Commissioner James Danly Statement
February 17, 2022
Docket No. CP17-40-012
I concur in the Commission’s denial of the requested stay of Spire STL Pipeline LLC’s (Spire) temporary certificate. The Commission properly recognizes that it “would be inappropriate to have temporarily stayed the certificate pending rehearing”[1] and that “the Commission lacks authority to deny or restrict a certificate-holder’s exercise of the statutory right of eminent domain.”[2] I also concur in the Commission’s decision to wait until the issuance of an order on remand to address the questions raised in Environmental Defense Fund v. FERC,[3] including the questions concerning self-dealing.[4]
I dissent, however, from the Commission’s decision to again[5] decline to take a position on whether NGA section 7(h)[6] confers eminent domain authority on the holder of a temporary certificate issued under NGA section 7(c)(1)(B).[7] This question is different from the issues more amenable to disposition in our order on remand because it concerns the rights of Spire as a current holder of a temporary certificate, i.e., whether such a certificate confers upon its holder the right to exercise eminent domain under NGA section 7(h). This question is ready to be decided. In fact, today’s order acknowledges two recent federal district court cases holding that temporary certificates do confer eminent domain authority.[8]
The Commission is well-situated to speak in the first instance on the rights enjoyed by a temporary certificate holder under the statute that we administer. This question need not be left to others to decide. Requiring the parties to go to court in order to learn whether NGA section 7(h) confers eminent domain authority is irresponsible and unnecessary.[9] To leave this issue to the courts is to deprive both the courts and the litigants the benefit of a pronouncement by the Commission—regardless of how the Commission comes out on the matter—and the reasoned decision making required to support that pronouncement. The Commission implements NGA section 7 and some degree of deference is owed to the Commission’s reasonable interpretation of section 7(h).[10] At the very least, I expect the courts would be attentive to our thoughts on the matter.
The landowners and the Niskanen Center are correct: in declining to interpret NGA section 7(h), the Commission has once again “stuck its head in the sand.”[11]
For these reasons, I respectfully concur in part and dissent in part.
[1] Spire STL Pipeline LLC, 178 FERC ¶ 61,109, at P 13 (2022). I remain convinced that the Commission exceeded its authority in establishing the policy announced in Order Nos. 871-B and 871-C to presumptively stay Natural Gas Act (NGA) section 7(c) certificate orders. See Limiting Authorizations to Proceed with Constr. Activities Pending Rehearing, 176 FERC ¶ 61,062 (2021) (Danly, Comm’r, dissenting at PP 2-6) (Order No. 871-C); Limiting Authorizations to Proceed with Constr. Activities Pending Rehearing, 175 FERC ¶ 61,098 (2021) (Danly, Comm’r, dissenting at PP 6-12) (Order No. 871-B). Section 19(c) sets forth the rule—that “[t]he filing of an application for rehearing under subsection (a) shall not . . . operate as a stay of the Commission’s order”—and the exception to that rule—“unless specifically ordered by the Commission.” 15 U.S.C. § 717r(c) (emphasis added).
[2] Spire STL Pipeline LLC, 178 FERC ¶ 61,109 at P 14.
[3] 2 F.4th 953 (D.C. Cir. 2021).
[4] See Spire STL Pipeline LLC, 178 FERC ¶ 61,109 at P 17 (“We acknowledge the D.C. Circuit’s concern that the Commission did not adequately address potential self-dealing allegations in the Certificate Order; however, this issue has been remanded to the Commission and will be addressed when the Commission acts on remand on Spire’s pending certificate application.”). NGA section 7(c)(1)(B) states “[t]hat the Commission may issue a temporary certificate in cases of emergency, to assure maintenance of adequate service or to serve particular customers, without notice or hearing, pending the determination of an application for a certificate.” 15 U.S.C. § 717f(c)(1)(B) (emphasis added).
[5] See Spire STL Pipeline LLC, 177 FERC ¶ 61,147 (2021) (Danly, Comm’r, concurring in part and dissenting in part at PP 2, 7); Spire STL Pipeline LLC, 177 FERC ¶ 61,114 (2021) (Danly, Comm'r, dissenting at PP 7-17).
[6] 15 U.S.C. § 717f(h).
[7] Id. § 717f(c)(1)(B).
[8] See Spire STL Pipeline LLC 178 FERC ¶ 61,109 at P 11 (citing Spire STL Pipeline LLC v. 3.31 Acres of Land, No. 4:18 CV 1327 DDN (E.D. Mo. Nov. 23, 2021); Spire STL Pipeline LLC v. Jefferson, No. 18-cv-03204, slip op. (C.D. Ill. Oct. 27, 2021)). Assuming that NGA section 7(h) confers eminent domain authority upon temporary certificate holders, the Commission may not restrict such authority. See supra P 1 (agreeing with my colleagues that “the Commission lacks authority to deny or restrict a certificate-holder’s exercise of the statutory right of eminent domain”) (citation omitted); see, e.g., Twp. of Bordentown, N.J. v. FERC, 903 F.3d 234, 265 (3d Cir. 2018) (“The NGA, 15 U.S.C. § 717f(h), affords certificate holders the right to condemn such property, and contains no condition precedent other than that a certificate is issued and that the certificate holder is unable to ‘acquire [the right of way] by contract.’”); Berkley v. Mountain Valley Pipeline, LLC, 896 F.3d 624, 628 (4th Cir. 2018) (“Issuing such a Certificate conveys and automatically transfers the power of eminent domain to the Certificate holder. . . . Thus, FERC does not have discretion to withhold eminent domain power once it grants a Certificate.”) (citation omitted); Midcoast Interstate Transmission, Inc. v. FERC, 198 F.3d 960, 973 (D.C. Cir. 2000) (“Once a certificate has been granted, the statute allows the certificate holder to obtain needed private property by eminent domain. . . . The Commission does not have the discretion to deny a certificate holder the power of eminent domain.”) (citation omitted).
[9] Spire STL Pipeline LLC, 177 FERC ¶ 61,114 (Danly, Comm’r, dissenting at P 8).
[10] See PennEast Pipeline Co., LLC, 171 FERC ¶ 61,135, at P 20 (2020) (“Our interpretation of section 7(h) of the NGA, a statute we administer, merits deference.”) (citing PennEast Pipeline Co., LLC, 170 FERC ¶ 61,064, at P 15 (2020); City of Arlington v. FCC, 569 U.S. 290, 296, 307 (2013); Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 982 (2005); Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984) (Chevron)); PennEast Pipeline Co., LLC, 171 FERC ¶ 61,135 at P 22 (rejecting an argument that “the Commission does not ‘qualify for Chevron deference’ when construing NGA section 7(h)”); PennEast Pipeline Co., LLC, 170 FERC ¶ 61,064 at P 15 (“[O]ur interpretation of NGA section 7(h) merits deference. The Third Circuit’s ruling does not diminish the Commission’s authority to speak on a statute that we administer.”) (citations omitted).
[11] Landowners & Niskanen Center December 17, 2021 Request for Rehearing at 8.