Rule2021-16812
Limiting Authorizations to Proceed With Construction Activities Pending Rehearing
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 6, 2021
Effective
May 13, 2021
Issuing agencies
Energy DepartmentFederal Energy Regulatory Commission
Abstract
The Federal Energy Regulatory Commission addresses requests for rehearing and clarification of Order No. 871-B.
Full Text
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<title>Federal Register, Volume 86 Issue 149 (Friday, August 6, 2021)</title>
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[Federal Register Volume 86, Number 149 (Friday, August 6, 2021)]
[Rules and Regulations]
[Pages 43077-43087]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-16812]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
18 CFR Parts 153 and 157
[Docket No. RM20-15-002; Order No. 871-C]
Limiting Authorizations to Proceed With Construction Activities
Pending Rehearing
AGENCY: Federal Energy Regulatory Commission, Department of Energy.
ACTION: Order addressing arguments raised on rehearing and
clarification.
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SUMMARY: The Federal Energy Regulatory Commission addresses requests
for rehearing and clarification of Order No. 871-B.
DATES: The effective date of the document published on May 13, 2021 (86
FR 26,150), is confirmed: June 14, 2021.
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, <a href="/cdn-cgi/l/email-protection#7d091c0f1c531914171215133d1b180f1e531a120b"><span class="__cf_email__" data-cfemail="1f6b7e6d7e317b76757077715f797a6d7c31787069">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Table of Contents
[[Page 43078]]
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Paragraph No.
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I. Background........................................... 3
II. Discussion.......................................... 10
A. Rule Limiting Construction Authorizations Pending 11
Rehearing..........................................
1. Opposition to Project Need................... 11
2. Amendment Orders Authorizing Mid-Construction 14
Changes........................................
3. Post-Allegheny Rehearing Treatment........... 18
4. Additional Clarifications to Regulation Text. 24
5. Effective Date of Construction Authorization 28
Issuances......................................
6. Procedural Nature of Rule.................... 30
B. Policy of Presumptively Staying Section 7(c) 33
Certificate Orders.................................
1. Policy Does Not Violate NGA or APA........... 34
2. Qualifying Landowner Rehearing Requests...... 40
3. Commitment to Refrain from Exercise of 42
Eminent Domain.................................
4. Claims of Burden Shifting.................... 44
5. Consideration of Industry Concerns........... 47
6. Landowner Ability to Seek Judicial Stay...... 49
C. Commission Determination......................... 51
III. Document Availability.............................. 52
IV. Dates............................................... 55
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1. On May 4, 2021, the Federal Energy Regulatory Commission
(Commission) issued an order addressing arguments raised on rehearing
and clarification, and setting aside, in part, its prior Order No.
871.\1\ Order No. 871-B revised the rule previously adopted by the
Commission in Order No. 871 \2\ to narrow the scope of its application
and to incorporate a time limitation for the Commission to preclude
issuances of authorizations to proceed with construction activities.
Order No. 871-B also announced a new general policy of presumptively
staying certificate orders issued pursuant to section 7(c) of the
Natural Gas Act (NGA) \3\ during the 30-day rehearing period and
pending Commission resolution of any timely requests for rehearing
filed by landowners. On June 3, 2021, the Interstate Natural Gas
Association of America (INGAA), the Enbridge Gas Pipelines
(Enbridge),\4\ and Mountain Valley Pipeline, LLC (Mountain Valley)
requested clarification and rehearing of Order No. 871-B.
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\1\ Limiting Authorizations to Proceed with Construction
Activities Pending Rehearing, Order No. 871-B, 86 FR 26150 (May 13,
2021), 175 FERC ] 61,098 (2021).
\2\ The Commission issued its June 9, 2020 Order No. 871 to
preclude the issuance of authorizations to proceed with construction
activities with respect to orders granting authorizations under
sections 3 and 7 of the Natural Gas Act (NGA) until the Commission
acts on the merits of any timely-filed request for rehearing or
until the deadline for filing a timely request for rehearing has
passed with no such request being filed. Limiting Authorizations to
Proceed with Construction Activities Pending Rehearing, Order No.
871, 85 FR 40113 (Jul. 06, 2020), 171 FERC ] 61,201 (2020).
\3\ 15 U.S.C. 717f(c).
\4\ The Enbridge Gas Pipelines include Algonquin Gas
Transmission, LLC; Big Sandy Pipeline, LLC; Bobcat Gas Storage; East
Tennessee Natural Gas, LLC; Garden Banks Gas Pipeline, LLC, Market
Hub Partners Holding, LLC; Mississippi Canyon Gas Pipeline, LLC;
Saltville Gas Storage Company L.L.C.; and Texas Eastern
Transmission, LP. The Enbridge Gas Pipelines also include natural
gas companies in which affiliates of the Enbridge Gas Pipelines own
a joint venture interest, including Alliance Pipeline L.P.,
Gulfstream Natural Gas System, L.L.C.; Maritimes & Northeast
Pipeline, L.L.C.; Nautilus Pipeline Company, L.L.C., NEXUS Gas
Transmission, LLC; Sabal Trail Transmission, LLC; Southeast Supply
Header, LLC; and Steckman Ridge, LP.
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2. Pursuant to Allegheny Defense Project v. FERC,\5\ 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,\6\ we are
modifying the discussion in Order No. 871-B and continue to reach the
same result in this proceeding, as discussed below.\7\
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\5\ 964 F.3d 1 (D.C. Cir. 2020) (en banc) (Allegheny).
\6\ 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.'').
\7\ Allegheny, 964 F.3d at 16-17. The Commission is not changing
the outcome of Order No. 871-B. See Smith Lake Improvement &
Stakeholders Ass'n v. FERC, 809 F.3d 55, 56-57 (D.C. Cir. 2015).
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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 requests for rehearing of the initial
orders or while rehearing is pending.\8\
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\8\ Order No. 871 also revised Sec. 153.4 (general requirements
for NGA section 3 applications) of the Commission's regulations to
incorporate a cross-reference to 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.\9\ 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,\10\ which enables a
rehearing applicant to seek judicial review after thirty days of agency
inaction.\11\ The court explained that, to prevent an application for
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.\12\
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\9\ 964 F.3d 1.
\10\ 15 U.S.C. 717r(a).
\11\ Allegheny, 964 F.3d at 18-19.
\12\ See id. at 13 (quoting 15 U.S.C. 717r(a)).
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6. Shortly thereafter, on July 9, 2020, the Commission received
three timely
[[Page 43079]]
requests for clarification and rehearing of Order No. 871. To
facilitate reconsideration of Order No. 871 and ensure a complete
record for further action, the Commission in Order No. 871-A
subsequently provided interested parties an opportunity to comment on
the arguments raised on rehearing and specific questions posed by the
Commission.\13\ In response, the Commission received twelve initial
briefs and five reply briefs from a variety of stakeholders, including
states, landowners, natural gas companies, and a consortium of public
interest organizations.\14\
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\13\ Limiting Authorizations to Proceed with Construction
Activities Pending Rehearing, Order No. 871-A, 86 FR 7643 (Feb. 1,
2021), 174 FERC ] 61,050 (2021).
