Statement of Commissioner James P. Danly
January 11, 2023
CP21-94-000
I concur in the decision to grant Transcontinental Gas Pipe Line Company, LLC’s (Transco) requested Natural Gas Act (NGA) section 7[1] authorizations. As in other recent NGA section 7 issuances, there are a number of flaws in this order. I have written about all of these problems extensively.[2] Here, I will focus on three elements of today’s order which require particular attention: (1) the order’s assessment of project need; (2) its stay of the certificate; and (3) its unlawful grant of late interventions.
First, I dissent from this order’s reasoning in reaching its determination of project need. This order departs from Commission policy in how we assess need when reviewing an NGA section 7 application. The Commission states that “in considering all evidence in the record, including each of the studies and the binding precedent agreements for 100% of the project capacity, the Commission finds that the construction and operation of the project will provide more reliable service on peak winter days and will increase supply diversity.”[3] Yes, other evidence can be considered,[4] but under the Commission’s current policy, precedent agreements are by far the most objective evidence that can be introduced concerning need. I fear that this language could perhaps be read to imply that the precedent agreements for 100% of a project’s capacity (by primarily unaffiliated shippers, no less) might, by themselves, be insufficient to demonstrate need or, perhaps more troubling, that other evidence proffered in the face of such precedent agreements, somehow tip the evidence against a finding of need. This would mark a departure from our longstanding precedent and application of the Certificate Policy Statement.[5] To the extent that this is what is intended, the order has a problem: the Commission has not even attempted to explain its departure—an obvious violation of the Administrative Procedure Act. As a reminder, “[a]n agency may not . . . depart from a prior policy sub silentio or simply disregard rules that are still on the books.”[6]
Second, I dissent from the Commission’s decision to stay the certificate’s effectiveness.[7] The order stays the certificate under the policy established in Order No. 871-B, which provides that 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.[8] I dissent from this order’s application of that policy, as a general matter, for the same reasons as stated in my dissents to Order No. 871-B[9] and Order No. 871-C[10] and in a number of prior separate statements.[11]
In addition, I dissent from the decision to stay the effectiveness of the certificate based on the facts in this particular case. I cannot understand why my colleagues did not ultimately decide that the circumstances here overcome the presumptive stay policy established under Order No. 871-B and Order No. 871-C. If such a “presumption” cannot be overcome in these circumstances, when could they?
As the order recognizes, this project will provide more reliable service to the local distribution companies which deliver a critical commodity that is needed for home heating and for electric generation throughout the region.[12] Transco has explained that a delay in authorization could “threaten [their] ability to meet critical construction windows established to protect certain threatened and endangered species” and that “[m]issing those construction windows would delay construction and postpone the in-service date by up to 12 months, preventing this vital (and fully subscribed) natural gas pipeline capacity from being placed into service in time for the 2023-2024 winter heating season.”[13] For that reason, the Commission should have considered the factors that are normally considered in staying an order[14] and should have refused to implement the stay because such a stay would be contrary to the public interest.
The project sponsor already indicated that if it misses “critical construction windows,” it could result in a delay of up to 12 months for the project to go into service. As explained in the application, “[b]y increasing gas supply access along Transco’s existing Leidy Line, the Project will support overall reliability and diversification of energy infrastructure in the Northeast, eliminating peak day constraints currently caused by limited pipeline takeaway capacity” and “the Project will benefit the public by promoting competitive markets and enhancing the security of natural gas supplies to major delivery points serving the Northeast.”[15] Additionally, I understand from Commission staff that Transco coordinated with the U.S. Fish and Wildlife Service Pennsylvania Field Office and the Pennsylvania Game Commission to develop project conservation measures to protect federally-listed and state-listed bat species and that these measures include a restriction that requires that tree clearing occur between November 16 and March 31.[16] Has the Commission, in staying the certificate, all but guaranteed that this project—one that the Commission has already found to be required by the public convenience and necessity—will not go into service in time for the 2023-2024 winter season and by the targeted in-service date of December 1, 2023?[17] I remind the applicant that it is entitled under our stay policy to seek relief by requesting that the stay be lifted. And such a request for relief need not await rehearing; they need merely file a motion. Should they seek to avail themselves of their rights to challenge the stay, they would do well to consider filing such a request as soon as possible.[18]
Third, and finally, I dissent as to the granting of late motions to intervene filed by the New Jersey Board of Public Utilities and the New Jersey Division of Rate Counsel and the Aquashicola-Pohopoco Watershed Conservancy. In granting these interventions the Commission abandons its standard and states that the movants “have demonstrated that they each have an interest in this proceeding and granting the untimely motion will not delay, disrupt, or otherwise prejudice this proceeding.”[19] Notably missing from the determination to grant the late interventions is a finding that there was “good cause for failing to file the motion[s] within the time prescribed.”[20] These interventions were thus granted contrary to our regulations.
For these reasons, I respectfully concur in part and dissent in part.
[1] 15 U.S.C. § 717f.
[2] See, e.g., Gas Transmission Nw. LLC, 180 FERC ¶ 61,056 (2022) (Danly, Comm’r, concurring in the judgment at P 2) (discussing the breadth of the public convenience and necessity standard under the NGA); id. (Danly, Comm’r, concurring in the judgment at PP 3-4) (stating that the Commission should repudiate the eye-ball test established in Northern Natural Gas Company, 174 FERC ¶ 61,189 (2021)); id. (Danly, Comm’r, concurring in the judgment at P 3) (explaining that there is no standard by which the Commission could, consistent with our obligations under the law, ascribe significance to a particular rate or volume of greenhouse gas emissions).
