Document ID: FERC-2021-0107-0001
Agency: ferc
Document Type: Rule
Title: Limiting Authorizations to Proceed with Construction Activities Pending Rehearing
Posted Date: 2021-02-01T05:00Z

[Federal Register Volume 86, Number 19 (Monday, February 1, 2021)]
[Rules and Regulations]
[Pages 7643-7646]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-02063]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 153 and 157

[Docket No. RM20-15-001; Order No. 871-A]

Limiting Authorizations To Proceed With Construction Activities 
Pending Rehearing

AGENCY: Federal Energy Regulatory Commission.

ACTION: Order addressing arguments raised on rehearing and 
clarification, and providing for additional briefing.

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SUMMARY: On rehearing, the Federal Energy Regulatory Commission 
(Commission) modifies Order No. 871, which amended its regulations to 
preclude the issuance of authorizations to proceed with construction 
activities with respect to natural gas facilities authorized by order 
issued pursuant to section 3 or section 7 of the Natural Gas Act until 
either the time for filing a request for rehearing of such order has 
passed with no rehearing request being filed or the Commission has 
acted on the merits of any rehearing request. The Commission provides 
for further briefing on the issues raised in the rehearing requests.

DATES: The effective date of the document published on July 6, 2020 (85 
FR 40113) is confirmed: August 5, 2020.

FOR FURTHER INFORMATION CONTACT:  Tara DiJohn, Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426, (202) 502-8671, tara.dijohn@ferc.gov.

SUPPLEMENTARY INFORMATION: 
    1. On June 9, 2020, the Federal Energy Regulatory Commission 
(Commission) issued Order No. 871, which is a final rule that precludes 
the issuance of authorizations to proceed with construction activities 
with respect to a Natural Gas Act (NGA) section 3 authorization or 
section 7(c) certificate order until the Commission acts on the merits 
of any timely-filed request for rehearing or the time for filing such a 
request has passed.\1\ On July 9, 2020, the Interstate Natural Gas 
Association of America (INGAA) requested clarification or, in the 
alternative, rehearing, and Kinder Morgan, Inc. Natural Gas Entities 
\2\ (Kinder Morgan) and TC Energy Corporation (TC Energy) requested 
rehearing of Order No. 871.
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    \1\ Limiting Authorizations to Proceed with Construction 
Activities Pending Rehearing, Order No. 871, 85 FR 40113 (July 6, 
2020), 171 FERC ] 61,201 (2020).
    \2\ The Kinder Morgan Gas Entities include: Natural Gas Pipeline 
Company of America LLC; Tennessee Gas Pipeline Company, L.L.C.; 
Southern Natural Gas Company, L.L.C.; Colorado Interstate Gas 
Company, L.L.C.; Wyoming Interstate Company, L.L.C.; El Paso Natural 
Gas Company, L.L.C.; Mojave Pipeline Company, L.L.C.; Bear Creek 
Storage Company, L.L.C.; Cheyenne Plains Gas Pipeline Company, LLC; 
Elba Express Company, L.L.C.; Kinder Morgan Louisiana Pipeline LLC; 
Southern LNG Company, L.L.C.; and TransColorado Gas Transmission 
Company LLC.
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    2. Pursuant to Allegheny Defense Project v. FERC,\3\ the rehearing 
requests filed in this proceeding may be deemed denied by operation of 
law. However, as permitted by section 19(a) of the NGA,\4\ we are 
modifying the discussion in Order No. 871 and providing for additional 
briefing, as discussed below.\5\
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    \3\ 964 F.3d 1 (D.C. Cir. 2020) (en banc) (Allegheny).
    \4\ 15 U.S.C. 717r(a) (``Until the record in a proceeding shall 
have been filed in a court of appeals, as provided in subsection 
(b), the Commission may at any time, upon reasonable notice and in 
such manner as it shall deem proper, modify or set aside, in whole 
or in part, any finding or order made or issued by it under the 
provisions of this chapter.'').
    \5\ Allegheny, 964 F.3d at 16-17.
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I. Background

    3. In Order No. 871, the Commission explained that historically, 
due to the complex nature of the matters raised on rehearing of orders 
granting authorizations under NGA sections 3 and 7, the Commission had 
often issued an order (known as a tolling order) by the thirtieth day 
following the filing of a rehearing request, allowing itself additional 
time to provide thoughtful, well-considered attention to the issues 
raised on rehearing.
    4. In order to balance its commitment to expeditiously responding 
to parties' concerns in comprehensive orders on rehearing and the 
serious concerns posed by the possibility of construction proceeding 
prior to the completion of agency review, the Commission, in Order No. 
871, exercised its discretion by amending its regulations to add new 
Sec.  157.23, which precludes the issuance of authorizations to proceed 
with construction of projects authorized under NGA sections 3 and 7 
during the period for filing request for rehearing of