\14\ See Order No. 871-B, 175 FERC ] 61,098 at PP 8-9
(describing briefs received).
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7. In consideration of the arguments raised on rehearing and in the
briefs, the Commission in Order No. 871-B revised Sec. 157.23 of its
regulations to provide that the rule prohibiting the issuance of
construction authorizations pending rehearing will apply only when a
request for rehearing raises issues reflecting opposition to project
construction, operation, or need.\15\ Order No. 871-B further revised
the rule to provide that the rule's restriction on issuing construction
authorizations while a qualifying rehearing request remains pending
will expire 90 days following the date that such request may be deemed
denied by operation of law under NGA section 19(a).\16\
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\15\ Order No. 871-B, 175 FERC ] 61,098 at PP 14, 30.
\16\ Id. PP 26, 30.
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8. In addition, the Commission in Order No. 871-B announced its
intent to stay its NGA section 7(c) certificate orders during the 30-
day rehearing period and pending Commission resolution of any timely
requests for rehearing filed by landowners.\17\ We explained that this
policy will be applied on a particularized basis, subject to certain
exceptions and, if imposed, any stay would be lifted no later than 90
days following the date that a qualifying request for rehearing may be
deemed denied by operation of law.\18\
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\17\ Id. PP 43-51.
\18\ See id. PP 46, 51.
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9. On June 3, 2021, INGAA and Enbridge filed requests for
clarification and rehearing of Order No. 871-B.\19\ On the same day,
Mountain Valley filed a request for clarification, or, in the
alternative, rehearing.\20\
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\19\ INGAA's June 3, 2021 Request for Clarification and
Rehearing (INGAA Rehearing); Enbridge's June 3, 2021 Request for
Clarification and Rehearing (Enbridge Rehearing).
\20\ Mountain Valley's June 3, 2021 Request for Clarification
or, in the Alternative, Rehearing (Mountain Valley Rehearing).
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II. Discussion
10. INGAA's and Enbridge's petitions include several requests for
clarification, or, in the alternative, rehearing of the rule, as
revised in Order No. 871-B, and of the Commission's announcement that
it would prospectively stay certain section 7(c) certificate orders
pending rehearing. Mountain Valley's petition is focused on a single
issue regarding the rule's application: whether the rule would apply if
rehearing is sought of an amendment order approving a minor mid-
construction change that would typically be submitted as a variance
request. Below, we first respond to the various requests for
clarification or rehearing of the revised rule and then to requests for
clarification or rehearing of the Commission's policy of staying
section 7(c) certificate orders pending rehearing.
A. Rule Limiting Construction Authorizations Pending Rehearing
1. Opposition to Project Need
11. In Order No. 871-B, the Commission revised Sec. 157.23(b) of
its regulations as follows:
With respect to orders issued pursuant to 15 U.S.C. 717b or 15
U.S.C. 717f(c) authorizing the construction of new natural gas
transportation, export, or import facilities, no authorization to
proceed with construction activities will be issued:
(a) until the time for the filing of a request for rehearing
under 15 U.S.C. 717r(a) has expired with no such request being
filed, or
(b) if a timely request for rehearing raising issues reflecting
opposition to project construction, operation, or need is filed,
until: (i) The request is no longer pending before the Commission,
(ii) the record of the proceeding is filed with the court of
appeals, or (iii) 90 days has passed after the date that the request
for rehearing may be deemed to have been denied under 15 U.S.C.
717r(a).\21\
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\21\ Order No. 871-B, 175 FERC ] 61,098 at P 30 (emphasis in the
original reflecting adopted revisions to Sec. 157.23).
12. INGAA and Enbridge request that the Commission clarify the
meaning of ``opposition to project . . . need.'' Specifically, INGAA
and Enbridge urge the Commission to clarify that this phrase refers
only to situations in which a project opponent claims that there is
insufficient evidence of market need for a project under the NGA
section 7 economic balancing test.\22\ INGAA maintains that ``virtually
any generic opposition to a project'' could be viewed as an argument
that the new facilities are not ``needed,'' and that if not clarified,
this phrasing could prohibit the issuance of construction authorization
whenever any rehearing request is filed by a party generally opposed to
development.\23\ Similarly, Enbridge posits that parties could delay
construction for months by claiming on rehearing that a project is not
needed because of ``broad climate change concerns.'' \24\
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\22\ See INGAA Rehearing at 9; Enbridge Rehearing at 13-14.
\23\ INGAA Rehearing at 10, 11.
\24\ Enbridge Rehearing at 13.
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13. We deny INGAA's and Enbridge's requests for clarification on
this issue. The petitioners' interpretation construes the language of
the rule too narrowly. Adopting this suggestion ``would exclude from
the rule's purview rehearing requests raising environmental matters or
general opposition to a project, as well as rehearing requests filed by
members of communities that would be impacted by the construction of
new natural gas facilities.'' \25\ The Commission has already stated
that we did not intend such a result.\26\ We continue to find it
appropriate ``to refrain from permitting construction to proceed until
the Commission has acted upon any request for rehearing that opposes
project construction and operation or raises issues regarding project
need, regardless of the basis or whether rehearing is sought by an
affected landowner.'' \27\
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\25\ Order No. 871-B, 175 FERC ] 61,098 at P 15.
\26\ Id.
\27\ Id. (emphasis added).
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2. Amendment Orders Authorizing Mid-Construction Changes
14. INGAA and Mountain Valley seek clarification that the rule does
not apply to amendment orders that authorize limited changes while
project construction is ongoing, which the they refer to as ``mid-
construction changes,'' or, in the alternative, rehearing.\28\ INGAA
explains that mid-construction changes--such as construction method
changes, temporary workspaces changes, and minor route realignments
that do not involve new facilities or new landowners--are traditionally
filed by project developers as variance requests.\29\ However, INGAA
notes that
[[Page 43080]]
the Commission can convert mid-construction changes submitted as a
variance request into certificate amendment proceedings. In addition, a
project developer may on its own accord decide to seek approval of
certain mid-construction changes by filing an amendment application
rather than a variance request.\30\ INGAA and Mountain Valley seek
assurance that the rule would not apply to amendment orders authorizing
mid-construction changes that would traditionally be approved through
the variance process. To support this request, INGAA and Mountain
Valley point to the language of Sec. 157.23's introductory text, which
references orders authorizing ``the construction of new natural gas
transportation, export, or import facilities,'' and explain that the
type of mid-construction amendment proceedings for which it seeks
clarification do not involve new facilities.\31\
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\28\ See INGAA Rehearing at 11-20; Mountain Valley Rehearing at
5-9.
\29\ See INGAA Rehearing at 13-15 (providing examples of prior
variance approvals allowing: temporary modification to location of
temporary access road to accommodate imminent longwall mining
activities in vicinity of construction area, a minor pipeline route
shift to avoid an obstruction placed on approved pipeline route,
modifications to pipeline route and road crossing method due to
unanticipated subsurface conditions).
\30\ See, e.g., Mountain Valley Rehearing at 5 (describing its
amendment application submitted in Docket No. CP21-57-000 requesting
Commission authorization to change the crossing method for specific
wetlands and waterbodies to be crossed by the Mountain Valley
Pipeline Project from open-cut crossings to one of several
trenchless methods). Nothing in this order prejudges action on the
amendment application.
