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N.Y. agency cites court decision in arguing FERC pipeline OK was flawed

Citing a recent court decision involving the Federal Energy Regulatory Commission, the New York State Department of Environmental Conservation is arguing that FERC’s prior approval of a pipeline project that will feed natural gas to a new power plant was flawed because the commission “failed to consider or quantify” the indirect effect of downstream greenhouse gas emissions that will result from burning the natural gas that the project will transport to the power plant.

At issue is a Millennium Pipeline Company LLC project that includes approximately 7.8 miles of new natural gas pipeline that will extend from Millennium Pipeline’s existing main line pipeline north to the new 680-megawatt CPV Valley Energy Center in the Town of Wawayanda in Orange County, N.Y., which is currently under construction, and for ancillary aboveground facilities.

Millennium filed application at FERC in 2015

Millennium in 2015 filed an application at FERC seeking a certificate of public convenience and necessity pursuant to a section of the Natural Gas Act to construct and operate the project. The Commission, pursuant to the NGA and the National Environmental Policy Act, conducted an environmental review of the project and in May 2016 issued an environmental assessment, or EA.

In November 2016, FERC issued an order (Docket No. CP16-17) granting the requested certificate, which incorporated the findings of the EA and was subject to various conditions, including that Millennium obtain certain authorizations from the New York DEC including, but not limited to, a water quality certificate.

In the event that Millennium does not obtain a water quality certificate, all conditions of FERC’s order “cannot be satisfied and, accordingly the applicant would be foreclosed from commencement of the project in any capacity,” the DEC said in an Aug. 30 filing at FERC. The DEC said that Millennium has not received any authorizations from the New York agency, including a water quality certificate.

The DEC said that a recent U.S. Court of Appeals for the District of Columbia Circuit decision (Sierra Club, et al. v. FERC) comes into play as it relates to FERC and the Millennium project.

The appeals court on Aug. 22 said that FERC’s environmental assessment of a set of new natural gas pipelines in the southeastern part of the country fell short because the assessment “did not contain enough information on the greenhouse-gas emissions that will result from burning the gas that the pipelines will carry.” At issue in that proceeding is the Southeast Market Pipelines Project, which comprises three natural-gas pipelines now under construction in Alabama, Georgia, and Florida.

“In conducting its environmental review, just as in Sierra Club, the Commission failed to consider or quantify the indirect effect of downstream GHG emissions that will result from burning the natural gas that the project will transport to CPV Valley Energy Center,” the DEC argued in its FERC filing. “Nor did the Commission include any explanation as to why such downstream GHG emissions were not quantified or considered,” the New York agency said.

The DEC said that while FERC’s EA “makes a cursory reference to the cumulative impacts” of the project in connection with the CPV Valley Energy Center, “it totally lacks” any estimate of the amount of power plant emissions that the project will make possible. “Thus, under the Sierra Club rationale, FERC’s environmental review of the project is similarly flawed and must be supplemented or repeated in its entirety,” the DEC argued. It said the Commission’s “similar flaw regarding the Southeast Market Pipelines project led to the D.C. Circuit vacating the Commission’s order in that proceeding.”

The DEC said that while it has continued to review a related application before it “in good faith, the D.C. Circuit’s decision in Sierra Club has effectively rendered the environmental review conducted for this project incomplete and inadequate.”

What the DEC is asking of FERC

The DEC argued that FERC should reopen the evidentiary record in the proceeding at the federal agency “for the purpose of taking additional evidence – specifically, the quantification of GHG emissions associated with the combustion of the natural gas being transported by the project that will be used solely at the CPV Valley Energy Center.”

In the alternative, the DEC said that FERC should grant rehearing of the commission’s November 2016 order to prepare a supplemental environmental review.

“In either instance, the Commission should stay the order during the pendency of review of this request and any appeal thereof,” the DEC said.

In the docket at FERC for the proceeding, the DEC includes recent correspondence that it sent to Millennium. In the Aug. 30 letter, the DEC said that the application for the project is “deemed denied as of the date of this notice, consistent with the Department’s request to FERC.”

The DEC went on to say in the letter that in the event that FERC denies the Department’s request, Millennium’s joint application for the project “is deemed denied as of the date of this notice due to (i) the lack of a complete environmental review for the project and (ii) a material change in applicable law (the D.C. Circuit’s decision in Sierra Club).”

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