On October 11, 2018, twenty-six pipelines submitted filings in compliance with Order No. 849 in response to a directive from FERC concerning the effect of reduced corporate income taxes on pipelines. Order No. 849 established a staggered filing schedule, so pipelines have between 28 and 84 days to submit “FERC Form No. 501-G,” depending on how FERC assigned the pipelines. The pipelines in the first category were required to file Form No. 501-G along with other information to inform FERC and the public of the impact of the recent reduction in federal income tax rates, as well as the effect of the Commission’s policy on the collection of federal income taxes by tax pass-through entities, on their revenue requirements.  Continue Reading Natural Gas Pipelines Submit Income Tax Compliance Filings

On September 21, 2018, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) ruled that FERC’s order to deny ANR Storage Company’s (“ANR”) request to charge market-based rates was arbitrary and capricious.  The D.C. Circuit found that FERC provided no basis for treating ANR differently from another competitor, DTE Energy Company (“DTE”) in a prior decision, and that FERC’s explanation for why intrastate facilities could not restrain ANR’s exercise of market power was internally inconsistent.  As such, the D.C. Circuit remanded the proceeding back to FERC. Continue Reading D.C. Circuit Overturns FERC Order Denying ANR Storage Market-Based Rate Authority

On August 31, 2018, FERC and the Pipeline and Hazardous Materials Safety Administration (“PHMSA”), an agency under the U.S. Department of Transportation (“DOT”), signed a Memorandum of Understanding (“MOU”) to coordinate the siting and safety review of FERC-jurisdictional Liquified Natural Gas (“LNG”) facilities. Continue Reading FERC, PHMSA Execute MOU on LNG Transportation Facilities

On September 4, 2018, the United States Court of Appeals for the Third Circuit (“Third Circuit”) declined to review Pennsylvania’s water permit approval of Transcontinental Gas Pipe Line Company’s (“Transco”) Atlantic Sunrise Project.  The Third Circuit ruled that it had jurisdiction to hear the state agency’s certificate decision on appeal even though the certificate decision was simultaneously being appealed to another Pennsylvania agency. Continue Reading Third Circuit Rejects Multiple Challenges to Pennsylvania Water Permit for Atlantic Sunrise Project

On September 5, 2018, the United States Court of Appeals for the Third Circuit (“Third Circuit” or “Court”) found that FERC did not violate federal law when approving Transcontinental Pipe Line Company, LLC’s (“Transco”) Garden State Expansion Project (“Project”).  The Third Circuit did, however, determine that the New Jersey Department of Environmental Protection (“NJDEP”) improperly denied requests for adjudicatory hearings on the issuance of various permits for the Project because the NJDEP misinterpreted the Natural Gas Act (“NGA”).  As such, the Third Circuit remanded back the permit issue so that NJDEP could reconsider those requests. Continue Reading Third Circuit Grants in Part Request to Review Transco Expansion Project

On July 25, 2018, the U.S. Court of Appeals for the Fourth Circuit (“Fourth Circuit”) affirmed the U.S. District Court for the Western District of Virginia’s (“District Court”) opinion rejecting landowners’ constitutional challenge provisions of the Natural Gas Act (“NGA”) regarding the natural gas pipeline certificate process.  Specifically, the Fourth Circuit agreed that the District Court lacked jurisdiction to review the complaint, finding that Congress intended the complaint to be brought before FERC instead. Continue Reading Fourth Circuit Dismisses Constitutional Challenges to NGA Pipeline Certificate Process

On July 18, 2018, FERC affirmed its Revised Policy Statement on Treatment of Income Taxes (“Revised Policy Statement”), where FERC stated that it will generally not permit master-limited partnerships (“MLPs”) to recover income tax allowance in their cost of service.  In doing so, FERC dismissed requests for clarification and rehearing of its Revised Policy Statement, reiterating that tax pass-through entities (including MLPs) that recover an income tax allowance in addition to a return on equity (“ROE”) based on the discounted cash flow (“DCF”) methodology double recover investors’ tax costs.  FERC did however explain that while pass-through entities may eliminate previously-accumulated sums of accumulated deferred income tax (“ADIT”) from their cost of service, they did not need to refund those ADIT balances to ratepayers.  Continue Reading FERC Affirms Policy on Income Tax Allowance for Gas Pipelines

On July 18, 2018, FERC issued Order No. 849, finalizing its procedures and regulations regarding the effect of reduced corporate income taxes on certain natural gas pipelines and their rates at FERC.  Notably, Order No. 849 requires interstate natural gas pipelines to submit “FERC Form No. 501-G,” an abbreviated cost and revenue study designed to illustrate the effect of reduced corporate tax rates, which FERC might then use to determine whether the pipeline’s rates may be unjust and unreasonable under the Natural Gas Act (“NGA”).  Continue Reading FERC Finalizes Procedures for Evaluating Income Tax Cuts on Gas Pipeline Rates

On July 10, 2018, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) rejected the Delaware Riverkeeper Network’s and its director Maya van Rossum’s (collectively, “Appellants”) claim that FERC is incentivized to approve new natural-gas pipeline certificates in order to secure itself future funding sources.  The D.C. Circuit also rejected Appellants’ challenge to FERC’s use of tolling orders to meet its statutory deadlines for taking action on rehearing applications. Continue Reading D.C. Circuit Rejects Challenges Alleging FERC Due Process Violations

On June 15, 2018, in separate opinions, the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) affirmed two FERC rulings that denied utilities’ requests to be made whole for purchasing natural gas at inflated prices to comply with their PJM Interconnection, L.L.C. (“PJM”) capacity resource obligations during the 2014 Polar Vortex.  Specifically, the D.C. Circuit upheld FERC’s holdings that (1) permitting the utility in one case to recover costs retroactively would violate the filed rate doctrine and the rule prohibiting retroactive ratemaking and (2) the utility in the second case was not entitled to indemnification for its losses resulting from PJM requesting the utility to comply with its capacity resource obligations. Continue Reading D.C. Circuit Affirms Denial of Recovery of Gas Purchase Costs During 2014 Polar Vortex