\31\ INGAA Rehearing at 15-16 (noting that the term
``facilities'' refers to the physical plant approved by the
Commission in the original certificate order); Mountain Valley
Rehearing at 5.
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15. If the Commission declines to grant clarification, INGAA and
Mountain Valley request rehearing of this issue. If the Commission
agrees that the rule does not apply to orders authorizing limited mid-
construction changes, INGAA further asks the Commission to clarify that
it retains discretion to issue an authorization to proceed with
construction during the 30-day rehearing period following such an
order.\32\
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\32\ INGAA Rehearing at 18-20.
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16. In Order No. 871-B, we explained that the rule limiting
construction authorizations would not apply to a request for rehearing
of an non-initial order that merely implements the terms, conditions,
or provisions of an initial authorizing order, ``such as a delegated
order issuing a notice to proceed with construction, approving a
variance request, or allowing the applicant to place the project, or a
portion thereof, in service.'' \33\ With respect to amendment orders,
the Commission stated that the rule would apply only to the facilities
approved by the amendment order for which rehearing is sought: it would
not relate back to any facilities previously approved by the Commission
in the initial authorizing order that remain unchanged by the amendment
order.\34\
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\33\ Order No. 871-B, 175 FERC ] 61,098 at P 17.
\34\ Id. P 18.
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17. The Commission has already provided substantial guidance in
response to INGAA's previous requests for clarification regarding the
rule's application to non-initial and amendment orders. The scenario
now posed by INGAA and Mountain Valley on rehearing of Order No. 871-B
is a slightly different factual scenario. But the Commission is not
required to identify and address every conceivable permutation of facts
under which questions about the rule's application may arise.\35\
Therefore, it is premature to address the possible range of future mid-
construction changes. As a general matter, we think it likely that the
rule would not apply if rehearing is sought of an amendment order
approving a mid-construction change that is generally consistent with
the terms and conditions of the original authorization order and does
not involve new facilities or new landowners. However, we will consider
the circumstances of each request on a case-by-case basis, and will
indicate in the Commission's order in each case whether the rule
applies.
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\35\ See, e.g., Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 51 (1983) (``It is true that
a rulemaking `cannot be found wanting simply because the agency
failed to include every alternative device and thought conceivable
by the mind of man . . . regardless of how uncommon or unknown that
alternative may have been[.]'') (quoting Vt. Yankee Nuclear Power
Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519, 551 (1978)).
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3. Post-Allegheny Rehearing Treatment
18. Enbridge contends that the Commission erred by determining that
an order granting rehearing for further proceedings would vacate the
certificate authorization,\36\ arguing that the Commission cannot
revoke certificate authority merely by issuing an interlocutory order
granting rehearing or establishing a hearing, briefing schedule,
investigation or other similar proceeding, but rather, must make a
specific finding on the issues with the requisite support.\37\
According to Enbridge, an interlocutory order revoking a certificate
would improperly place the certificate holder in ``legal limbo'' as an
aggrieved party unable to seek rehearing and appeal of the
interlocutory action.\38\ Enbridge urges the Commission to establish a
specific timeframe for issuance of a substantive order following a
grant of rehearing subject to further proceedings or to set a deadline
after which a construction authorization may issue.\39\
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\36\ Enbridge Rehearing at 9-10.
\37\ Id. at 9.
\38\ Id. at 10.
\39\ Id. at 10-11.
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19. INGAA takes a different tack, suggesting that the Commission
adopt a case-by-case approach to determining whether an initial order
will be vacated when rehearing is granted.\40\ Specifically, INGAA asks
the Commission to clarify that it did not adopt a blanket rule that a
grant of rehearing for further procedures means the entire underlying
order is vacated,\41\ that it will instead employ a case-by-case
approach for determining whether grant of rehearing would result in
vacatur,\42\ and that the entire certificate authorization will not be
vacated if the Commission seeks additional briefing or information on
one or more targeted issues.\43\
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\40\ INGAA Rehearing at 20-23.
\41\ See id. at 20-22.
\42\ Id. at 22.
\43\ Id.
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20. Both INGAA and Enbridge note that the Commission's prior
practice of issuing tolling orders did not result in vacatur of
underlying order.\44\ Thus, despite changing its procedures for
handling requests for rehearing following Allegheny, INGAA and Enbridge
argue that the Commission has departed from longstanding practice and
failed to acknowledge such departure.\45\
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\44\ See INGAA Rehearing at 23; Enbridge Rehearing at 10.
\45\ See INGAA Rehearing at 23 (citing FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 515 (2009) (agencies must ``provide
reasoned explanation'' and show good reasons for a change in
position, but ``need not demonstrate to a court's satisfaction that
the reasons for the new policy are better than the reasons for the
old one'') (emphasis in the original)); Enbridge Rehearing at 10
(same).
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21. In response to INGAA's request, Order No. 871-B posited four
post-Allegheny scenarios that could arise following the filing of a
request for rehearing to explain when such a request would remain
pending before the Commission and, thus, preclude the issuance of a
construction authorization.\46\ The fourth scenario addressed a
situation contemplated by the Allegheny court, where the Commission
could ``grant rehearing for the express purpose of revisiting and
substantively reconsidering a prior decision,'' where it ``needed
additional time to allow for supplemental briefing or further hearing
processes.'' \47\ In Order No. 871-B, the Commission stated that
``[u]nder those circumstances, i.e., where the Commission grants
rehearing without issuing a final order, the original
[[Page 43081]]
authorization would no longer be in effect and the provisions of Order
No. 871 would no longer apply since there would be no final order
pursuant to which a notice to proceed could be issued.'' \48\
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\46\ See Order No. 871-B, 175 FERC ] 61,098 at PP 19-29.
\47\ Id. P 27 (citing 964 F.3d at 16).
\48\ Id.
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22. As an initial matter, Enbridge and INGAA err to the extent that
they suggest the Commission determined that original authorization
orders necessarily would be vacated or revoked by an interlocutory
order granting rehearing for further procedures, as described by the
Allegheny court. We merely stated, in response to a prior request for
clarification from INGAA, that under the specified circumstances
contemplated by the Allegheny court, the provisions of Order No. 871
``would no longer apply since there would be no final order pursuant to
which a notice to proceed could be issued.'' \49\ We agree with INGAA
that a case-by-case approach is necessary for the Commission to
determine the effect that a grant of rehearing for further procedures
would have on the underlying authorization. In the order granting
rehearing for further procedures, we will indicate the order's effect
on the underlying authorization.
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\49\ Id.
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23. The Commission previously declined a request to establish a
deadline for issuing a final merits order following a grant of
rehearing for further procedures.\50\ As we stated at the time,
timelines associated with supplemental briefing or evidentiary
submissions may vary based on the complexity of the issues warranting
further procedures.\51\ Thus, we continue to find that a case-by-case
approach is warranted in the event that the Commission grants rehearing
because it ``need[s] additional time to allow for supplemental briefing
or further hearing processes.'' \52\
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\50\ Id. P 28.
\51\ Id.
\52\ Allegheny, 964 F.3d at 16.
