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Rover Challenges FERC Response to Historic Home Demolition

Rover Pipeline LLC is appealing FERC's denial last month of a blanket certificate for routine construction activities, challenging the Commission's conclusions regarding the demolition of a historic home near a proposed compressor station.

Rover, represented by its general counsel along with attorneys from Norton Rose Fulbright US LLP and Gibson, Dunn & Crutcher LLP, filed a request for rehearing Monday [CP15-93] asserting that the Federal Energy Regulatory Commission had erred in denying Rover a blanket certificate under Part 157, Subpart F of the Commission's regulations.

The blanket certificate allows companies to go ahead with certain kinds of routine construction without applying for approval from FERC staff.

FERC issued a certificate order approving Rover on Feb. 2. In that order FERC denied the pipeline's request for the blanket certificate, a de facto sanction after Rover acquired and subsequently demolished the historic Stoneman House in Ohio without consulting the Commission. The house was located within the area of potential effects of Rover's proposed Mainline Compressor Station 1 and was eligible for the National Register of Historic Places.

After learning of the Stoneman House's demolition, FERC scrutinized Rover's actions as a potential violation of the National Historic Preservation Act (NHPA) and ultimately "determined that Rover had intentionally and adversely affected the historic property."

In its request for rehearing, Rover called FERC's basis for denying the Part 157, Subpart F blanket certificate "arbitrary and capricious."

Rover said FERC failed to show that the operator had demolished the home to intentionally avoid additional regulatory proceedings under the NHPA. The Commission further failed to address “contrary evidence” showing Rover notified state preservation officials prior to demolishing the Stoneman House, Rover said.

"Finally, even if the Commission had somehow made a supportable finding with respect to Rover's intent -- which it did not -- the remedy imposed by the Commission...does not follow, according to Commission precedent or as defined by any rule or law for a violation of the NHPA or the Natural Gas Act," Rover wrote.

The Stoneman House wasn't part of the project or "within the Project's footprint," the operator said. "Nor was the structure listed on any historic register -- it was merely 'eligible' for such listing. As such, Rover understood that there was no law, rule or regulation -- and [FERC] has pointed to none -- that forbade the removal of the structure located on private property, under private ownership and meant for private use, no matter how old it may have been."

The removal of the Stoneman House "does not in any way demonstrate that Rover intended to violate, or intends to violate in the future, the Commission's regulations or any applicable environmental regulation,” the operator wrote.

Rover's request for rehearing comes as FERC lacks a quorum to vote on rehearing orders. Under a delegation order issued prior to former Commissioner Norman Bay's departure, staff is authorized to issue tolling orders on rehearing requests to put them on hold until the Commission's quorum is restored.

Analysts with consulting firm ClearView Energy Partners have said the denial of Rover’s blanket certificate is not likely to affect its initial construction timeline but is likely to be more important once the pipeline is in service.

Rover, backed by Energy Transfer Partners LP, is on a tight schedule. The $4.2 billion, 3.25 Bcf/d project is fully subscribed and figures to have a big impact on Appalachian Basin producers that have been squeezed by limited takeaway capacity in recent years.

Rover aims to connect production areas in Pennsylvania, Ohio and West Virginia to interconnects with the Midwest Hub in Ohio, the Vector Pipeline in Michigan and the Dawn Hub in Ontario, Canada.

Rover has been clearing trees along the route, and last week, the project received the go-ahead from FERC to begin full construction, with a few limited exceptions.

During a recent 4Q2016 conference call, executives for Energy Transfer remained confident that the pipeline will begin partial service to Defiance, OH, by July 2017 and full service by November 2017, despite the prolonged FERC review process.

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