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FERC Defends Tolling Orders in Atlantic Sunrise Case, Makes Effort to Appease Critics
Under scrutiny from the U.S. Court of Appeals for the District of Columbia Circuit, and facing criticism that it has impinged on the due process rights of pipeline challengers, FERC on Monday said it’s taking steps to address concerns over its handling of rehearing requests.
Part of an en banc rehearing of the agency’s review of the Atlantic Sunrise Project, counsel for the Federal Energy Regulatory Commission argued in a brief that its practice of issuing so-called “tolling orders” is consistent with the language in the Natural Gas Act (NGA).
A tolling order effectively allows FERC to delay judicial review of a decision by extending the 30-day statutory deadline for action on a rehearing request. A challenger traditionally must wait for a final rehearing decision from FERC before taking the case to court.
FERC counsel told the court that the relevant section of the NGA “does not require a final rehearing decision on the merits within 30 days.” The statute instead states that an application for rehearing will be denied if not acted upon within 30 days, they wrote.
Further, a 30-day time limit would be “incompatible” with the amount of work required to properly consider rehearing requests given the complexity of many cases under its purview, according to the Commission.
“The Commission is often required to balance the interests of numerous stakeholders and render decisions that not only address challenging technical and economic matters, but also complex legal issues ranging far beyond the statutes it administers,” FERC counsel wrote. “This difficult task is vividly demonstrated in natural gas infrastructure proceedings, which require the Commission to apply a complex body of laws to various claims and parties.”
In the case of Atlantic Sunrise, there were more than 125 intervenors, according to FERC.
Still, the Commission acknowledged that its certificate proceedings “have become increasingly controversial over the past decade as natural gas has taken a preeminent place in the nation’s energy mix.”
FERC is attempting to “adjust the manner in which it balances…competing demands” to give due consideration to the issues, facilitate “the timely and efficient completion of projects found to be in the public interest,” and ensure that affected parties can “obtain prompt judicial review.”
FERC Chairman Neil Chatterjee said in late January the Commission would be reorganizing the Office of General Counsel in an effort to “more expeditiously process requests for rehearing” filed by “affected landowners.”
That move followed a commitment last September from the chairman to prioritize rehearing requests that involve landowner issues and cut back on the use of tolling orders.
In an excoriating opinion issued last year, DC Circuit Judge Patricia Millett ramped up the pressure on the Commission to reform its rehearing process, calling the use of tolling orders a “Kafkaesque regime” that allowed FERC to “keep homeowners in seemingly endless administrative limbo while energy companies can plow ahead seizing land and constructing the very pipeline that the procedurally handcuffed homeowners seek to stop.”
Meanwhile, counsel for Atlantic Sunrise developer Transcontinental Gas Pipeline Co. LLC (Transco), and for Chief Oil & Gas LLC and Southern Company Services Inc., also filed a brief with the DC Circuit this week, coming to the defense of FERC’s procedure.
They argued that the claims made by petitioners and landowners in the case overlook the “extensive due process provided by FERC’s notice-and-comment period.” The companies urged the court not to vacate FERC’s certificate order for Atlantic Sunrise.
“Many of the project facilities are integrated with Transco’s existing mainline system, and, therefore, cannot be shut down without also shutting down Transco’s existing mainline facilities,” they wrote. “Thus, both project customers and many existing customers on Transco’s mainline pipeline system would be deprived of critical transportation services in the event of vacatur.”
Oral argument for the en banc rehearing is scheduled for March 31.
The 1.7 Bcf/d Atlantic Sunrise went into service in late 2018, opening up an outlet for Appalachian Basin producers like Cabot Oil & Gas Corp. to move additional volumes onto Transco, a 10,000-mile interstate transmission system that stretches from South Texas to New York City.
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