The U.S. Court of Appeals for the District of Columbia (DC) Circuit on Tuesday rebuffed a request filed by Spire STL Pipeline LLC to reconsider an earlier decision that vacated the Midwest natural gas conduit’s FERC certificate.
The circuit court denied a petition for panel rehearing filed by Spire and its affiliate Spire Missouri Inc., ostensibly reaffirming the court’s view that FERC failed to properly examine the market need for the project in its 2018 certificate.
The Environmental Defense Fund (EDF), the plaintiff in the case, expressed support for the latest court action.
“The court has appropriately rejected the request to revisit its initial decision,” EDF lead counsel Natalie Karas said. The Federal Energy Regulatory Commission “has the authority and fact-finding tools to craft a remedy that fulfills the need for reliable service while safeguarding other public interests.”
What happens next for Spire, a 65-mile, 400,000 Dth/d project designed to tap supplies from the Rockies Express Pipeline for delivery into the St. Louis metropolitan area, could depend on how the now-Democratic-led Commission chooses to act. Current FERC Chairman Richard Glick dissented in the 2018 certificate order.
Spire in late July applied for a temporary certificate of public convenience and necessity, asking FERC to take action in light of the DC Circuit ruling to “prevent an emergency and assure adequate service” to the pipeline’s customers.
The EDF filed in opposition to Spire’s application.
“While the Commission should act as necessary to ensure that residents and businesses in St. Louis continue to have reliable access to natural gas,” the application for a temporary certificate “has serious deficiencies,” the EDF told FERC, adding that “any temporary emergency certificate granted by the Commission should be limited and subject to strict conditions.”
Analysts at ClearView Energy Partners LLC said in a research note to clients Tuesday that FERC could choose to allow the Midwest pipeline to remain in operation, albeit possibly not at full capacity.
“We continue to think FERC is likely to allow Spire STL to continue to operate on a temporary/emergency basis, but potentially at neither its full current capacity nor rates this winter (and beyond),” the ClearView analysts wrote.
Among the issues at the heart of the Spire FERC proceeding is how the Commission should consider pipeline commitments from affiliated entities. Project skeptics, Glick notable among them, have highlighted Spire’s reliance on a precedent agreement with Spire Missouri to demonstrate a need for the project.
Glick’s views on the reliability of precedent agreements as a gauge of project need could foretell policy changes to come at FERC given the agency has moved to update its decades-old policy statement on natural gas infrastructure reviews.
For its part, the EDF is urging FERC to adopt a “more rigorous” approach to examining pipeline contracts not entered into at arm’s length. This “could prevent the imposition of unnecessary costs on utility customers and lock-in of greenhouse gas pollution over the 50-year life of new pipelines,” according to the environmental group.
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