In addition to the Federal Energy Regulatory Commission (FERC) slapping down the New York DEC this week (see our lead story), on Wednesday the D.C. Circuit Court of Appeals slapped down both New York and North Carolina regulators who tried to block three important Williams pipeline projects, all related to the mighty Transco Pipeline.
All three Transco expansion projects–Atlantic Sunrise, the Dalton expansion, and the Virginia Southside II expansion–have been online and flowing for some time (years in some cases). NC and NY filed a lawsuit challenging FERC’s approvals for those projects, claiming residents in their states would suffer economic harm from (unbelievably) paying higher prices for natgas. Which hasn’t happened.
What did NC and NY want to have happen? Did they want all three projects, which have enormously benefited citizens in every state where they run, shut down? It’s bizarre.
State challenges to federal approvals for three Transcontinental Gas Pipe Line gas pipeline projects fell through after an appeals court found that the state agencies do not have standing to dispute the gas transportation rates at issue.
The US Appeals Court for the DC Circuit dismissed the North Carolina Utilities Commission and the New York State Public Service Commission petition for review of the Federal Energy Regulatory Commission approvals in a two-page judgment on Wednesday. The agencies “failed to provide sufficient evidence to establish injury in fact,” the court said.
The North Carolina commission and New York regulator, which supported its sister agency as an intervenor, had asked the court to set aside the FERC orders granting Natural Gas Act certificates to three projects developed by Williams’ Transco pipeline subsidiary: the 1.7-Bcf/d Atlantic Sunrise expansion, the 448-MMcf/d Dalton expansion and the 250-MMcf/d Virginia Southside II expansion.
The state utility commissions had argued that the recourse rate that FERC used was based on an outdated and inflated pre-tax return, which meant “the agreed-upon negotiated rate is tainted,” a court filing said.
But the court said the state commissions had not shown that gas flowing through the Atlantic Sunrise project would actually enter their states or that gas consumers in their states would pay more for gas as a result of the project, and they offered “no evidence of injury” connected to the Dalton expansion or Virginia Southside expansion.
“Any harm is therefore either nonexistent or ‘conjectural or hypothetical,’ which does not suffice to demonstrate injury in fact,” the court wrote (US Appeals Court for the DC Circuit, 18-1018).
FERC upheld its rate approvals for the Virginia Southside and Dalton projects against the objections of North Carolina and New York in November 2017.
FERC issued certificates for the almost $3 billion Atlantic Sunrise project in February 2017, the $471.9 million Dalton project in August 2016 and the $190.8 million Virginia Southside II project in July 2016. The Atlantic Sunrise project, providing Marcellus Shale takeaway, included greenfield pipeline in Pennsylvania and added compression and other upgrades elsewhere on the Transco system. The Dalton project involved 115 miles of pipeline in Georgia and a compression station and other facilities in Georgia, North Carolina and Virginia. The Virginia Southside project put in place a lateral to a Dominion Energy power plant in Virginia and related facilities. The projects are all in service.*
*S&P Global Platts (Apr 4, 2019) – DC Circuit rejects appeal of FERC approvals for Transco pipeline projects
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