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4. Additional Clarifications to Regulation Text
24. INGAA argues that Sec. 157.23(b) should be revised to add the
phrase ``the earliest of the time at which,'' as italicized below:
If a timely request for rehearing raising issues reflecting
opposition to project construction, operation, or need is filed,
until the earliest of the time at which: (1) The request is no
longer pending before the Commission, (2) the record of the
proceeding is filed with the court of appeals, or (3) 90 days has
passed after the date that the request for rehearing may be deemed
to have been denied under 15 U.S.C. 717r(a).\53\
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\53\ INGAA Rehearing at 24.
INGAA contends that this addition would clarify and better reflect
what it understands to be the Commission's intent, as reflected by the
Commission's use of the conjunction ``or'' and references throughout
Order No. 871-B that suggest that the restriction on issuance of
construction authorizations will apply until the earliest of the three
``triggering events'' contemplated by the rule.\54\ If the suggested
change is not adopted, INGAA fears that project opponents may argue
that no authorization to proceed with construction should be issued
until the occurrence of the later of the three ``triggering events''
comes to pass.\55\
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\54\ Id. at 24-25.
\55\ Id. at 25.
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25. INGAA is correct in its interpretation that a construction
authorization may be issued upon the earliest occurrence of the three
triggering events enumerated in the regulation. However, we decline to
further revise the regulatory language. As currently drafted, the rule
uses the conjunction ``or'' which serves to distinguish the three
scenarios as alternatives and signals that a construction authorization
may issue once the earliest of the three events occurs.
26. In addition, INGAA renews its request that the Commission
revise Sec. 157.23 to expressly state that the rule may be waived for
good cause shown.\56\ INGAA urges the Commission to consider cases
finding in other contexts that agencies' authority to waive their own
rules is not unlimited and that agencies are bound by, and courts must
enforce, the unambiguous terms of regulations.\57\
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\56\ Id. at 28-29.
\57\ Id. at 28 (citing Reuters Ltd. v. FCC, 781 F.2d 946, 950
(D.C. Cir. 1986) (finding that FCC failed to follow its rules and
regulations in resolving dispute between competing applicants for
microwave radio station licenses); Erie Boulevard Hydropower, LP v.
FERC, 878 F.3d 258, 269 (D.C. Cir. 2017) (stating that ``an agency
action fails to comply with its regulations, that action may be set
aside as arbitrary and capricious'' and that ``[a]n agency decision
that departs from agency precedent without explanation is similarly
arbitrary and capricious.'') (citations omitted); Kisor v. Wilkie,
139 S. Ct. 2400, 2415 (2019) (explaining that when there is ``only
one reasonable construction of a regulation,'' Auer deference is not
appropriate and a court must not defer to any other reading of the
regulation); 5 U.S.C. 706(2)).
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27. The Commission previously declined to adopt INGAA's suggestion
to incorporate into the rule an explicit waiver provision, finding it
retains authority to waive its own regulations.\58\ INGAA raises no new
arguments that cause us to reconsider that decision.
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\58\ Order No. 871-B, 175 FERC ] 61,098 at P 29.
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5. Effective Date of Construction Authorization Issuances
28. Enbridge urges the Commission to clarify that its staff may
issue authorizations to proceed with construction prior to the deadline
established by the rule so long as the authorization does not become
effective until the occurrence of the earliest of the three triggering
events enumerated in the rule (i.e., the rehearing request is no longer
pending before the Commission, the record of the proceeding is filed
with the court of appeals, or 90 days after the date that the request
may be deemed denied).\59\ Allowing project developers to obtain
advance confirmation from Commission staff that all preconstruction
conditions have been satisfied would, according to Enbridge, help
project developers set and meet construction milestones, lessen the
chance of additional regulatory delays, and would reflect the
Commission's articulated goal of achieving an appropriate balance of
interests.\60\
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\59\ Enbridge Rehearing at 11-12.
\60\ Id. at 12.
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29. The Commission denies the requested clarification. We believe
that, in practice, a conditional construction authorization of the
nature Enbridge suggests has the potential to create uncertainty for
project developers, stakeholders, and Commission staff alike as to the
effective date of the authorization, which outweighs the purported
benefits that Enbridge identifies. Moreover, the advance notice
contemplated by Enbridge fails to account for a change in status of a
project developer's compliance with the terms of its section 7
certificate or section 3 authorization that could arise in the interim.
We believe that a cleaner approach is for the Commission to issue
authorizations to proceed with construction once all requisite
conditions have been satisfied and the rule's prohibition on such
issuance has elapsed.
6. Procedural Nature of Rule
30. INGAA urges the Commission to reconsider its determination that
Order No. 871-B is a procedural rule not subject to the Administrative
Procedure Act's (APA) notice and comment procedures.\61\ Where a
project developer has already fulfilled the necessary prerequisites for
beginning construction, INGAA argues that the Commission failed to
explain how it has ``unfettered discretion'' to refuse to allow
construction of facilities it has already found required by the public
[[Page 43082]]
convenience and necessity.\62\ INGAA also characterizes as misleading
the ``85-day'' figure--cited in Order No. 871-B to illustrate that over
a five year period, on average, 85 days elapsed between issuance of an
initial order and issuance of an authorization to proceed with
construction--for it fails to account for project differences and
assumes that developers rely on average figures when planning project
construction and in-service deadlines.\63\ According to INGAA, the rule
``dramatically changes'' the timeline for when a project can be placed
in service and ``implicate[s] the investment-backed expectations of all
project developers.'' \64\
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\61\ See INGAA Rehearing at 25-28.
\62\ Id. at 26.
\63\ See id. at 26-27; Order No. 871-B, 175 FERC ] 61,098 at P
37.
\64\ INGAA Rehearing at 27.
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31. The Commission previously responded to concerns that the rule
adopted in Order No. 871 was not a procedural rule and thus should have
been issued following the APA's notice and comment requirements.\65\ As
we explained, the APA's notice and comment procedures were not required
because the rule neither substantially ``alters the rights or
interests'' of regulated natural gas companies nor changes the agency's
substantive outcomes.\66\ We also explained that the timing of when to
permit construction to begin is a matter entirely within the
Commission's existing discretion and not a matter of right.\67\ INGAA's
arguments on rehearing do not demonstrate an error in the Commission's
analysis.\68\
---------------------------------------------------------------------------
\65\ See Order No. 871-B, 175 FERC ] 61,098 at PP 35-39.
\66\ Id. at P 35 (citing See Am. Hosp. Ass'n v. Bowen, 834 F.2d
1037, 1047 (D.C. Cir. 1987)).
\67\ Id. (explaining that nothing in the NGA or the Commission's
regulations, other than the rule adopted in Order No. 871, addresses
the timing of authorizations to commence construction or prevents
the Commission from acting on rehearing prior to issuing an
authorization to proceed with construction).
\68\ See, e.g., Batterton v. Marshall, 648 F.2d 694, 707 (D.C.
Cir. 1980) (``A useful articulation of the [rule of agency
organization, procedure, or practice] exemption's critical feature
is that it covers agency actions that do not themselves alter the
rights or interests of parties, although it may alter the manner in
which the parties present themselves or their viewpoints to the
agency.'').
