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FERC Deals Constitution Another Blow, Declines to Waive New York Authority

FERC dealt another blow to the long-delayed Constitution Pipeline on Thursday, denying a petition for a declaratory order that the New York State Department of Environmental Conservation (DEC) waived its authority when it failed to issue a water quality certification (WQC) within a reasonable period of time.

The Federal Energy Regulatory Commission found that the DEC did not fail to act within the one-year timeframe required under the federal Clean Water Act (CWA) to issue a section 401 WQC. Constitution Pipeline Co. LLC filed its petition in October arguing that the DEC took too long to issue the permit. For years, FERC has consistently determined that the reasonable period of time for action under Section 401 of the CWA is one year after the date a certifying agency receives a request.

Constitution received a FERC certificate in December 2014. It initially filed for a WQC in August 2013, but withdrew and resubmitted its application twice, which DEC argued reset the one-year deadline it had to make a decision each time. Following about three years of review, the DEC ultimately denied the pipeline’s WQC.

“We reiterate that once an application is withdrawn, no matter how formulaic or perfunctory the process of withdrawal and resubmission is, the refiling of an application restarts the one-year waiver period under section 401,” FERC said in denying Constitution's petition. “...The statute speaks solely to a state’s action or inaction, not to the repeated withdrawal and resubmission of applications. By withdrawing its applications before a year had passed, and by presenting New York DEC with new applications, Constitution gave New York DEC new deadlines.”

Constitution had also urged FERC in its petition to look beyond the one-year test, arguing that the entire process at DEC amounted to “coercive state action” and “gaming” to delay the project. It requested that the Commission determine a reasonable period of time to be less than one year based on DEC’s actions and statements.

“We decline to do so because entertaining, on a case-by-case basis, challenges to a certifying agency’s processing of a water quality certification would create uncertainty for both state certifying agencies and applicants, and is contrary to Commission precedent in both hydroelectric and natural gas proceedings,” FERC said.  

Given the fights that have unfolded with other pipelines in the state and beyond as environmental opposition groups increasingly target natural gas infrastructure at the state level, the Commissioners expressed their alarm.

“We continue to be concerned, however, that states and project sponsors that engage in repeated withdrawal and refiling of applications for water quality certifications are acting, in many cases, contrary to the public interest and to the spirit of the Clean Water Act by failing to provide reasonably expeditious state decisions,” commissioners said. “Even so, we do not conclude that the practice violates the letter of the statute.”

Constitution filed its petition after the U.S. Court of Appeals for the Second Circuit denied its challenge to the DEC decision. It later filed a petition for a rehearing of the case en banc, which was denied.

“We are planning to seek rehearing and, if necessary, appeal of this decision in order to continue to develop this much-needed infrastructure project designed to bring natural gas to a region of the country that has recently experienced demand resulting in the highest natural gas prices in the world,” said Constitution spokesman Christopher Stockton. “Constitution remains committed to constructing and placing into operation this critical piece of energy infrastructure.”

The 124-mile pipeline would provide 650,000 Dth/d of takeaway capacity in northeast Pennsylvania. About 100 miles would cross New York. Constitution is backed by Williams, Cabot Oil & Gas Corp., Piedmont Natural Gas Co. Inc. and WGL Holdings Inc.

New York has been less than hospitable to the natural gas industry, denying WQC’s for Millennium Pipeline Co. LLC’s Valley Lateral project and National Fuel Gas Co.’s Northern Access expansion, which continues to fight through delays.  

FERC’s Thursday order was a slight deviation from one it issued in September that waived New York’s authority to issue the Valley Lateral’s WQC. But Commissioners held firmly to the letter of the law, finding that the DEC’s one-year period for review began when Millennium first submitted its application and not later when it received a complete application, as DEC had argued. 

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