Commissioner James Danly Statement
March 24, 2022
Docket No. CP21-28-000
I concur in the Commission’s finding that “the public convenience and necessity requires approval” of Northern Natural Gas Company’s (Northern) request for authorization to expand the certificated boundary of its existing Redfield Storage Facility in Dallas County, Iowa.[1] I dissent from the Commission’s decision to “stay the effectiveness of the certificate granted . . . and thus the company’s ability to exercise any rights conferred by the certificate, during the 30-day rehearing period and pending Commission resolution of any timely requests for rehearing filed by landowners.”[2]
The Commission stays the effectiveness[3] pursuant to the policy established in Order No. 871-B, which provides that Natural Gas Act (NGA) section 7(c) certificates of public convenience and necessity will be presumptively stayed during the 30-day rehearing period and pending Commission resolution of any timely requests for rehearing filed by landowners, up until 90 days following the date that a qualifying request for rehearing may be deemed denied by operation of law.[4] For the same reasons as those stated in my prior dissents to Order No. 871-B[5] and Order No. 871-C,[6] I dissent in part from this order. I restate my view that the Commission has no authority to presumptively stay section 7 certificate orders.[7]
As a threshold matter, the Commission “is a ‘creature of statute,’ having ‘no constitutional or common law existence or authority, but only those authorities conferred upon it by Congress.’”[8] The applicable statute is the NGA, and the NGA does not grant the Commission the authority to stay the effectiveness of a certificate in order to prevent the certificate holder from exercising eminent domain.
The stay appears to be in tension with both NGA sections 7(e)[9] and 7(h).[10] How can such a decision be squared with the directive in NGA section 7(e) that “a certificate shall be issued to any qualified applicant therefor . . . if it is found . . . the proposed [project] . . . is or will be required by the present or future public convenience and necessity”?[11] Or with the well-developed body of law[12] and the Commission’s recent acknowledgement that “[c]ourts have repeatedly held that Congress did not give the Commission authority to deny or restrict a certificate-holder’s exercise of the statutory right of eminent domain with respect to a certificate issued pursuant to the procedures laid out in section 7(e)”?[13] The Commission does not provide an answer to these questions. But the Commission’s intent is evident: to stay the effectiveness of the certificate for the purpose of delaying Northern’s exercise of eminent domain.[14] I am sympathetic to aggrieved landowners. Nevertheless, the Commission is obligated to follow the law.
First, it is puzzling that the Commission in one breath states that the project is required by the public convenience and necessity and then at the same time declares that it is appropriate to stay the effectiveness of the certificate. If the Commission had any question as to the validity of its public convenience and necessity finding, the Commission should not have issued a certificate. But, having made the affirmative finding that the project is in the public convenience and necessity, the Commission has no basis to, at the same time, stay that decision solely because a landowner has filed a protest.
And the Commission asserts that the stay of the effectiveness of the certificate affects “the company’s ability to exercise any rights conferred by the certificate,”[15] which certainly includes right to exercise eminent domain. Simply put, the certificate will not go into effect and the rights that attend the issuance of a certificate will not attach until the 30-day rehearing period lapses (if there is no request for rehearing from a landowner) or up to 150 days after the Commission issues today’s order (if there is a request for rehearing from a landowner).[16] This cannot be reasoned decision making. The Commission has offered no explanation as to why it is appropriate to stay the effectiveness of a certificate for a project that it at the same time has found to be required by the public convenience and necessity.[17]
Second, I remain unconvinced that a presumptive stay can be reconciled with NGA section 19(c).[18] That section provides that “[t]he filing of an application for rehearing . . . shall not, unless specifically ordered by the Commission, operate as a stay of the Commission’s order.”[19] My colleagues may attempt to argue that the Commission is “specifically order[ing]” the stay of the certificate here.[20] Indeed, the Commission has an ordering paragraph that stays the effectiveness of today’s issuance.[21]
But while the Commission purports to order the stay in this individual certificate order, the Commission makes no effort to weigh the considerations that are normally taken into account in assessing whether it is appropriate to grant a stay.[22] Instead, the stay is justified solely on the basis that Ms. Diane L. Terrell, an affected landowner, protested Northern’s application.[23] That justification does not address any of the required factors for granting a stay and cannot satisfy the requirement that the Commission engage in reasoned decision making supported by substantial evidence.
