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New York Asks FERC for Rehearing, Stay in Fight Over Millennium's Valley Lateral

Regulators in New York State have asked FERC for a rehearing and stay of its order last month that found the state took too long to consider issuing a water quality permit for Millennium Pipeline Co. LLC's proposed Valley Lateral Project, and had therefore waived their authority to issue the permit.

In a motion filed Friday, regulators with the New York Department of Environmental Conservation (DEC) told the Federal Energy Regulatory Commission [CP16-17] that it had erred in its finding last month that the DEC had waived its jurisdiction under Section 401 of the Clean Water Act (CWA) to a water quality certificate (WQC) for the project.

"Contrary to FERC's finding, the department did not waive its jurisdiction under the CWA because Millennium did not submit a complete WQC application to the department until Aug. 31, 2016," the DEC said. "The CWA does not indicate what form a 'request for certification' must take to trigger the one-year waiver period; rather, it 'is ambiguous regarding whether an invalid as opposed to only a valid request for a WQC will trigger' the waiver period."

According to the DEC, under FERC's interpretation of Section 401 of the CWA, a permit applicant could frustrate state regulators by first submitting a deficient or incomplete application, then waiting 364 days to address any shortcomings.

"Indeed, in this case, Millennium submitted a letter and affidavit demanding that the WQC be granted, along with more than 200 pages of exhibits, a mere eight days before the one-year anniversary of its initial application submittal," the DEC said.

Although the DEC could have denied Millennium's permit application for being incomplete before Aug. 31, 2016, as FERC suggested in their declaratory order, the state agency said such a move "would unnecessarily limit the options for the department and applicants when applications require additional information.

"Such a position would be inefficient and penalize both the department and an applicant by foreclosing the opportunity to work cooperatively to ensure that a given application contains all the necessary information for a department to render a decision on the merits."

FERC's order effectively reversed the DEC's denial of the WQC on Aug. 30, which came nearly two years after Millennium first filed its application.

During an industry conference earlier this month, FERC Commissioner Cheryl LaFleur said the Commission has seen an increase in opposition to natural gas pipelines at the state level. She said environmental groups opposed to unconventional production are using a new strategy that pits federal and state regulators against each other in an effort to stymie construction of natural gas infrastructure.

The Valley Lateral Project would deliver about 130 MMcf/d to Competitive Power Ventures' (CPV) 680 MW Valley Energy Center plant under construction in Wawayanda, NY. It calls for constructing a 16-inch diameter pipeline that would run about eight miles to the facility, which already has the necessary permits to begin operations. CPV has said that without the lateral it would burn ultra-low sulfur diesel to generate electricity.

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