[3] Transcontinental Gas Pipe Line Co., LLC, 182 FERC ¶ 61,006, at P 25 (2023).
[4] See, e.g., Spire STL Pipeline LLC, 181 FERC ¶ 61,232 (2022).
[5] See, e.g., City of Oberlin, Ohio v. FERC, 937 F.3d 599, 606 (D.C. Cir. 2019) (“[T]his Court has also recognized that ‘it is Commission policy to not look behind precedent or service agreements to make judgments about the needs of individual shippers.”’) (citation omitted); Minisink Residents for Envtl. Pres. & Safety v. FERC, 762 F.3d 97, 111 n.10 (D.C. Cir. 2014) (“Petitioners identify nothing in the policy statement or in any precedent construing it to suggest that it requires, rather than permits, the Commission to assess a project’s benefits by looking beyond the market need reflected by the applicant’s existing contracts with shippers. To the contrary, the policy statement specifically recognizes that such agreements ‘always will be important evidence of demand for a project.’”) (citation omitted); see also Myersville Citizens for a Rural Cmty., Inc. v. FERC, 783 F.3d 1301, 1311 (D.C. Cir. 2015) (explaining that “for a variety of reasons related to the nature of the market, ‘it is Commission policy to not look behind precedent or service agreements to make judgments about the needs of individual shippers.’ . . . In keeping with its policy, the Commission concluded that the evidence that the Project was fully subscribed was adequate to support the finding of market need.”) (citations omitted). But see Certification of New Interstate Natural Gas Pipeline Facilities, 88 FERC ¶ 61,227, at 61,747, corrected, 89 FERC ¶ 61,040 (1999), clarified, 90 FERC ¶ 61,128, further clarified, 92 FERC ¶ 61,094 (2000) (Certificate Policy Statement) (“Rather than relying only on one test for need, the Commission will consider all relevant factors reflecting on the need for the project. These might include, but would not be limited to, precedent agreements, demand projections, potential cost savings to consumers, or a comparison of projected demand with the amount of capacity currently serving the market. The objective would be for the applicant to make a sufficient showing of the public benefits of its proposed project to outweigh any residual adverse effects discussed below.”).
[6] FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009) (citation omitted).
[7] See Transcontinental Gas Pipe Line Co., LLC, 182 FERC ¶ 61,006 at P 85 & Ordering Para. (D).
[8] See Limiting Authorizations to Proceed with Constr. Activities Pending Rehearing, 175 FERC ¶ 61,098, at P 46 (Order No. 871-B), order on reh’g & clarification, 176 FERC ¶ 61,062 (2021) (Order No. 871-C).
[9] See Order No. 871-B, 175 FERC ¶ 61,098 (Danly, Comm’r, dissenting).
[10] See Order No. 871-C, 176 FERC ¶ 61,062 (Danly, Comm’r, dissenting).
[11] See, e.g., N. Nat. Gas Co., 178 FERC ¶ 61,203 (2022) (Danly, Comm’r, concurring in part & dissenting in part); Gulf S. Pipeline Co., LLC, 181 FERC ¶ 61,145 (2022) (Danly, Comm’r, concurring in part & dissenting in part at P 2).
[12] Transcontinental Gas Pipe Line Co., LLC, 182 FERC ¶ 61,006 at P 35 (“Project shippers note that the project capacity offers a more cost-effective means to satisfy their statutory obligations to provide safe, reliable, affordable, and clean natural gas service to heat homes and businesses than continued reliance on third-party peaking services in the face of growing demand.”) (citing South Jersey Gas Company and Elizabethtown Gas Company Apr. 30, 2021 Motion to Intervene and Comments at 5-6; New Jersey Natural Gas Company Nov. 9, 2022 Comments (urging the Commission to approve the project stating that it will improve reliability, ensure competitive pricing and price stability, and enhance operating flexibility); South Jersey Resources Group LLC Nov. 9, 2022 Comments (asserting that the project will help address current challenges including increased natural gas prices during the winter months for consumers in the Northeast and limited power generation supplies in some regions that hinder the ability to respond to extreme weather events); and South Jersey Gas Company and Elizabethtown Gas Company Nov. 9, 2022 Comments (stating the REAE Project is critical to ensure reliable and affordable natural gas supply for New Jersey in both the near and long term)).
[13] Transco November 8, 2022 Request for Commission Order for the Regional Energy Access Expansion Project at 1.
[14] See, e.g., Columbia Gas Transmission, LLC, 152 FERC ¶ 61,131, at P 51 (2015) (“The Commission considers several factors when evaluating applications for stay, including: (1) if there will be irreparable injury if a stay is not granted; (2) if any interested party will be substantially harmed by the stay; and (3) if the stay is in the public interest.”).
[15] Application at 6.
[16] See Transco July 1, 2021 Supplemental Information Filing.
[17] See Application at 13; New Jersey Natural Gas Company July 26, 2022 Supplementary Comments in Support of Transco Regional Energy Access Expansion Project at 2 (“Transco proposes to place the REAE Project in service by December 1, 2023 to meet the needs of consumers during the 2023/2024 winter heating season.”).
[18] See Transcontinental Gas Pipe Line Co., LLC, 182 FERC ¶ 61,006 at P 85 (“the project developer ‘may move to preclude, or lift, a stay based on a showing of significant hardship.’ The Commission will seek to act expeditiously on any such motion, should Transco pursue such relief.”) (citations omitted).
[19] Id. P 11.
[20] 18 C.F.R. § 385.214(d)(1)(i).