---------------------------------------------------------------------------
32. Order No. 871 is premised on the Commission's desire to balance
its commitment to expeditiously respond 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.\69\ In Order No. 871-B, we cited the average 85-day span
between an initial authorizing order and issuance of a construction
authorization only to illustrate that in many cases construction cannot
begin immediately upon issuance of an order authorizing new facilities
under NGA sections 3 or 7.\70\
---------------------------------------------------------------------------
\69\ Order No. 871, 171 FERC ] 61,201 at P 11.
\70\ See Order No. 871-B, 175 FERC ] 61,098 at P 37.
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B. Policy of Presumptively Staying Section 7(c) Certificate Orders
33. In Order No. 871-B, the Commission announced a new policy of
presumptively staying an NGA section 7(c) certificate order during the
30-day period for seeking rehearing and pending Commission resolution
of any timely requests for rehearing filed by a landowner, until the
earlier of the date on which the Commission (1) issues a substantive
order on rehearing or otherwise indicates that the Commission will not
take further action, or (2) 90 days following the date that a request
for rehearing may be deemed to have been denied under NGA section
19(a). We explained that this policy will not apply where the pipeline
developer has, at the time of the certificate order, already acquired
all necessary property interests or where no landowner protested the
section 7 application. In addition, we explained that the stay will
automatically lift following the close of the 30-day period for seeking
rehearing if no landowner files a timely request for rehearing of the
certificate order. As we explained, this policy balances the competing
interests at stake, including the project developer's interest in
proceeding with construction when it has obtained all necessary
permits, and a project opponent's interest in being able to challenge
the Commission's ultimate decision in a timely manner.
1. Policy Does Not Violate NGA or APA
34. INGAA and Enbridge argue that the stay policy is unlawful,
under the NGA and the APA, because it seeks to achieve an objective--
conditioning a certificate holder's eminent domain authority--that is
directly prohibited by statute through indirect means.\71\ INGAA and
Enbridge contend that because the Commission has no authority to deny
or restrict certificate holders from exercising the power of eminent
domain, the Commission's new policy of presumptively staying its
section 7 certificate orders is an unlawful workaround of a statutory
prohibition and improperly limits a certificate holder's statutorily
conferred eminent domain authority.\72\
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\71\ INGAA Rehearing at 29-31; Enbridge Rehearing at 19-21.
\72\ See INGAA Rehearing at 29-30 (citing Civil Aeronautics Bd.
v. Delta Air Lines, Inc., 367 U.S. 316, 328 (1961); Cont'l Air
Lines, Inc. v. CAB, 522 F.2d 107, 115 (D.C. Cir. 1974)); Enbridge
Rehearing at 19-21.
---------------------------------------------------------------------------
35. INGAA and Enbridge further contend that the stay policy
violates section 19(c) of the NGA, which states that the filing of a
rehearing request ``shall not, unless specifically ordered by the
Commission, operate as a stay of the Commission's order.'' \73\ INGAA
maintains that the Commission, by announcing in Order No. 871-B a
general policy of presumptively staying certificate orders pending
rehearing, acted in general, rather than with the specificity that NGA
section 19(c) demands.\74\ INGAA further asserts that the policy is
unlawful because it will result in the Commission staying its orders
before either a rehearing request has been filed or a stay has been
sought, an outcome not contemplated by the NGA.\75\ Finally, INGAA
takes issue with the Commission's position that its authority to stay a
certificate order is found in the APA, arguing that section 705 of that
act authorizes the Commission to postpone the effective date of its
actions only ``pending judicial review,'' and that this authority is
inapplicable prior to the filing of a request for rehearing and while
such request is pending before the Commission.\76\
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\73\ INGAA Rehearing at 31 (quoting 15 U.S.C. 717r(c)); see
Enbridge Rehearing at 16-19.
\74\ INGAA Rehearing at 31. INGAA notes that the word specific
means ``[o]f, relating to, or designating a particular . . . thing''
and that if the Commission wants to grant a stay, it must do so
based on the particular facts of a particular case. Id. at 32.
\75\ Id.
\76\ Id. at 33 (citing 5 U.S.C. 705).
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36. As explained in Order No. 871-B, NGA section 16 gives the
Commission an independent basis for granting stays of a certificate
order.\77\ Specifically, section 16 provides that ``[t]he Commission
shall have the power to perform any and all acts, and to prescribe,
issue, make, amend, and rescind such orders, rules, and regulations as
it may find necessary or appropriate to carry out the provisions
[[Page 43083]]
of this [Act].'' \78\ Section 16 also mandates that Commission orders
``shall be effective on the date and in the manner which the Commission
shall prescribe.'' \79\ Thus, the NGA provides the Commission with
broad authority to take actions necessary to carry out the act, and we
find that, given the significant consequences that eminent domain has
for landowners, issuance of a stay of a certificate order under certain
narrowly prescribed circumstances is well within this authority.
Because NGA section 16 is broadly applicable, the Commission utilizes
the standard set forth in APA section 705 to determine whether a stay
is justified.\80\ But the Commission's underlying authority derives
from NGA section 16.
---------------------------------------------------------------------------
\77\ 15 U.S.C. 717o; see Pub. Util. Dist. No. 1 of Okanogan
Cty., Wash., 162 FERC ] 61,040, at P 13 (2018) (Okanogan PUD)
(addressing analogous provision of the Federal Power Act (FPA))
(citing 16 U.S.C. 825h; Kings River Conservation Dist., 30 FERC ]
61,151, at 61,320 (1985) (``The Commission's authority to issue a
stay of a license order is derived primarily from Section 309 of the
[FPA]''); Keating v. FERC, 569 F.3d 427, 429 (D.C. Cir. 2009)
(noting that FERC has stayed the commencement of construction
deadline pursuant to section 309 of the FPA)). The courts have held
that the NGA and FPA should be interpreted consistently. See Env'tl
Action v. FERC, 996 F.2d 401, 410 (D.C. Cir. 1993); Tenn. Gas
Pipeline Co. v. FERC, 860 F.2d 446, 454 (D.C. Cir. 1988); see also
Ark. La. Gas Co. v. Hall, 453 U.S. 571, 577 n.7 (1981).
\78\ 15 U.S.C. 717o.
\79\ Id.
\80\ Under the APA, an agency may issue a stay of its order
where the ``agency finds that justice so requires.'' 5 U.S.C. 705.
In determining whether this standard has been met, we consider
several factors, including: (1) Whether a stay is necessary to
prevent irreparable injury; (2) whether issuing a stay may
substantially harm other parties; and (3) whether a stay is in the
public interest. See, e.g., Millennium Pipeline Co., L.L.C., 141
FERC ] 61,022, at P 13 (2012); Ruby Pipeline, L.L.C., 134 FERC ]
61,103, at P 17 (2011). But see Okanogan PUD, 162 FERC ] 61,040 at P
13, n.21 (explaining, in the hydroelectric licensing context, that
``[p]reviously, the Commission has applied different standards than
the one set forth in section 705 of the APA.'') (citing Monongahela
Power Co., 7 FERC ] 61,054 (1979) (``we considered [the motions for
stay] under the standards of Virginia Jobbers Association v. FPC,
259 F.2d 291 (D.C. Cir. 1958) and Washington Metropolitan Area
Transit Commission v. Holiday Tours, Inc., 559 F.2d 841 (D.C. Cir.