For these reasons, I respectfully concur in part and dissent in part.
[1] N. Nat. Gas Co., 178 FERC ¶ 61,203, at P 36 (2022).
[2] Id. P 16.
[3] Id. P 37.
[4] See Limiting Authorizations to Proceed with Construction Activities Pending Rehearing, 175 FERC ¶ 61,098, at P 46 (2021) (Order No. 871-B), order on reh’g and clarification, 176 FERC ¶ 61,062 (2021) (Order No. 871-C).
[5] See Order No. 871-B, 175 FERC ¶ 61,098 (Danly, Comm’r, dissenting).
[6] See Order No. 871-C, 176 FERC ¶ 61,062 (Danly, Comm’r, dissenting).
[7] See Order No. 871-B, 175 FERC ¶ 61,098 (Danly, Comm’r, dissenting at P 7).
[8] Atl. City Elec. Co. v. FERC, 295 F.3d 1, 8 (D.C. Cir. 2002) (quoting Michigan v. EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)) (emphasis in original).
[9] 15 U.S.C. § 717f(e) (“a certificate shall be issued to any qualified applicant therefor . . . if it is found . . . the proposed [project] . . . is or will be required by the present or future public convenience and necessity.”).
[10] Id. § 717f(h) (“When any holder of a certificate of public convenience and necessity cannot acquire by contract, or is unable to agree with the owner of property to the compensation to be paid for, the necessary right-of-way . . . it may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such property may be located, or in the State courts.”).
[11] Id. § 717f(e).
[12] See, e.g., PennEast Pipeline Co., LLC, 174 FERC ¶ 61,056, at P 10 & n.17 (2021) (collecting cases).
[13] Spire STL Pipeline LLC, 178 FERC ¶ 61,109, at P 9 (2022) (citing Midcoast Interstate Transmission, Inc. v. FERC, 198 F.3d 960, 973 (D.C. Cir. 2000) (“The Commission does not have the discretion to deny a certificate holder the power of eminent domain.” (internal citation omitted)); Twp. of Bordentown, N.J. v. FERC, 903 F.3d 234, 265 (3d Cir. 2018) (stating that NGA section 7(h) “contains no condition precedent” to the right of eminent domain, other than issuance of the certificate, when a certificate holder is unable to acquire a 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.” (internal citation omitted))).
[14] See N. Nat. Gas Co., 178 FERC ¶ 61,203 at P 16 (“we will stay the effectiveness of the certificate granted herein, and thus the company’s ability to exercise any rights conferred by the certificate, during the 30-day rehearing period and pending Commission resolution of any timely requests for rehearing filed by landowners.”) (emphasis added).
[15] Id.
[16] See id. P 37, Ordering Para. (B) (ordering a stay of the effectiveness of the certificate “during the 30-day rehearing period and pending Commission resolution of any timely requests for rehearing filed by landowners, up until 90 days following the date that a request for rehearing may be deemed to have been denied under NGA section 19(a),” and “[i]f no request for rehearing is filed by landowners, the stay will automatically lift following the close of the 30-day period for seeking rehearing”).
[17] See Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)) (explaining that under the arbitrary and capricious standard, the Commission “must . . . articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made’”).
[18] See 15 U.S.C. § 717r(c).
[19] Id. (emphasis added).
[20] Id.
[21] See N. Nat. Gas Co., 178 FERC ¶ 61,203 at Ordering Para. (B).
[22] See, e.g., Const. Pipeline Co., LLC, 168 FERC ¶ 61,129, at P 44 (2019) (“In determining whether [to grant a stay], the Commission considers several factors, including: (1) whether the party requesting the stay will suffer irreparable injury without a stay; (2) whether issuing a stay may substantially harm other parties; and (3) whether a stay is in the public interest.”).
[23] See N. Nat. Gas Co., 178 FERC ¶ 61,203 at P 37.