FERC Approves PennEast Petition Order

FERC Approves PennEast Petition Order

In October, “PennEast Pipeline Company, LLC (PennEast) filed a petition for a declaratory order (Petition) following a decision from the U.S. Court of Appeals for the Third Circuit (Third Circuit) in re PennEast Pipeline Company, LLC.” PennEast sought FERC’s interpretation of the ” scope of the eminent domain authority in section 7(h) of the Natural Gas Act (NGA).”FERC granted part of the petition and denied another part.

In 2018 FERC had “issued a certificate of public convenience and necessity for the PennEast Project,” and according to PennEast, “following issuance of the certificate, it was unable to reach agreement with the State of New Jersey to acquire easements for the portions of its proposed pipeline route that would cross land in which New Jersey holds a property interest. Consequently, PennEast instituted condemnation proceedings in the United States District Court for the District of New Jersey (District Court) in order to obtain these and other necessary easements.”

New Jersey “claimed property interests in forty-two parcels of land that PennEast sought access to via condemnation: two parcels in which New Jersey holds fee simple ownership interests, and forty parcels in which New Jersey claims nonpossessory property interests, including conservation easements and restrictive covenants mandating under state law a particular land use.”

The District Court rejected New Jersey’s argument and granted PennEast’s application. The court said that New Jersey’s “‘arguments would [have been] different if the United States government were pursuing eminent domain rights[,]’ the District Court found that PennEast ‘has been vested with the federal government’s eminent domain powers and stands in the shoes of the sovereign'”

After losing in District Court, New Jersey took the matter to the United States Court of Appeals for the Third Circuit, which found that “while the NGA delegates eminent domain authority to certificate holders, the text of ‘the NGA does not constitute a delegation to private parties of the federal government’s exemption from Eleventh Amendment immunity.'”

“Ultimately, the Third Circuit declined to ‘assume that Congress intended – by its silence – to upend a fundamental aspect of our constitutional design.'” PennEast filed their petition with FERC following this decision.

FERC Commissioner Richard Glick issued a statement of dissent regarding this matter:

In his statement, Glick said that he thought there was “no need for the Commission to insert itself into what is primarily a constitutional question that is being litigated where those questions belong: The federal courts. Nor is this an area where the Commission has the particular expertise the majority is so quick to claim. The NGA requires the Commission to determine whether an interstate pipeline is required by the public convenience and necessity. If the Commission finds that a proposed pipeline is so required, section 7(h) of the NGA automatically provides the pipeline developer eminent domain authority without any action or further involvement by the Commission.”

Glick says he disagreed with the majority’s belief that “Congress unambiguously intended section 7(h) to apply state lands. In my view, the evidence simply is not clear one way or the other. The majority’s confidence in its conclusion is better evidence of its own ends-oriented decision making than any unambiguous congressional intent.”

“The ‘evidence’ that the majority relies on to argue that the eminent domain authority in section 7(h) applies to state lands is, at best, inapt or susceptible to multiple interpretations. Even viewed as a whole and in a light most charitable to the majority, the evidence discussed in today’s order simply does not demonstrate a clear congressional intent one way or another. All today’s order proves is that the majority believes that certificate holders should be able to condemn state lands, not that Congress intended that to be the case.”

“The majority concludes by asserting that the Third Circuit’s decision will ‘have profoundly adverse impacts on the development of the nation’s interstate natural gas transportation system,'” Glick writes. “That discussion is, frankly, the most honest part of today’s order, as it reflects the majority’s belief that the Third Circuit’s decision is a bad outcome. But it is not clear just how ‘profound[]’ or ‘adverse’ those effects will actually turn out to be. That question depends on a number of factors that are difficult to predict in a vacuum.”

