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Lawsuit Claiming FERC Bias ‘Absurdly Broad,’ INGAA Says

Environmentalists alleging that FERC is biased towards approving natural gas pipelines because of the agency’s fee-based funding structure are “profoundly mistaken,” the Interstate Natural Gas Association of America (INGAA) told a federal court in a brief filed this week.

The trade group wrote to the the U.S. District Court for the DC Circuit asking it to grant the Federal Energy Regulatory Commission’s motion seeking to dismiss a lawsuit filed earlier this year by the Delaware Riverkeeper Network (DRN). DRN claimed FERC has a “structural bias” that violates the due process rights of pipeline opponents since the Commission is funded through fees from pipelines subject to its regulation (see Daily GPI, March 4).

DRN made a similar argument a few months earlier when it led a coalition urging lawmakers to investigate FERC over this alleged bias towards approving pipelines (see Daily GPI, Jan. 19). The claims are part of DRN’s ongoing effort to block the Pennsylvania-to-New Jersey PennEast Pipeline (see Daily GPI, Sept. 25, 2015). PennEast Pipeline Co. LLC, an intervenor defendant in the case, has also filed a motion to dismiss DRN’s lawsuit.

INGAA wasted little time attacking the green group’s claims of structural bias, noting that FERC’s funding mechanism is outlined under the National Budget Act and is consistent with how numerous other regulatory agencies defray costs by collecting fees from those they regulate. DRN’s claims are “absurdly broad; it would render many regulatory fees commonly imposed by federal, state and local governments constitutionally suspect and require a broad change to government funding across the nation,” INGAA wrote.

Approving a new pipeline does not increase FERC’s total funding, which is based on Congressional appropriations, and instead would result in slightly lower fees across all pipelines it regulates, INGAA said. “In addition, plaintiffs’ suggestion that FERC faces some realistic prospect that too few pipelines would remain in operation to support cost recovery, in the absence of biased decisionmaking, rests on a misunderstanding of the scale and dynamics of natural gas markets...”

DRN further lacks standing to challenge FERC’s funding under federal law, according to INGAA.

The group seeks to “manufacture standing...by asserting a range of broader issues with the Natural Gas Act and its administration” but is unable to demonstrate “concrete injury” resulting from FERC’s operation under federal law, INGAA wrote.

“Riverkeeper identifies only one member, Maya Van Rossum...and entirely fails to explain how Ms. Van Rossum’s alleged interest in ‘the aesthetic beauty of the river’ is concretely threatened with an ‘imminent future injury’ -- particularly given that FERC has not even approved the only pipeline application identified in the complaint, the PennEast Pipeline project,” the trade group wrote.

INGAA disputed DRN’s claims that FERC’s supposed bias is reflected in its high approval rate for natural gas projects.

“FERC’s frequent, eventual determination that a pipeline applicant’s application should be granted actually reflects the outcome of a process designed to implement the Natural Gas Act’s policies and to ensure that all relevant interests are advanced by a pipeline’s development to the maximum extent possible before the Commission makes a final determination regarding the pipeline,” INGAA wrote.

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