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S&P Global: Major DC Circuit Gas Ruling Extends to FERC's Power Proceeding, Experts Say

Posted by Zack Hale on Jun 30, 2020

S&P Global covered the DOJs ruling requiring FERC to rapidly address pipeline disputes and power market proceedings, quoting AEE's Jeff Dennis. Read excerpts below and the entire S&P Global piece here. 

A federal appeals court ruling requiring the Federal Energy Regulatory Commission to move faster to address pipeline disputes also carries major implications for how the agency handles contested power market proceedings, according to legal experts. Calling the practice a "stalling tactic," a full panel of judges for the U.S. Court of Appeals for the District of Columbia Circuit on June 30 ruled 10-1 that FERC can no longer use what are known as "tolling orders" to give itself indefinite time to act on rehearing requests that effectively bar parties from seeking judicial review...

The case at issue  Allegheny Defense v FERC (No. 17-1098)  challenged the commission's decades-old policy of employing tolling orders under the Natural Gas Act to delay ruling on challenges to commission orders approving pipelines until after construction starts or even until after a project is completed. The full D.C. Circuit in December 2019 opted to review a three-judge panel's decision to uphold FERC orders approving the 196.5-mile Atlantic Sunrise project in which a dissenting judge slammed the agency's practice of placing landowners in "administrative limbo..."

Notably, the court's statutory analysis in Allegheny will apply equally to wholesale electricity market proceedings, which are governed by the Federal Power Act, because the rehearing provision in both acts "is exactly the same," said Jeff Dennis, managing director and general counsel of Advanced Energy Economy.

Under both statutes, a rehearing request is denied by operation of law if FERC fails to act on it within 30 days. FERC has traditionally sought to avoid that outcome by issuing tolling orders that "grant rehearing for further consideration," allowing the commission to buy more time to respond to parties' legal claims before they come before a reviewing court.

"The commission cannot have it both ways, claiming to have granted rehearing in one breath, while promising in the next breath that it will decide in some future order whether to grant rehearing or not," the D.C. Circuit's en banc panel said June 30.

Dennis, a former FERC lawyer who also worked on pipeline issues, said the D.C. Circuit's ruling will broadly require the commission to make a faster assessment of perceived legal risk before deciding how to proceed.

The decision is bound to transform how FERC does business, but the D.C. Circuit was also careful to note that the commission can still ask courts for an extension to submit the record in a proceeding and make additional changes in the meantime, Dennis said...

Exactly how FERC plans to respond to the court's ruling will take time to sort out, Dennis said.

"But I think it's pretty certain that there will have to be some changes to the commission's processes," Dennis said. "I think the commission, in some cases, will have to decide that it's comfortable just letting the 30 days pass, relying on its first order and not actually rewriting a rehearing order..."

Read the entire S&P Global piece here. 

Topics: AEE In The News