[[Page 7644]]

the initial orders or while rehearing is pending.\6\
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    \6\ Order No. 871 also revised Sec.  153.4 of the Commission's 
regulations to incorporate a cross-reference to new Sec.  157.23.
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    5. Three weeks after the Commission issued Order No. 871, the U.S. 
Court of Appeals for the District of Columbia Circuit (D.C. Circuit) 
issued an en banc decision in Allegheny.\7\ The court held that the 
Commission's use of tolling orders solely to allow itself additional 
time to consider an application for rehearing does not preclude 
operation of the NGA's deemed denial provision,\8\ which enables a 
rehearing applicant to obtain judicial review after thirty days of 
agency inaction.\9\ The court explained that, to prevent a rehearing 
from being deemed denied, the Commission must act on an application for 
rehearing within thirty days of its filing by taking one of the four 
NGA-enumerated actions: Grant rehearing, deny rehearing, or abrogate or 
modify its order without further hearing.\10\
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    \7\ 964 F.3d 1.
    \8\ 15 U.S.C. 717r(a).
    \9\ Allegheny, 964 F.3d at 18-19.
    \10\ See id. at 13 (quoting 15 U.S.C. 717r(a)).
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    6. On July 9, 2020, INGAA filed a request for clarification or, in 
the alterative, rehearing of Order No. 871. On the same day, Kinder 
Morgan and TC Energy also filed requests for rehearing.

II. Discussion

    7. We believe that the issues raised regarding this rulemaking 
merit further consideration by the Commission. Accordingly, to 
facilitate our reconsideration of the rulemaking and ensure a complete 
record for further Commission action, we provide all interested parties 
an opportunity to comment on the arguments in the rehearing requests, 
including, but not limited to, the issues enumerated below.
    a. Should the Commission withhold authorizations to commence 
construction during the pendency of all rehearing requests? 
Alternatively, should the Commission withhold authorizations to 
commence construction only during the pendency of rehearing requests 
that raise certain issues or arguments? If the Commission were to limit 
such a rule to only certain issues or arguments, which issues or 
arguments should trigger that rule?
    b. If the Commission were to adopt a rule of withholding 
authorizations to commence construction while rehearing is pending, 
should that rule apply to all orders pertaining to an NGA section 3 
authorization or section 7 certificate or only a subset thereof?
    c. In its rehearing request, INGAA poses a number of hypotheticals 
regarding circumstances that may unfold following Allegheny.\11\ Please 
comment on how a rule withholding authorizations to commence 
construction during rehearing, if appropriate, should apply to those 
circumstances.
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    \11\ INGAA Rehearing at 21-24.
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    d. Should the Commission modify its practices or procedures to 
address concerns regarding the exercise of eminent domain while 
rehearing requests are pending before the Commission? If so, how?
    e. If the Commission retains the rule withholding authorizations to 
commence construction while rehearing is pending, at what point in time 
should projects be permitted, upon receipt of an appropriate 
authorization, to commence construction? For example, should the 
Commission set a specific time, such as 90 days after the filing for a 
request for rehearing, for the Commission to issue an authorization to 
proceed?
    8. Briefs shall be due within 21 days (February 16, 2021). Reply 
briefs shall be due 15 days thereafter (March 3, 2021). Barring 
exceptional circumstances, the Commission will issue an order 
addressing the issues raised on rehearing and in the briefs within 60 
days of receipt of the reply briefs.

III. Filing Procedures

    9. Submissions must refer to Docket No. RM20-15-001, and must 
include the filer's name, the organization they represent, if 
applicable, and their address. The Commission encourages electronic 
filing via the eFiling link on the Commission's website at http://www.ferc.gov. The Commission accepts most standard word processing 
formats. Documents created electronically using word processing 
software should be filed in native applications or print-to-PDF format 
and not in a scanned format. If filing electronically, you do not need 
to make a paper filing.
    10. In lieu of electronic filing, you may submit a paper copy. 
Submissions sent via the U.S. Postal Service must be addressed to: 
Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 
First Street NE, Room 1A, Washington, DC 20426. Submissions sent via 
any other carrier must be addressed to: Kimberly D. Bose, Secretary, 
Federal Energy Regulatory Commission, 12225 Wilkins Avenue, Rockville, 
Maryland 20852. The first page of any filing should include docket 
number RM20-15-001.
    11. All submissions will be placed in the Commission's public files 
and may be viewed, printed, or downloaded remotely as described in the 
Document Availability section below.

IV. Document Availability

    12. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
internet through the Commission's Home Page (http://www.ferc.gov). At 
this time, the Commission has suspended access to the Commission's 
Public Reference Room due to the President's March 13, 2020 
proclamation declaring a National Emergency concerning the Novel 
Coronavirus Disease (COVID-19).
    13. From the Commission's Home Page on the internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this document in eLibrary, type 
the docket number excluding the last three digits in the docket number 
field.
    14. User assistance is available for eLibrary and the Commission's 
website during normal business hours from FERC Online Support at (202) 
502-6652 (toll free at 1-866-208-3676) or email at 
ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
public.referenceroom@ferc.gov.

