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Greens Opposed to PennEast Pipeline Sue Over FERC ‘Bias’

In its latest effort to thwart the proposed PennEast Pipeline, environmental group Delaware Riverkeeper Network (DRN) is going after FERC, filing a lawsuit in federal court this week arguing that the regulatory agency is “biased toward approving jurisdictional natural gas pipeline projects” because of its funding structure.

DRN filed a complaint in the U.S. District Court for the District of Columbia circuit Wednesday challenging the neutrality of the Federal Energy Regulatory Commission’s process for reviewing and certificating natural gas pipelines, claiming that the volumetric fees FERC collects from pipeline operators creates a “structural bias...under which the Commission’s entire natural gas pipeline program is funded by the private companies that it is tasked with regulating.”

This alleged bias “violates the Due Process rights” of those attempting to challenge FERC’s approval of pipelines, DRN’s complaint asserts.

“Because the Commission is responsible for approving natural gas pipeline project applications to generate all of its budgetary income for the natural gas pipeline program, the Commission faces the impermissible ‘possible temptation’ to be biased toward approving jurisdictional natural gas pipeline projects, such as the PennEast Project, and favoring pipeline company interests regardless of the legitimacy of the opposition of, or justifiable need for, the project proposals,” according to DRN.

DRN made a similar argument earlier this year when it led a coalition urging lawmakers to investigate FERC over this alleged bias towards pipeline companies (see Daily GPI, Jan. 19).

This is not the first time DRN has gone after FERC, with the green group winning a federal appeals challenge in 2014 that argued FERC “impermissibly segmented its environmental review” of Tennessee Gas Pipeline’s Northeast Upgrade Project (see Daily GPI, June 6, 2014).

Recently FERC has found itself the target of increased protests and obstructionism as opponents of unconventional shale development and hydraulic fracturing have made the pipeline certification process an ideological battleground (see Daily GPI, Dec. 1, 2015; Nov. 2, 2015).

Meanwhile, those behind the PennEast Pipeline offered a response to the objections raised by opponents of the project in a FERC filing late last year (see Shale Daily, Nov. 20, 2015).

The 114-mile, 36-inch diameter PennEast would transport eastern Marcellus Shale gas to markets in Pennsylvania and New Jersey. The pipeline is a joint venture owned by AGL Resources Inc. unit Red Oak Enterprise Holdings Inc. (20%); New Jersey Resources' NJR Pipeline Co. (20%); South Jersey Industries' SJI Midstream LLC (20%); UGI Energy Services LLC's UGI PennEast LLC (20%); PSEG Power LLC (10%); and Spectra Energy Partners LP (10%). The partnership is managed by UGI Energy Services.

PennEast filed with FERC in 2015 and is anticipating a final decision on its application later this year.

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