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FERC Defends Tolling Orders Amid Avalanche of Gas Pipeline Rehearing Requests

FERC this week defended its use of tolling orders to stop the statutory clock on challenges to the certificates issued in the face of a slew of rehearing requests filed by natural gas pipeline opponents.

Specifically, the Federal Energy Regulatory Commission on Wednesday denied two challenges filed against the tolling orders it issued on dozens of requests for rehearing of the certificate order authorizing the PennEast Pipeline. The Delaware Riverkeeper Network (DRN) and the Sourland Conservancy had urged FERC to reconsider the tolling orders, arguing that the practice prevents timely judicial review and violates landowner rights by allowing condemnation proceedings to advance while broader certificate challenges are pending.

Under the Natural Gas Act, the Commission has 30 days to address requests for rehearing before they are deemed denied. FERC issues tolling orders to freeze the clock and extend the time it has to consider the applications. Pipeline opponents, however, have had little success in courts, as judges have been unwilling to entertain appeals until the FERC rehearing process, which opponents argue is elongated by the tolling orders, has been completed.

FERC spokeswoman Tamara Young-Allen stressed that all of the rehearing requests for the order authorizing PennEast are still pending, including one filed earlier this year by the New Jersey Department of Environmental Protection. She said an order on rehearing could be issued at any time. FERC issued the PennEast certificate order in January.

“The purpose of a rehearing is to afford the Commission an opportunity to review allegations of error in its decision,” FERC said In its order denying the tolling order challenges. “Here, approximately 30 requests for rehearing of the January order have been filed raising a host of purported errors. The Commission is obligated to respond meaningfully to the matters.”

Commissioners added that a tolling order is “merely a procedural ruling that affords the Commission additional time to consider the requests for rehearing,” and they don’t prohibit  requests for stays or interim relief from the courts. They added too that certificate orders are conditional and do not permit construction to begin until a pipeline has all the documentation and regulatory approvals it needs under federal law.

However, in a separate statement concurring with Wednesday’s order denying DRN and Sourland’s challenges, Commissioner Richard Glick said he had “serious concerns regarding the Commission’s practice of issuing conditional certificates -- which, notwithstanding their name, vest the pipeline developer with full eminent domain authority -- in cases where the record does not contain adequate evidence to conclude definitely that the pipeline is in the public interest.”

Glick dissented from the January order authorizing PennEast, when he questioned FERC’s reliance on affiliate precedent agreements in greenlighting the project. He noted, though, that Wednesday’s order on the tolling orders “affirms the Commission’s authority under the Natural Gas Act to toll the date for issuing a merits determination on a request for rehearing.”

PennEast would move more than 1 Bcf/d of gas from Northeast Pennsylvania to New Jersey. About one-third of the 120-mile pipeline would be in New Jersey, where the project is facing strong opposition from Democratic Gov. Phil Murphy’s administration, which has also filed a petition in federal court challenging the pipeline’s FERC certificate. The project is targeting a 2019 in-service date.

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