1977)''); Nantahala Power & Light Co., 20 FERC ] 61,026 (1982)
(``finding that a stay pending rehearing is in the `public interest'
''); Kings River Conservation Dist., 27 FERC ] 61,098 (1984) (``[i]t
is appropriate and in the public interest to stay the license issued
in Project No. 2890 until completion of judicial review.'')).
---------------------------------------------------------------------------
37. In any event, we disagree with INGAA's argument that APA
section 705, which authorizes an agency to postpone the effective date
of its actions ``pending judicial review,'' \81\ means that a stay
issued pursuant to this authority must be connected to ongoing judicial
review proceedings and is thus inapplicable to any proceedings before
the Commission that precede judicial review (e.g., the time for filing
and considering requests for rehearing).\82\ INGAA construes the
statute too narrowly. The clause ``pending judicial review'' in section
705 could reasonably be construed as ``in anticipation of'' in which
case all that is required is that the Commission reasonably
anticipate--because rehearing has been sought or a proposal has been
strongly protested--that a party will seek judicial review.
---------------------------------------------------------------------------
\81\ 5 U.S.C. 705.
\82\ See INGAA Rehearing at 33. Indeed, a request for rehearing
does not simply precede, but is a mandatory prerequisite to,
judicial review. 15 U.S.C. 717r(b).
---------------------------------------------------------------------------
38. Further, in Order No. 871-B, the Commission announced only a
general policy with respect to stays.\83\ Accordingly, although
contained in a final rule, the Commission's discussion of that general
policy did nothing more than explain how the Commission intends to
approach a particular set of questions in the future without
conclusively resolving those questions or otherwise fixing any rights
or responsibilities.\84\ Indeed, as explained in Order No. 871-B, the
Commission intends to make a particularized application of the policy
in individual certificate orders and parties to those individual
proceedings will have the opportunity to challenge the Commission's
determination on whether to issue a stay in those proceedings. Notably,
the Commission has issued five certificate orders since adopting the
policy reflected in Order No. 871-B, with none of those orders
containing a stay along the lines contemplated in Order No. 871-B.\85\
---------------------------------------------------------------------------
\83\ General statements of policy are not be subject to pre-
enforcement judicial review. Nat'l Min. Ass'n v. McCarthy, 758 F.3d
243, 251 (D.C. Cir. 2014) (citing Nat'l Park Hosp. Ass'n v. Dep't of
Interior, 538 U.S. 803, 809-11 (2003)).
\84\ See, e.g., INGAA v. FERC, 285 F.3d 18, 59-61 (D.C. Cir.
2002) (finding Commission's discussion of seasonal rates within a
final rule ``represents only a policy statement and therefore is
neither binding on any party nor ripe for judicial review''); Am.
Gas Ass'n v. FERC, 888 F.2d 136, 151-52 (D.C. Cir. 1989) (finding
challenges to substantive aspects of Commission's cost recovery
policy statement not ripe for review); Pac. Gas & Elec. Co. v. FPC,
506 F.2d 33, 35 (D.C. Cir. 1974) (finding Order No. 467, a policy
proposal on delivery priorities by natural gas companies during
curtailment periods, to be a general statement of policy that was
not reviewable under NGA section 19(b) because it lacked
``sufficiently immediate and significant impact upon petitioners'').
That is consistent with the Commission's long-standing approach of
articulating its policies with respect to NGA section 7 certificate
applications, while leaving all actual findings and determinations
for future proceedings. See, e.g., Certification of New Interstate
Natural Gas Pipeline Facilities, 88 FERC ] 61,227, corrected, 89
FERC ] 61,040 (1999), clarified, 90 FERC ] 61,128, further
clarified, 92 FERC ] 61,094, at 61,375 (2000) (explaining that the
purpose of the Certificate Policy Statement is ``to provide the
natural gas industry with guidance by stating the analytical
framework the Commission will use to evaluate proposals for
certificating new construction'' and that ``generally objections to
such a statement are not directly reviewable. Rather, such review
must await implementation of the policy in a specific case.''). In
line with that interpretation, the discussion in Order No. 871-B
regarding how the Commission will approach those future cases was
not accompanied by any revisions to the Commission's rules or
regulations.
\85\ See Tuscarora Gas Transmission Co., 175 FERC ] 61,147
(2021); N. Natural Gas Co., 175 FERC ] 61,146 (2021); Enable Gas
Transmission, LLC, 175 FERC ] 61,183 (2021); WBI Energy
Transmission, Inc., 175 FERC ] 61,182 (2021); N. Natural Gas Co.,
175 FERC ] 61,238 (2021). There were no landowner protests in any of
these cases.
---------------------------------------------------------------------------
39. Contrary to INGAA's and Enbridge's assertions, nothing in NGA
section 19(c), which on its face contemplates that the Commission may
stay its own orders, precludes the Commission from determining that a
stay of an individual certificate order during the 30-day period for
seeking rehearing. Section 19(c) provides that a request for rehearing
does not automatically stay a Commission order.\86\ That section does
not speak to, or otherwise limit, the Commission's authority to issue a
stay of its own accord. As described above, NGA section 16 provides the
Commission with broad authority to issue a stay where warranted by the
facts and circumstances in a particular proceeding.
---------------------------------------------------------------------------
\86\ See 15 U.S.C. 717r(c) (``The filing of an application for
rehearing . . . shall not, unless specifically ordered by the
Commission, operate as a stay of the Commission's order.'').
---------------------------------------------------------------------------
2. Qualifying Landowner Rehearing Requests
40. Enbridge seeks clarification that, for the purpose of the
policy, the term ``landowner'' means ``directly affected'' landowner,
as defined by the Commission's regulations, or, in the alternative,
rehearing.\87\ This clarification, Enbridge maintains, would align with
the Commission's justification for the policy as it would ensure that a
stay is applied only when a ``protest or request for rehearing is
submitted by the owner of property that would be subject to an eminent
domain proceeding (i.e., to directly affected landowners), and not
owners of property that merely abuts the construction right-of-way or
falls within a certain radius of compressor station construction or
storage facilities.'' \88\
---------------------------------------------------------------------------
\87\ Enbridge Rehearing at 14-16 (citing 18 CFR 157.6(d)(2)(i)
(2020)).
\88\ Id. at 15 (citing 18 CFR 157.6(d)(2)(i)).
---------------------------------------------------------------------------
41. As a general matter, we agree with Enbridge's suggestion that
the policy is intended to protect those whose property would be crossed
or used by the proposed pipeline project as these are the landowners
whose property rights could be acquired by the eminent domain authority
that NGA section 7(h) confers upon certificate holders.\89\ Should the
issue of a landowner's specific property interests arise in a
[[Page 43084]]
proceeding, the Commission will consider it.
---------------------------------------------------------------------------
\89\ See 15 U.S.C 717f(h) (authorizing certificate holders to
acquire by eminent domain ``the necessary right-of-way to construct,
operate, and maintain a pipe line or pipe lines for the
transportation of natural gas, and the necessary land or other
property, in addition to right-of-way, for the location of
compressor stations, pressure apparatus, or other stations or
equipment necessary to the proper operation of such pipe line or
pipe lines''); see also 18 CFR 157.6(d)(2)(i) (defining directly
affected landowners).