“If Congress disapproves of the Third Circuit’s decision, it can step in and remedy the situation. Congress has a long and well-documented history of responding to judicial decisions with which it disagrees, including decisions involving state sovereign immunity and the Eleventh Amendment. If the Third Circuit’s decision stands, Congress could, for example, amend section 7(h) of the NGA, attempt to validly abrogate state sovereign immunity under the NGA, or pursue measures, such as the “work-around” contemplated by the Third Circuit, to facilitate pipeline developers’ efforts to acquire rights-of-way over state land.”

FERC Issues Final EIS for the Bucks Creek Hydropower Project

FERC Issues Final EIS for the Bucks Creek Hydropower Project

The Federal Energy Regulatory Commission (FERC) issued its final Environmental Impact Statement (EIS) for relicensing “Pacific Gas and Electric Company and City of Santa Clara, California’s (co-applicants) existing 84.8-megawatt Bucks Creek Hydropower Project No. 619.”

The application for this project was filed in December 2016 and is ” located on Bucks, Grizzly, and Milk Ranch Creeks in Plumas County, California. The project consists of the Bucks Creek and Grizzly Developments and, as proposed, would occupy 1,316 acres of federal lands within the Plumas National Forest.”

There were a number of modifications proposed for the facilities:

“Install a Howell-Bunger valve at the end of the existing low-level outlet of Bucks Lake Dam to release the minimum instream flows into Bucks Creek.

“Cap or cover Milk Ranch Conduit Diversion No. 8 to prevent diversion of water from Bear Ravine.

“Enhance existing recreation facilities, including campgrounds, picnic areas, boat launches, day use areas, and trails at Bucks Lake, Lower Bucks Lake, and Grizzly Forebay, and construct a Bucks Lake Shoreline Trail and new facilities at the Bucks Lake Boat-In Campground.”

There were four primary issues that were associated with the project:

1.            “The protection of aquatic habitats including stream flows, water temperature, and recruitment of spawning gravel and woody material;

2.            “The protection of special-status wildlife species from human disturbance;

3.            “The need for additional recreational opportunities and facilities in the project area;

4.            “The protection of cultural resources.”

There are some “temporary minor, unavoidable, adverse effects on soil, geomorphic, water quality, aquatic, and terrestrial resources. Effects on geology and soil resources could include some temporary minor continued erosion associated with project operation, the renovation of recreation facilities, and interruption of sediment transport at project reservoirs. Most of these effects would be reduced by recommended resource enhancement measures, including implementation of the following plans and measures:

·                     “Erosion Management Plan;

·                     “Gravel Augmentation Plan;

·                     “passing large woody material at Bucks Lake, Lower Bucks Lake, and Grizzly Forebay Dams;

·                     “Hazardous Materials Management Plan.”

FERC “recommended the staff alternative” in the final EIS, “which consists of measures included in the co-applicants’ proposal, as well as most of the mandatory conditions and recommendations made by state and federal agencies and non-governmental organizations, and some additional measures developed by the staff.”

There may be further changes to the mitigation measures from other agencies once they have had the opportunity to review the final EIS.

FERC Issues Final EIS for the Magnolia LNG Production Capacity Amendment Project

FERC Issues Final EIS for the Magnolia LNG Production Capacity Amendment Project

The Federal Energy Regulatory Commission (FERC or Commission) issued its Final Environmental Impact Statement (EIS) for the “Magnolia LNG Production Capacity Amendment proposed by Magnolia LNG, LLC (Magnolia LNG).” Magnolia LNG had request authorization to “increase the liquefied natural gas (LNG) production capacity of the previously authorized Magnolia LNG Project in Calcasieu Parish, Louisiana… from 8 million metric tonnes per annum (MTPA) to 8.8 MTPA. The increased production capacity would be achieved through the optimization of Magnolia LNG’s final design, including additional and modified process equipment.”

