The recent U.S. Court of Appeals for the District of Columbia decision to withdraw the Federal Energy Regulatory Commission’s (FERC) “determination of public convenience” for the 65-mile Spire STL pipeline from Illinois to Missouri will have a far-reaching impact. This ruling calls into question FERC’s longstanding policy of basing the “statement of public convenience” on what is commonly called an “owner’s precedent agreement.”
· Principally, the DC Court of Appeals ruled that FERC’s Certificate of Policy Statement requires the agency to consider what is in the public’s overall best interest as part of its determination of public interest and not limit analysis to whether there is a market for the commodity to be moved by a proposed pipeline.
Without FERC’s “Notice of Public Convenience”, a FERC-regulated pipeline project (primarily interstate projects) cannot proceed. This notice of public convenience is normally the first step in the normally challenging process of gaining Federal, State and local pipeline approval. As a result of the DC Circuit Court’s ruling, FERC will now have to clarify its Certificate of Policy for establishing Federal interest in natural gas pipelines to more accurately explain and justify the balancing required by the D.C. Circuit. Any effort to move forward with an interstate natural gas pipelines will need to meet the exacting criteria set out by the D.C. Circuit.
This DC Court of Appeals decision is another example of changing legal requirements for pipeline approvals that put increased emphasis on a project’s cost-benefit analyses, which must now include determination of long-term public interests. Applicants must also place special emphasis on thoroughly evaluating environmental effects, climate change, and considerations of social justice.
Rob Vining
Senior Advisor
Prior to joining Dawson & Associates in 2012, Rob was the National Water Practice Leader for HNTB Corporation and prior to that, served as Chief of the Civil Works Programs, Management Division of the U.S. Army Corps of Engineers.