplemental Filing, Docket No. CP20-524-000, at 1 (Feb. 3, 2022). (“As Bradford explained in the Petition, [LNG] produced from the liquefaction operation at the Wyalusing Facility could be transported by truck to regional end-use customers or in ISO containers by rail to various ports for export or to the multi-use, deep-water seaport and industrial logistics center in Gibbstown, New Jersey (the ‘Gibbstown Facility’) where the LNG would be loaded into an LNG tanker for export.”); Bradford Petition at 4 (“The LNG from the Facility may also be delivered to local or regional customers by truck with the destinations and amounts determined by market demand and availability. For the trucking distribution process, LNG loading bays at the Facility will load product to ISO-tanker trucks. [New Fortress, which wholly-owns Bradford County Real Estate Partners LLC,] expects to sell directly to end users in these markets, which may include industrial customers or local distribution companies.”).
[8] FERC, Supplemental Notice of New England Winter Gas-Electric Forum, Docket No. AD22-9-000, at 4 (July 21, 2022); see also 15 U.S.C. §§ 717b, 717f.