V. Effective Date

    15. The effective date of the document published on July 6, 2020 
(85 FR 40113) is confirmed: August 5, 2020.

    By the Commission. Commissioner Danly is dissenting with a 
separate statement attached.

    Issued: January 26, 2021.
Kimberly D. Bose,
Secretary.

United States of America Federal Energy Regulatory Commission

Limiting Authorizations To Proceed With Construction Activities Pending 
Rehearing

Docket No. RM20-15-001
DANLY, Commissioner, dissenting:
    1. On June 9, 2020, the Commission issued a final rule providing 
that an authorization to proceed with construction activities for a 
Natural Gas Act (NGA) section 3 \1\ authorization or

[[Page 7645]]

section 7(c) \2\ certificate authorization will not be issued until the 
Commission acts on the merits of any timely-filed request for rehearing 
or the time for filing such a request has passed.\3\ On July 9, 2020, 
the Interstate Natural Gas Association of America requested 
clarification or, in the alternative, rehearing, and Kinder Morgan, 
Inc. Natural Gas Entities and TC Energy Corporation requested rehearing 
of Order No. 871. Today's order does not address any of these requests 
for rehearing, but instead establishes a briefing schedule for 
addressing several questions which touch on some, but not all, of the 
issues raised on rehearing, and additionally requests briefing on 
issues not raised on rehearing.
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    \1\ 15 U.S.C. 717b (2018).
    \2\ 15 U.S.C. 717f(c).
    \3\ See Limiting Authorizations to Proceed with Construction 
Activities Pending Rehearing, Order No. 871, 85 FR 40,113 (July 6, 
2020), 171 FERC ] 61,201 (2020) (Order No. 871).
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    2. I dissent from today's order because it: (1) Falls short of the 
Commission's obligation under the Administrative Procedure Act (APA) to 
address the arguments raised in requests for rehearing; and (2) will 
delay a ruling on the merits of the rehearing requests until 
approximately ten months after they were submitted, an action that 
surely is in tension with the U.S. Court of Appeals for the District of 
Columbia Circuit's (D.C. Circuit) decision in Allegheny Defense Project 
v. FERC (Allegheny) \4\ which prohibits the Commission from employing 
procedural means to delay judicial review of its orders.
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    \4\ 964 F.3d 1 (D.C. Cir. 2020) (en banc).
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    3. Whether the Commission retains the regulation as it is currently 
written, modifies it, or vacates it, the Commission is required under 
the APA to explain its reasoning. In doing so, it must respond to 
arguments raised by litigants. This requirement is fundamental to 
administrative decision making.\5\ The requests for rehearing assert 
that the adoption of the regulation was arbitrary and capricious due to 
a number of infirmities. Among them are:
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    \5\ See Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm 
Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (``Normally, an agency 
rule would be arbitrary and capricious if the agency has relied on 
factors which Congress has not intended it to consider, entirely 
failed to consider an important aspect of the problem, offered an 
explanation for its decision that runs counter to the evidence 
before the agency, or is so implausible that it could not be 
ascribed to a difference in view or the product of agency 
expertise.'') (emphasis added); New England Power Generators Ass'n, 
Inc. v. FERC, 881 F.3d 202, 211 (D.C. Cir. 2018) (finding ``that 
FERC did not engage in the reasoned decisionmaking required by the 
Administrative Procedure Act'' because it ``failed to respond to the 
substantial arguments put forward by Petitioners and failed to 
square its decision with its past precedent'').
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     A claim that the regulation could be read to prohibit 
issuing an authorization to proceed with construction where a request 
for rehearing is filed by a party in support of the project (including 
by the project proponent itself);
     an argument that the rule would not allow an authorization 
to proceed with construction where the party requesting rehearing is 
not an affected landowner;
     a claim that the regulation, as drafted, might not allow 
the issuance of an authorization to proceed with construction when a 
rehearing request has been denied by operation of law due to Commission 
inaction;
     an argument that the rule, strictly construed, might not 
permit the issuance of an authorization to proceed with construction 
when the rehearing request concerns an amendment to an existing 
authorization or subjects unrelated to landowner concerns, such as 
rates; and
     potential indefinite delay in the issuance of an 
authorization to proceed with construction.
    These are legitimate arguments. They deserve a response by the 
Commission. The Commission is obligated to provide those responses, but 
all are sidestepped in today's order.
    4. An inattentive reader who does no more than glance at the title 
of today's order might well be lulled into believing that it 
accomplishes more than it really does. This order is styled ``Order 
Addressing Arguments Raised on Rehearing and Clarification, and 
Providing for Additional Briefing.'' Despite the title, the Commission 
neither addresses the arguments raised on rehearing nor provides any 
clarification. Instead, with no explanation other than a bald 
declaration that ``[w]e believe that the issues raised regarding this 
rulemaking merit further consideration,'' \6\ today's order lists a 
number of questions for further briefing. Although the enumerated 
questions may be relevant to some points raised in the requests for 
rehearing, the Commission fails to explain why it agrees or disagrees 
with those arguments or why it believes the record insufficient for the 
Commission to rule on those arguments.
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    \6\ Limiting Authorizations to Proceed with Construction 
Activities Pending Rehearing, Order No. 871-A, 174 FERC 61,050, at P 
7 (2021).
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    5. To the extent that the Commission suggests a more complete 
record is needed to consider the requests for rehearing, I disagree. 
The Commission received three requests for rehearing that detail 
arguments the Commission had not considered in issuing the final rule. 
These arguments are straightforward--implicating neither complex facts 
nor difficult legal principles. Although I acknowledge that the 
Commission may well have needed more than thirty days in which to 
address those arguments, the six months that have elapsed surely were 
more than adequate, and I see no reason why the Commission needs the 
additional ninety-six days afforded by today's order. Regardless, even 
if there were good reasons for needing more time, the Commission 
necessarily fails in its duties by offering no justification for 
further delay.
    6. Moreover, the questions set forth for briefing are not confined 
to the issues properly raised on rehearing. One question asks whether 
the Commission should modify its practices or procedures to address 
concerns regarding the exercise of eminent domain while rehearing 
requests are pending before the Commission. No rehearing request 
suggests the Commission take this step. One wonders why this is the 
appropriate vehicle for such an inquiry, but it is not the proper 
vehicle to respond to arguments raised in the normal course of 
litigation.
    7. The inquiry regarding eminent domain appears at odds with the 
Commission's well-developed body of law declaring that it lacks the 
authority to restrict a certificate holder's use of eminent domain once 
the certificate of public convenience and necessity is received.\7\ I 
am not convinced that an automatic stay of the exercise of eminent 
domain pending Commission action on the merits of a rehearing request, 
which today's order suggests the Commission will consider, can be 
reconciled with NGA section 19(c).\8\ That section provides that 
``[t]he filing of an application for rehearing . . . shall not, unless 
specifically ordered by the Commission, operate as a stay of the 
Commission's order.'' \9\ As such, the idea that the Commission may 
adopt practices or procedures (presumably) to automatically stay an 
authorization to restrict a certificate holder's use of eminent domain 
would appear, at least on initial inquiry, to conflict with NGA section 
19(c). At a minimum, if the Commission wants parties to address the 
question of whether the exercise of eminent domain should be stayed 
automatically during the pendency of rehearing requests, it should also 
have