“The equipment changes identified by Magnolia LNG in its application and supplements and/or determined by FERC staff via data requests include the following:

·         “increased ammonia compressor capacity and system pressures;

·         “increased number of ammonia air coolers;

·         “increased mixed refrigerant system operating pressure;

·         “additional ammonia/mixed refrigerant cooler;

·         “additional heavy hydrocarbon removal vessels and compressor;

·         “relocation of main flare stack; and

·         “addition of marine flare stack.”

FERC noted that the EIS was prepared following the “requirements of the National Environmental Policy Act (NEPA), the Council on Environmental Quality regulations for implementing NEPA in 40 Code of Federal Regulations, Parts 1500–1508 (40 CFR 1500-1508), and FERC regulations implementing NEPA (18 CFR 380).” FERC stated that the “U.S. Department of Energy, U.S. Coast Guard, and U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (USDOT PHMSA)” all aided in the preparation of the EIS.

FERC believes that “With the incorporation of the mitigation measures identified in the supplemental EIS, staff concludes the LNG terminal design would include acceptable layers of protection or safeguards that would reduce the risk of potentially hazardous scenarios from developing into an event that could impact the offsite public. USDOT PHMSA will issue a Letter of Determination regarding the facilities’ compliance with siting requirements for LNG facilities in 49 CFR 193 Subpart B.” The new facility would also “be subject to the USDOT PHMSA’s inspection and enforcement program.”

“FERC staff concludes that the modifications associated with the Production Capacity Amendment, with the additional mitigation measures recommended in the supplemental EIS, would continue to avoid or reduce impacts to less than significant levels.”

FERC Accepts NERC Performance Assessment, Bolsters Grid Reliability

FERC Accepts NERC Performance Assessment, Bolsters Grid Reliability

The Federal Energy Regulatory Commission (FERC) took action to ensure that the nation’s bulk power system remains secure and reliable by “approving two reliability standards and endorsing the continued work of the North American Electric Reliability Corporation (NERC).”

It was the Five-Year Performance Assessment for NERC, and FERC recognized that NERC has been developing and enforcing reliability standards and that it “continues to satisfy the criteria for certification as the [Electric Reliability Organization (ERO)] that is responsible for developing and enforcing the Commission’s mandatory reliability standards” and that the regional entities of NERC continue meeting their requirements as well.

NERC and the Regional Entities have made significant achievements over the last five years, including a risk-based approach to focus resources on matters of most significance to reliability,” FERC Chairman Neil Chatterjee said.

FERC found some areas of improvement for NERC: “the ERO’s periodic audits of the Regional Entities, its use of reliability and security guidelines to address risks, performance metrics and oversight of the Electricity Information Sharing and Analysis Center, sanctions guidelines and its organization certification program.”

NERC was also directed to “amend its Sanction Guidelines to provide more transparency into how it applies penalties, adjustment factors and non-monetary sanctions.” NERC must also submit ” any tools or formulas used to implement the guidelines” to FERC for review.

FERC also “approved reliability standards for Transmission System Planning Performance Requirements… and Cyber Security — Communications between Control Centers.” A Notice of Proposed Rulemaking was issued by FERC “that would approve NERC’s proposed retirement of 74 of the 77 Reliability Standards developed under NERC’s Standards Efficiency Review Project, which identifies standards that provide little benefit, are administrative in nature, or are redundant.”

The standards build on the “current standard by requiring a more comprehensive study of the potential impacts of protection system single points of failure. It also sets new requirements related to planned maintenance outages and stability analysis for spare equipment strategies.”

The new cyber standard will enhance the “current Critical Infrastructure Protection (CIP) standards on mitigating risks associated with communications between bulk electric system control centers. It requires responsible entities to protect the confidentiality and integrity of real-time assessment and real-time monitoring data transmitted between control centers.” NERC has also been directed to develop more “modifications requiring protections regarding the availability of communication links and data communicated between those control centers.”

Both of these new rules will go into effect 60 days after their publication in the Federal Register.

For more information on these rules and the NERC performance assessment, you can view them at:

Order E-20

Order E-21

Order E-22

Order E-24