On May 23, 2017, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) held that FERC did not violate the Clean Water Act (“CWA”) by issuing Transcontinental Gas Pipe Line Company, LLC (“Transco”) a certificate of public convenience and necessity (“CPCN”) before the state of Pennsylvania had issued a CWA § 401 water quality certification that must be obtained by a CPCN applicant prior to FERC approving any activity that may result in a discharge into navigable waters. In doing so, the D.C. Circuit held that FERC’s issuance of a CPCN did not violate the CWA because FERC’s CPCN order expressly conditioned FERC’s approval of potential discharge activity on Transco first obtaining the requisite CWA § 401 certification and because the CPCN itself does not authorize any potential discharge activity.
On September 30, 2013, Transco filed an application with FERC to construct and operate the Leidy Project, which would expand the capacity of Transco’s existing natural gas pipeline and add new facilities in Pennsylvania and New Jersey. In August of 2014, FERC Staff issued an environmental assessment (“EA”), finding that the Leidy Project resulted in “no significant impacts” to the environment, assuming Transco takes certain mitigating measures. The EA also required Transco to obtain “all applicable authorizations required under federal law” – such as state CWA § 401 water quality certifications – prior to FERC authorizing construction of the Leidy Project. In December 2014, before Pennsylvania issued Transco a CWA § 401 certification, FERC issued Transco a CPCN approving the Leidy Project. In its order issuing the CPCN, FERC stated that it would not authorize any construction until Transco had obtained a CWA § 401 certification from the state of Pennsylvania.
The Delaware Riverkeeper Network (“DRN”) requested rehearing of FERC’s CPCN order, arguing, among other things, that FERC violated the CWA because it issued Transco a CPCN prior to the issuance of Pennsylvania’s CWA § 401 certification. Specifically, DRN argued that the CWA prohibits FERC from granting a license or permit for an activity that “may result in any discharge into the navigable waters” until the applicant has obtained a state CWA § 401 certification, and that FERC’s issuance of a CPCN prior to Transco’s receipt of a CWA § 401 certification from Pennsylvania contravened this prohibition. After FERC denied DRN’s rehearing request, DRN petitioned the D.C. Circuit for review of FERC’s orders.
In its opinion, the D.C. Circuit held that FERC’s CPCN order did not authorize any activity that could result in a discharge; rather, the D.C. Circuit held that receipt of the CPCN merely was the first step for Transco to take in the procedure to obtain construction approval. Further, because the CPCN order expressly conditioned FERC’s approval of potential discharge activity on Transco first obtaining the requisite CWA § 401 certification, and because the CPCN order was not itself authorization of any activity that may result in a discharge, the D.C. Circuit concluded that issuance of the CPCN before Pennsylvania’s issuance of a CWA § 401 certificate did not violate the CWA.
A copy of the opinion is available here.