---------------------------------------------------------------------------
3. Commitment To Refrain From Exercise of Eminent Domain
42. Enbridge seeks clarification that the Commission will promptly
lift a stay following a certificate holder's commitment that it will
not exercise its right of eminent domain ``for any reason other than to
obtain the access necessary to complete surveys'' while a qualifying
landowner rehearing request is pending,\90\ or, in the alternative,
rehearing.
---------------------------------------------------------------------------
\90\ Enbridge Rehearing at 21-23.
---------------------------------------------------------------------------
43. In Order No. 871-B, the Commission explained that a developer
may file a motion seeking ``to preclude, or lift, a stay based on a
showing of significant hardship,'' and expressly stated ``that a
commitment by the pipeline developer not to begin eminent domain
proceedings until the Commission issues a final order on any landowner
rehearing requests will weigh in favor of granting such a motion.''
\91\ We reiterate that conclusion, but will not pre-judge the merits of
any motion along the lines contemplated in Order No. 871-B. As with the
other aspects of this policy, those determinations will be made in any
future proceeding.
---------------------------------------------------------------------------
\91\ Order No. 871-B, 175 FERC ] 61,098 at P 51.
---------------------------------------------------------------------------
4. Claims of Burden Shifting
44. INGAA argues that the Commission unlawfully shifted to pipeline
developers the burden of proof to show that a stay is not warranted and
argues that such a change in policy can only be accomplished through
notice and comment rulemaking.\92\ INGAA contends that the Commission
failed to provide justification for its departure from past practice
and failed to explain why it is permissible to shift this burden.\93\
Enbridge makes a similar argument, but takes it a step further arguing
that the Commission failed to ``assess whether there were reliance
interests, determine whether they were significant, and weigh any such
interests against competing policy concerns.'' \94\ INGAA requests
further clarification regarding how the Commission will determine when
a stay should be issued and how specifically a developer can overcome
the presumption that a stay will be granted.\95\
---------------------------------------------------------------------------
\92\ See INGAA Rehearing at 33-35.
\93\ Id. at 33-34.
\94\ Enbridge Rehearing at 18-19.
\95\ INGAA Rehearing at 34-35.
---------------------------------------------------------------------------
45. In Order No. 871-B, the Commission acknowledged that the stay
policy is a departure from past practice and explained its belief that
``this new policy better balances the relevant considerations--such as
fairness, due process, and developer certainty--thereby justifying the
change in policy.'' \96\ We disagree with the petitioners that this
policy improperly shifts the burden to pipeline developers. As we
previously explained, the Commission will determine whether to impose a
stay based on the circumstances presented in each particular
certificate proceeding--the burden is not on the pipeline. Rather, the
Commission is obligated to ensure that all of its decisions, including
whether to impose a stay in individual certificate proceedings, are
supported by the record and reasonably explained.\97\ And parties to
those individual proceedings will have the opportunity to provide input
to and challenge the Commission's decision to issue a stay, or not, in
those proceedings.
---------------------------------------------------------------------------
\96\ Order No. 871-B, 175 FERC ] 61,098 at P 49, n.101.
\97\ See 15 U.S.C. 717r(b); 5 U.S.C. 706.
---------------------------------------------------------------------------
46. We further disagree with INGAA's assertion that public notice
and comment was required prior to the Commission announcing the stay
policy. General statements of policy, such as the one announced in
Order No. 871-B, are exempted from the APA's notice and comment
procedures.\98\
---------------------------------------------------------------------------
\98\ 5 U.S.C. 553(b)(A).
---------------------------------------------------------------------------
5. Consideration of Industry Concerns
47. INGAA contends that the Commission both failed to sufficiently
appreciate the harm that will befall the natural gas industry and to
explain what activities certificate holders can perform while a stay is
in place.\99\ INGAA points to the length of this proceeding to cast
doubt on the Commission's statement that it has increased the speed
with which it resolves rehearing requests.\100\ It also seeks further
clarity regarding the types of activities that certificate holders may
undertake while a stay is in place.
---------------------------------------------------------------------------
\99\ See INGAA Rehearing at 35-39.
\100\ Id. at 36.
---------------------------------------------------------------------------
48. The Commission fully considered industry concerns and
ultimately concluded that the stay policy announced in Order No. 871-B
struck an appropriate balance between the interests of pipeline
developers and landowners.\101\ The rehearing process in this
rulemaking proceeding, involving generally applicable policy
considerations, is not representative of the increased speed with which
the Commission handles project-specific rehearing requests in the post-
Allegheny era. In fact, the Commission continues to strive to act on
landowner rehearing requests (the subset of rehearing requests that may
result in a stay extending beyond the 30-day period for seeking
rehearing) within 30 days. The petitioners do not cite an instance of a
delay in the Commission's issuance of an order on rehearing of a
certificate order. While a stay is intact, certificate holders can
engage only in those development activities that they were free to
undertake prior to receiving a certificate order, such as negotiating
easement agreements with landowners and conducting environmental
surveys on private property they have permission to access.
---------------------------------------------------------------------------
\101\ See Order No. 871-B, 175 FERC ] 61,098 at PP 48-51.
---------------------------------------------------------------------------
6. Landowner Ability To Seek Judicial Stay
49. Finally, INGAA asserts that the Commission failed to explain
why the policy is necessary in light of an aggrieved party's ability to
seek a stay from a reviewing court after a request for rehearing is
deemed denied.\102\
---------------------------------------------------------------------------
\102\ INGAA Rehearing at 39.
---------------------------------------------------------------------------
50. As the Commission explained in Order No. 871-B, certificate
holders can, and routinely do, initiate condemnation proceedings
immediately upon receipt of a certificate order.\103\ Absent a stay in
a particular proceeding, certificate holders have the ability to
initiate condemnation actions against landowners prior to the
expiration of the 30-day period for seeking rehearing, and prior to the
30-day period for the Commission to act on such a request before it may
be deemed denied. This leaves a gap of approximately 60 days preceding
a deemed denial and during which time landowners could be susceptible
to condemnation proceedings being initiated prior to a reviewing court
obtaining concurrent jurisdiction following the filing of a petition
for review.\104\ As we explained at length in Order No. 871-B, this
Commission finds the fundamental unfairness that could result from that
outcome untenable. Further, the stay policy is an appropriate exercise
of our authority, and there is no need to leave these matters solely to
the courts.
---------------------------------------------------------------------------
\103\ See, e.g., Allegheny, 964 F.3d at 6.
\104\ See, e.g., Envtl. Def. Fund v. FERC, No. 20-1016, et al.,
2021 WL 2546672, at *8, *15 (D.C. Cir. June 22, 2021) (citing to
relevant pipeline's use of eminent domain in support of court's
decision to vacate certificate order).
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C. Commission Determination
51. In response to INGAA's, Enbridge's, and Mountain Valley's
requests for rehearing, Order No. 871-B is hereby modified and the
result
[[Page 43085]]
sustained, as discussed in the body of this order.