[[Page 7646]]

directed the parties to address the foundational question of the 
Commission's legal authority to issue a rule mandating such a stay. I 
strongly encourage parties to address this question in their briefs, 
even though it was not specifically mentioned in the majority's order.
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    \7\ See, e.g., PennEast Pipeline Co., LLC, 174 FERC ] 61,056, at 
P 10 & n.17 (2021) (collecting cases).
    \8\ See 15 U.S.C. 717r(c).
    \9\ Id. (emphasis added).
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    8. The Commission's failure to address the substance of the 
rehearing requests might be understandable if the order directing 
briefing had been issued earlier. Indeed, the Court in Allegheny 
suggested that it might be permissible for the Commission to provide 
for such supplemental briefing.\10\ However, that suggestion was 
offered in the context of the Court's discussion of a potential 
Commission order issued in connection with a timely ruling on rehearing 
within thirty days after a rehearing request.\11\ Here, we are simply 
failing to perform our duties.
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    \10\ See Allegheny, 964 F.3d at 16.
    \11\ See id.
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    9. Finally, lest any reader of today's order overlook it, let's 
pause for a moment to consider the irony of what the Commission 
contemplates here. In the very same proceeding in which the Commission 
promulgated a rule specifically aimed at alleviating concerns that its 
tolling orders served only to ``buy [the Commission] more time to act 
on a rehearing application and stall judicial review,'' \12\ the 
Commission attempts to buy more time by ordering further procedure 
after the statutory deadline to act on rehearing has passed and as 
judicial review is imminent, absent any modification in the meantime of 
the rule under review. I for one will be interested to see whether the 
D.C. Circuit countenances this action any more than it accepted the 
Commission's use of tolling orders for the very same purpose. Time will 
tell.
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    \12\ Id. at 9.
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    For these reasons, I respectfully dissent.

James P. Danly,
Commissioner.
[FR Doc. 2021-02063 Filed 1-29-21; 8:45 am]
BILLING CODE 6717-01-P