Federal regulators are set to reconsider whether New York took too long to issue a water quality certification (WQC) for the embattled Constitution Pipeline after the U.S. Court of Appeals for the District of Columbia Circuit on Thursday granted a motion to remand the matter back to FERC at the commission’s request.

The Federal Energy Regulatory Commission filed the motion last week to reconsider a decision FERC made last year when it refused to waive New York’s authority. At the time, FERC found that the New York Department of Environmental Conservation (DEC) did not fail to act on Constitution's WQC within the one-year timeframe required by the Clean Water Act (CWA), as the project’s sponsors had argued.

Constitution appealed the Commission’s decision to the DC Circuit. FERC wants a chance to reconsider the matter following a ruling by the DC Circuit in an unrelated hydropower case that favors Constitution and addressed similar issues.

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“We see a strong likelihood that FERC could reverse its initial ruling and find that New York exceeded the year allowed for CWA review,” said ClearView Energy Partners LLC in a note to clients on Thursday. “This would render moot” New York’s 2016 denial of the WQC “and remove a large obstacle that has blocked the project from entering construction.”

Constitution in 2014 received a FERC certificate authorizing construction and operation. But sponsors have battled the DEC since the WQC denial in 2016. The project sponsors had filed for a WQC in August 2013, but the application was withdrawn and resubmitted twice, which DEC argued reset the one-year deadline it had to make a decision each time. FERC agreed last year and refused to waive the state’s regulatory authority.

In the hydropower case, the DC Circuit ruled that FERC should proceed with a review of the Klamath Hydroelectric Project, a 2004 proposal by electric utility PacifiCorp to build a series of dams along the Klamath River in California and Oregon. The court held that withdrawing and resubmitting WQC applications “does not trigger new statutory periods of review.”

In its request, FERC said it intended to take comments on the impacts of the hydropower case within 30 days of any order from the court remanding Constitution's case. The Commission also said it would accept reply comments for another 20 days after that. ClearView said the timeline indicates that FERC could issue an order on Constitution's waiver request sometime in May. The firm added, however, that the projection might be optimistic given the Commission’s recent gridlock on natural gas infrastructure, as just two Republicans and two Democrats are seated. 

Even if FERC waives New York’s authority, ClearView also noted that the project would still need a new Section 404 permit from the U.S. Army Corps of Engineers. It’s unclear how long that review might take.

ClearView added that the project’s FERC certificate also faces a challenge in the U.S. Court of Appeals for the Second Circuit that was filed by environmental groups. The court, ClearView said, could vacate the certificate given that FERC’s environmental impact statement for the pipeline did not include the kind of quantification of downstream greenhouse gas emissions that the DC Circuit ruled last year should have been included in the review of the Sabal Trail Transmission LLC project and others.

The 124-mile Constitution Pipeline would carry 650 MMcf/d of Appalachian gas from Susquehanna County, PA, to an interconnect with the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, NY. The project is backed by Williams, Cabot, Piedmont Natural Gas and WGL Holdings Inc.