The New Jersey Division of Rate Counsel (NJDRC), the state’s utility consumer advocate, took its opposition to the PennEast Pipeline Project to federal court this week, challenging FERC’s certificate in a petition submitted to the U.S. Court of Appeals for the Third Circuit.
NJDRC’s appeal comes after it challenged PennEast during the Federal Energy Regulatory Commission review process, arguing that the project is not needed based on forecasts submitted to Pennsylvania and New Jersey regulators by local distribution companies (LDC) [CP15-558].
PennEast responded with a report from Concentric Energy Advisors that countered the NJDRC’s findings. According to that report, NJDRC’s position shows “a lack of understanding of how LDCs (and other shippers) contract for pipeline capacity for a myriad of reasons, and not solely to meet their demand requirements.”
The 120-mile greenfield PennEast would move more than 1 Bcf/d from gas fields in Northeast Pennsylvania to New Jersey.
The project is a joint venture owned by Southern Co. (20%); New Jersey Resources’ NJR Pipeline Co. (20%), SJI Midstream LLC (20%); UGI PennEast LLC (20%) and Enbridge Inc. (20%). Ninety percent of the pipeline’s capacity has been contracted. New Jersey Resources affiliate New Jersey Natural Gas Co. is the project’s largest subscriber with 180,000 Dth/d of capacity.
PennEast received its FERC certificate in January, and the Commission denied a number of rehearing requests filed against the project as part of a flurry of orders handed down on Commissioner Powelson’s last day earlier this month.
Commissioner Richard Glick dissented in both decisions, questioning, among other issues, the Commission’s needs determination for the project. As he has elsewhere, Glick said the Commission should more closely examine the validity of precedent agreements from affiliates when assessing the market need for a project.
Glick and fellow Democratic Commissioner Cheryl LaFleur have shown a willingness to dissent in recent FERC decisions related to natural gas pipelines, with the Commission’s approach to needs determination and its evaluation of greenhouse gas emissions being key sticking points.
This comes as pipeline challengers have had success against FERC’s orders in federal court as of late. Last year, a court ruled against FERC’s assessment of potential GHG emissions for a trio of Southeast pipelines, including Sabal Trail. More recently, appeals court rulings vacating federal approvals for the Atlantic Coast and Mountain Valley pipelines led FERC to substantially halt progress on construction for those projects.
Much like the anti-natural gas position staked out by their neighbors in New York, New Jersey regulators have been no friend to PennEast over the course of the project’s development. The state’s attorney general even filed a challenge to the project in federal court earlier this year. The state also filed a rehearing request challenging FERC’s certificate.