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Amicus Brief in D.C. Circuit Opposing FERC Pipeline Approval
The Federal Energy Regulatory Commission (FERC) recently approved the construction of a new natural gas pipeline that would run through New Jersey and Pennsylvania. The gas capacity this expensive pipeline would provide, most of which will serve New Jersey markets, is unnecessary to meet the demand of New Jersey customers: the New Jersey Board of Public Utilities commissioned a study that demonstrates as much. We submitted an amicus brief in support of petitioners challenging this pipeline. In our brief, we explain that, in approving pipeline applications, FERC has abdicated its statutory responsibility to examine whether a pipeline is truly needed. Instead of determining whether a pipeline would serve the public interest, FERC defers to the assertions of profit-motivated pipeline developers and their customers. FERC's practice of approving needless pipelines is particularly concerning in light of how it regulates the development of electric transmission infrastructure, a related regulatory process. We argue that FERC should have placed greater weight on the rigorous economic study conducted by an expert state agency charged with ensuring safe and adequate gas supply for its residents.
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Regional Planning for Just and Reasonable Rates
Reforming Gas Pipeline Review
Natural gas plays an outsized role in the U.S. economy. Under the Natural Gas Act, the Federal Energy Regulatory Commission (FERC or the Commission) is responsible for overseeing the orderly development of interstate natural gas pipelines, which facilitate the transmission of natural gas throughout the country. FERC can approve the pipeline only if it finds that it is required by the “public convenience and necessity.” Although FERC should consider a range of factors to determine whether a pipeline will serve the public interest, in practice, it looks primarily to the contracts between a developer and its customers for the purchase of pipeline capacity. If a developer can demonstrate that there is a party willing to pay to use its pipeline, FERC rarely asks questions and almost always finds “public” need. This pipeline-by-pipeline approach to natural gas transmission build-out leads to the construction of unnecessary, underused pipelines, which in turn increases ratepayer costs and decreases consumer welfare. Climate change further increases the risk that pipelines will become obsolete as cities and states move toward electrification. Relying on economic theory, legal history, and policy analysis, we make the case for FERC’s adoption of regional gas transmission planning.
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FERC Environmental Justice Roundtable Comments
The Federal Energy Regulatory Commission (FERC), the agency responsible for regulating interstate energy infrastructure and markets, is seeking to better incorporate environmental justice into its decision-making. On March 29th, 2023, FERC held its first-ever Environmental Justice Roundtable where Policy Integrity’s Environmental Justice Director, Al Huang, testified and provided suggestions on how the Commission can identify, avoid, and minimize adverse impacts on environmental justice communities. We submitted additional comments to FERC on these issues, as well as on FERC's legal authority to incorporate environmental justice into its permitting decisions.
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Comments to FERC on its Backstop Siting Authority
Following the passage of the Bipartisan Infrastructure Law, the Federal Energy Regulatory Commission (FERC) proposed implementing regulations for its authority to site transmission projects that have been rejected or not acted upon by states. We filed comments advising FERC that, to make these determinations and satisfy FERC's obligations under the National Environmental Policy Act, the Commission must consider how proposed transmission projects would affect emissions from power plants. Our comments further recommend improvements to the proposed rule's environmental justice provisions, which also relate to FERC's obligation to ensure that proposed projects are consistent with the public interest.
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Policy Brief and Supplemental Comments on the FERC Transmission Planning Rule and the Major Questions Doctrine
Together with Harvard’s Electricity Law Initiative, we prepared a policy brief and supplemental comments defending the Federal Energy Regulatory Commission’s (FERC) proposed rule on transmission planning reform from arguments that the proposal would trigger the major questions doctrine. We review previous transmission planning regulations and orders by FERC to explain that the major questions doctrine does not apply because the proposed rule is neither unheralded nor transformative.
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Supplemental Comments Addressing Impact of West Virginia v. EPA on FERC’s Proposed Policy Statements for Natural Gas Infrastructure
In February, the Federal Energy Regulatory Commission proposed two policy statements that called for the consideration of climate impacts in pipeline certificate proceedings. In April, we filed two comments letters on these proposed policy statements, including one letter filed jointly with over two dozen legal scholars rebutting arguments that the Commission lacks authority to consider climate effects in its oversight of natural gas infrastructure under the Natural Gas Act and, relatedly, that the proposed policy statements implicate the major questions doctrine. Today, we submitted supplemental comments rebutting arguments that the Supreme Court’s recent decision on the major questions doctrine in West Virginia v. EPA somehow affects the Commission’s ability to finalize its proposed policy statements.
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Comments to FERC on Transmission NOPR
We submitted comments to FERC providing recommendations for how it can clarify and improve reforms proposed in its Notice of Proposed Rulemaking addressing transmission planning and cost allocation. If finalized, the rulemaking would require planning entities to undertake long-term transmission planning. Our comments recommend that FERC clarify (at a high level) what it means to undertake long-term planning over a 20-year time horizon. We also recommend more specific improvements that can be made, including providing minimum uniform requirements on model specifications and scenario planning based on best practices; instituting administrative guardrails to protect transmission customers from excessive costs if the Commission moves forward with its proposed Right of First Refusal; and mandating a uniform set of core benefits that all planners must consider.
We also submitted reply comments in the proceeding to underscore two points. In response to commenters that argued the Commission should reconsider its proposal in light of the level of uncertainty surrounding the future, we argue that it is future uncertainty that necessitates the long-term scenario planning contemplated by the rule. Such proactive transmission planning will allow planners to prepare for and react to changing circumstances and ensure a reliable and resilient grid in the face of uncertainty. Additionally, our reply comments reaffirm previous recommendations that the Commission should require planners to use a standardized cost-benefit analysis that properly accounts for societal benefits of new transmission.
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Comments to FERC on Regional Energy Access Expansion Project DEIS
Today we submitted comments to FERC on the draft environmental impact statement for Transcontinental Gas Pipe Line Co.'s Regional Energy Access Expansion Project. These comments offer recommendations for improving the Commission's assessment of climate and environmental justice impacts of the project, and its consideration of alternatives.
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Comments to FERC on Iroquois Gas Certificate Order
Today we submitted comments to FERC regarding its decision to grant a certificate of public convenience and necessity to Iroquois Gas for its Enhancement by Compression Project. These comments begin by underscoring the Commission's obligation to independently review and scrutinize lifecycle greenhouse gas emission reports (or other evidence regarding net emissions associated with a project) submitted by applicants. The comments also highlight flaws in Iroquois' analysis which undermine the conclusion that the project will result in a decrease of emissions. The Commission overlooked these flaws in relying on the analysis to conclude the project would result in a net reduction, such that it need not further assess the project's climate impacts.
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Reforming Pipeline Review
Taking a Closer Look at the Need for New Natural Gas Infrastructure
The Federal Energy Regulatory Commission (FERC) uses a flawed process to evaluate the need for new, long-lasting gas infrastructure such as interstate pipelines, resulting in a certification process that fails to serve the public interest. As FERC begins to re-examine its approval process for new natural gas infrastructure, our report analyzes the Commission’s authority to consider a broader range of factors when deciding whether a proposed project is in the public interest. The report offers four key recommendations for reform.
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