The United States Court of Appeals for the District of Columbia (“D.C. Circuit”) recently upheld two FERC orders granting natural gas pipeline developers’ requests to extend their construction deadlines. The D.C. Circuit denied the Sierra Club’s petitions for review of the extension orders because the court determined that FERC’s decisions were reasonable and adequately supported by the record. The D.C. Circuit further provided that FERC has broad discretion in determining whether a developer has demonstrated good cause for an extension and whether circumstances have changed enough to warrant revisiting FERC’s original findings.
The extension orders at issue involve FERC’s approval of requests by National Fuel Gas Supply Corp. (“National Fuel”) and Cheniere Corpus Christi Pipeline, LP (“Cheniere”) to extend their construction deadlines. National Fuel sought the first extension of its construction deadline from February 3, 2019, to February 3, 2022, due to ongoing litigation regarding the New York State Department of Environmental Conservation’s (“NYSDEC”) denial of National Fuel’s Clean Water Act section 401 permit. Following resolution of the litigation between National Fuel and the NYSDEC 2021, National Fuel requested approval from FERC to extend its construction deadline to December 31, 2024, so that it could secure additional environmental permits.
FERC concluded that there was good cause for the extension based on prior FERC precedent that providing more time for a project applicant to obtain necessary permits can be an appropriate basis for granting such an extension. Cheniere requested that FERC extend the construction deadline for its pipeline project from November 22, 2024, to June 30, 3027, due to delays associated with the COVID-19 pandemic. FERC likewise granted Cheniere’s request for an extension, finding that the unforeseeable impacts of the COVID-19 pandemic satisfied FERC’s requirements for good cause.
On appeal, the D.C. Circuit held that FERC reasonably granted each company’s request for an extension of time and adequately explained its decision. In doing so, the D.C. Circuit held that FERC’s reasoning in both orders was consistent with previous FERC determinations on how “good cause” can be demonstrated. Specifically, the D.C. Circuit upheld FERC’s determination that the pipeline companies demonstrated good cause for an extension of time because the companies made good faith efforts to advance their projects and because delays in construction were caused by litigation and the COVID-19 pandemic. In response to the Sierra Club’s argument that FERC’s good cause standard is too “lax,” the D.C. Circuit provided that the standard FERC has adopted is reasonable and falls well within FERC’s broad discretion to “amend” a certificate order as necessary. Additionally, the D.C. Circuit disagreed with the Sierra Club’s contentions that FERC was required to re-evaluate the environmental and other public interest findings underlying the projects’ approval, instead holding that FERC is only required to revisit such prior findings if it deems it “necessary or appropriate.” The D.C. Circuit also concluded that such determinations about changed circumstances are entitled to substantial deference.
The D.C. Circuit’s opinion can be found here.