FERC on Thursday assured the California Coastal Commission (CCC) that it was not stepping on the state agency’s toes by asserting “exclusive jurisdiction” over Sound Energy Solution’s (SES) planned liquefied natural gas (LNG) terminal for the Port of Long Beach, CA.

In a related development, the California Public Utilities Commission’s (CPUC) petition seeking review of FERC’s jurisdictional claim over the Sound Energy project was filed with the U.S. Court of Appeals for the District of Columbia Thursday, a spokeswoman for the CPUC said. The case is No. 04-1264.

In the order addressing the coastal commission’s concerns, FERC once again declared its jurisdiction over the Sound Energy LNG terminal project. “We clarify that our claim to exclusive jurisdiction is intended as a declaration that SES need not apply to the CPUC for a state certificate of public convenience and necessity for its proposed project; our federal authorization, if issued, will constitute the only (exclusive) authorization for SES’s construction and operation of its proposed LNG import facilities and, in the absence of our federal authorization, the CPUC could not authorize SES’s project,” the order noted [CP04-58-002].

The coastal commission sought clarification of how FERC’s mid-June rehearing order, which upheld the Commission’s claim of jurisdiction over the LNG project, would affect its authority under California law. The state law requires the CCC to approve an amendment to the Port Master Plan for the Port of Long Beach before the proposed LNG import terminal can be considered by the Port of Long Beach.

Once the Port Master Plan is amended, the Port of Long Beach can then review an application for a Harbor Development Permit, which, if approved, may then be appealed to the CCC, it said.

“We clarify that to the extent the provisions of the existing Port Master Plan are incompatible with SES’s proposal, SES will have to seek amendment of the Port Master Plan, a matter involving the California Coastal Commission and the Port of Long Beach, not this Commission,” FERC said in the Thursday order.

The coastal commission also asked FERC to clarify that the LNG project of Sound Energy, a U.S. subsidiary of Japan’s Mitsubishi Corp., cannot go forward unless it meets the requirements of the Coastal Zone Management Act (CZMA) statute, and that FERC does not have the authority to waive compliance with or preempt the provisions of the CZMA. The CZMA gives states the right to block projects that are deemed detrimental to their coastal areas.

“Our previous orders…have no effect on the status of the California Coastal Commission’s federally-delegated CZMA authority,” or its authority under the Clean Water Act and the Clean Air Act, the order said. FERC “cannot authorize a proposed project within or affecting a state’s coastal zone unless the state CZMA agency (here the California Coastal Commission) determines that the proposed project is consistent with state’s Coastal Zone Management Program.”

The coastal commission is concerned that “we might attempt to rely on federal preemption to override its CZMA consistency finding,” but “this is not the case,” the order said. “With respect to the California Coast Commission’s CZMA consistency finding, [FERC] preemption is inapplicable; objections are properly appealed to the secretary of the U.S. Department of Commerce.”

In decisions issued in March and June, FERC said it had sole jurisdiction under Section 3 of the Natural Gas Act (NGA) and by the authority of the energy secretary over the siting, construction and operation of the import terminal proposed by Sound Energy.

The Commission issued the orders after the CPUC challenged its jurisdiction over the Sound Energy project in February. The CPUC argued that it had sole jurisdiction over the siting and construction of the project because the gas from the facility would be transported entirely within the state of California.

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