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

On June 12, 2018, FERC Commissioner Cheryl LaFleur, through a concurrence in an order denying rehearing (“Rehearing Order”), announced that going forward she will try to consider and disclose the upstream and downstream greenhouse gas (“GHG”) impacts of proposed pipeline projects, even if such information is generic and ignored, as part of FERC’s public interest determination.  In the Rehearing Order, Commissioner LaFleur calculated her own estimation of the total downstream GHG emissions as part of her environmental review in the proceeding, even though the majority did not. Continue Reading Commissioner LaFleur Calculates Downstream GHG Impacts of Pipeline Project in Concurrence

On May 24, 2018, the U.S. Department of Energy’s (“DOE”) Inspector General (“IG”) released an audit report of FERC’s natural gas pipeline certificate process, concluding that DOE “did not find any concerns that called into question the appropriateness of decisions FERC made on natural gas certification applications.”  The audit, which was conducted between October 2015 to May 2018, asked whether FERC’s certification process conformed to relevant laws, regulations, policies, and procedures, including timeliness and stakeholder input.  While DOE’s IG concluded that FERC generally performed the certification process in accordance with such laws and procedures, DOE’s IG also identified certain areas as needing improvement, including process transparency, public access to FERC records, tracking stakeholder comments, and data integrity. Continue Reading DOE Inspector Identifies Areas of Improvement in FERC Certificate Procedures

On May 18, 2018, FERC denied rehearing of its April 28, 2016 order (the “April 28 Order”) approving Dominion Transmission, Inc.’s (“Dominion”) New Market Project.  Notably, FERC held that it is not required to analyze the upstream and downstream impacts of a proposed pipeline project unless those impacts are considered cumulative or indirect effects within the meaning of the National Environmental Policy Act (“NEPA”).  Commissioners Cheryl LaFleur and Richard Glick dissented in part, instead finding that FERC is required to provide the public with information relating to the upstream and downstream impacts of a proposed project and stating that FERC should ask applicants to provide such information. Continue Reading FERC Limits Analysis of Upstream/Downstream Impacts of Proposed Gas Pipeline Projects

On May 4, 2018, the U.S. Court of Appeals for the Second Circuit (“Second Circuit”) dismissed a private suit filed by a group of investors (“Plaintiffs”) seeking damages for Total Gas & Power North America, Inc., Total S.A., and Total Gas & Power Limited (collectively, “Total”) for allegedly manipulating natural gas markets at four western trading hubs.  In doing so, the Second Circuit held that Plaintiffs – who did not trade at the four western trading hubs at which Total traded, but argued that Total’s trading impacted Plaintiffs’ trading at the Henry Hub – established constitutional standing but failed to plead sufficient facts to establish a plausible substantive cause of action. Continue Reading Second Circuit Dismisses Private Suit Against Total for Alleged Gas Market Manipulation

On April 24, 2018, the U.S. Court of Appeals for the D.C. Circuit (“D.C. Circuit”) held that FERC lacks jurisdiction over certain of the City of Clarksville, Tennessee’s (“Clarksville”) interstate sales of natural gas for resale, because the plain language of the Natural Gas Act (“NGA”) excludes sales by municipalities from FERC’s jurisdiction, which extends to interstate sales of natural gas for resale under NGA section 7. Continue Reading D.C. Circuit Holds that FERC Lacks Jurisdiction over Certain Interstate Gas Sales by Municipalities

On April 20, 2018, the New York State Department of Environmental Conservation (“NYSDEC”) denied the Transcontinental Gas Pipe Line Company, LLC’s (“Transco”) application (“Application”) for a Water Quality Certification (“WQC”) for the Northeast Supply Enhancement Project (“Project”).  The NYSDEC denied the Application without prejudice, asserting that the Application provided incomplete information upon which to make a determination.   Continue Reading New York Denies Water Permit for Transco’s Northeast Supply Enhancement Project

On April 19, 2018, FERC issued a Notice of Inquiry (“NOI”) seeking information regarding whether—and if so, how—to revise its policy for determining if a proposed natural gas pipeline is in the public convenience and necessity.  Specifically, the NOI requests information in four areas related to FERC’s policy for reviewing such certificate applications: (1) determining need for a pipeline project; (2) eminent domain issues; (3) evaluating environmental impacts, including greenhouse gas (“GHG”) emissions and climate change; and (4) changes that would improve the efficiency and effectiveness of FERC’s review. Continue Reading FERC Issues Notice of Inquiry into Pipeline Certificate Policy

On March 14, 2018 and March 15, 2018, FERC issued separate orders (1) reinstating the certificate for the Southeast Market Pipelines Project (“SMP Project”) and (2) authorizing DTE Midstream Appalachia, LLC’s (“DTE”) Birdsboro Pipeline Project.  In approving the projects, FERC held that determining the significance of the indirect effect of a pipeline on downstream greenhouse gas (“GHG”) emissions is not possible for purposes of FERC’s National Environmental Policy Act (“NEPA”) analysis, and that the Social Cost of Carbon tool is not appropriate for estimating a project’s downstream impacts in FERC’s NEPA analysis.  In partial dissents, Commissioners Cheryl LaFleur and Richard Glick asserted that GHG emissions estimates and the Social Cost of Carbon tool can inform FERC’s Natural Gas Act (“NGA”) section 7 evaluation. Continue Reading FERC Certificate Orders Address Estimates of Pipeline Impacts on Downstream GHG Emissions

On March 12, 2018, the U.S. Court of Appeals for the Second Circuit (“Second Circuit”) held that the New York Department of Environmental Conversation (“NY DEC”) waived its authority to act on Millennium Pipeline Company, L.L.C.’s (“Millennium”) application for a Clean Water Act (“CWA”) section 401 water quality certification by not acting on the application within one year of receipt.  In doing so, the Second Circuit rejected the NY DEC’s argument that the one-year statutory deadline begins when a state agency deems the application complete, rather than when the application is received. Continue Reading Second Circuit Affirms FERC Ruling that NY DEC Waived Authority on CWA Permit for Pipeline Project