III. Document Availability
52. 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 (<a href="http://www.ferc.gov">http://www.ferc.gov</a>). 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).
53. 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.
54. 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
<a href="/cdn-cgi/l/email-protection#bddbd8cfded2d3d1d4d3d8cec8cdcdd2cfc9fddbd8cfde93dad2cb"><span class="__cf_email__" data-cfemail="4c2a293e2f2322202522293f393c3c233e380c2a293e2f622b233a">[email protected]</span></a>, or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at
<a href="/cdn-cgi/l/email-protection#403035222c29236e3225262532252e2325322f2f2d00262532236e272f36"><span class="__cf_email__" data-cfemail="29595c4b45404a075b4c4f4c5b4c474a4c5b464644694f4c5b4a074e465f">[email protected]</span></a>.
IV. Dates
55. The effective date of the document published on May 13, 2021
(86 FR 26,150), is confirmed: June 14, 2021.
By the Commission. Commissioner Chatterjee is not participating.
Commissioner Danly is dissenting with a separate statement attached.
Issued: August 2, 2021.
Debbie-Anne A. Reese,
Deputy Secretary.
DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
Limiting Authorizations To Proceed With Construction Activities Pending
Rehearing
DANLY, Commissioner, dissenting:
1. I dissent in full from today's order affirming the majority's
modification and expansion of Order No. 871.\1\ As I stated in my
dissent in Order No. 871-B, I would repeal the rule as it is no longer
required by law or prudence.\2\ I write separately today to further
explain how the Commission's new, unnecessary, and unjustifiable
presumption to stay certificate orders conflicts with the plain text of
the Natural Gas Act (NGA) and is beyond the Commission's authority.\3\
I also write to explain how the majority's presumptive stay is not
based on reasoned decision making and therefore runs afoul of the
Administrative Procedure Act (APA).
---------------------------------------------------------------------------
\1\ See Limiting Authorizations to Proceed with Construction
Activities Pending Rehearing, 176 FERC ] 61,062 (2021) (Order No.
871-C).
\2\ See Limiting Authorizations to Proceed with Construction
Activities Pending Rehearing, 175 FERC ] 61,098 (2021) (Danly,
Comm'r, dissenting at P 2) (Order No. 871-B).
\3\ See id. (Danly, Comm'r, dissenting at PP 3, 6-14).
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I. The Presumptive Stay Is Beyond the Commission's Authority and
Contrary to the Plain Text of the Natural Gas Act
2. In today's order, the majority states ``the Commission's
underlying authority derives from NGA section 16.'' \4\ Specifically,
the majority relies on the provisions providing the Commission
authority ``to perform any and all acts . . . necessary or appropriate
to carry out the provisions of this [Act]'' and to determine the
effective date of its orders.\5\ Like many before it, the majority has
turned to NGA section 16 when all else has failed, placing more weight
upon this section than it can reasonably bear. NGA section 16 ``do[es]
not confer independent authority to act.'' \6\ It is ``of an
implementary rather than substantive character'' and ``can only be
implemented `consistently with the provisions and purposes of the
legislation.\7\' '' The majority, however, fails to confront this
limitation on section 16's reach and employs this provision in a manner
that contravenes the NGA in three respects.
---------------------------------------------------------------------------
\4\ Order No. 871-C, 176 FERC ] 61,062 at P 36.
\5\ Id. (quoting 15 U.S.C. 717o).
\6\ New England Power Co. v. Fed. Power Comm'n, 467 F.2d 425,
431 (D.C. Cir. 1972), aff'd, 415 U.S. 345 (1974).
\7\ Id. at 430 (citation omitted).
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3. First, the majority's policy denies pipelines holding
certificates the ability to exercise eminent domain for up to 150
days--doing exactly what the majority explicitly concedes it cannot do:
``restrict the power of eminent domain in a section 7 certificate.''
\8\ NGA section 7(h) authorizes ``any holder of a certificate'' to
exercise eminent domain authority.\9\ Other than the issuance of a
certificate, Congress ordained no other condition be met in advance of
a pipeline pursuing eminent domain. The Commission can only employ NGA
section 16 in a manner consistent with the other provisions of the act.
Here, the use of section 16 is in direct in conflict with the statute--
and the majority does not see fit to argue otherwise.
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\8\ Order No. 871-B, 175 FERC ] 61,098 at P 45 (citation
omitted). Indeed, Order No. 871-B quotes the Berkley v. Mountain
Valley Pipeline, LLC, as stating, ``FERC does not have discretion to
withhold eminent domain once it grants a Certificate.'' Id. P 45
n.86 (quoting Berkley v. Mountain Valley Pipeline, LLC, 896 F.3d
624, 628 (4th Cir. 2018)) (emphasis added).
\9\ 15 U.S.C. 717f(h) (emphasis added).
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4. Second, presumptively staying a pipeline's ability to pursue
eminent domain is not appropriate under section 16 because such a delay
is not a ``necessary or appropriate'' adjunct to the Commission's
effectuation of its responsibilities under section 7 of the NGA. That
section requires the Commission to issue certificates to applicants
whose proposed natural gas facilities are found to be in the public
convenience and necessity. The timing of a pipeline's use of eminent
domain does not weigh into the Commission's determination of whether
proposed pipeline facilities are in the public convenience and
necessity. If it did, the majority would rely on the Commission's
authority under NGA section 7(e) to ``attach to the issuance of the
certificate . . . such reasonable terms and conditions as the public
convenience and necessity may require.'' \10\ The majority, however,
does not.\11\ Nor does the majority cite any other provision of the NGA
for which the Commission's action would be ``necessary or appropriate''
under section 16.
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\10\ 15 U.S.C. 717f(e).
\11\ See Order No. 871-B, 175 FERC ] 61,098 at P 45 (``In other
words, the Commission lacks the authority to deny or restrict the
power of eminent domain in a section 7 certificate.'') (citation
omitted).
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5. Third, the only reasonable reading of NGA section 7 leads to the
conclusion that Congress intended for certificates to be effective upon
issuance and acceptance, and for the right to exercise eminent domain
to attach thereupon. NGA section 7(e) provides, ``a certificate shall
be issued'' so long as the applicant is ``able and willing properly to
do the acts . . . .'' \12\ Further, NGA section 7(h) authorizes ``any
holder of a certificate of public convenience and necessity'' to
acquire by eminent domain the land necessary for the construction,
operation, and maintenance of its pipeline facilities.\13\ Black's Law
Dictionary defines ``holder'' as ``[a] person with legal possession of
a document of title or an investment security,'' meaning that the title
was issued and accepted by that person.\14\ This view has been shared
by the
[[Page 43086]]
courts \15\ and the Commission.\16\ This is not to say that the
Commission can never make a certificate effective after its issuance or
stay a certificate order. Both may be warranted in certain instances.
In my view, however, it is contrary to the purpose of the NGA to adopt
a policy that presumptively stays certificates for the avowed purpose
of delaying a pipeline's Congressionally-authorized entitlement to
exercise eminent domain.\17\
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\12\ 15 U.S.C. 717f(e) (emphasis added).
\13\ Id. Sec. 717f(h) (emphasis added).
\14\ Holder, Black's Law Dictionary (11th ed. 2019).
\15\ See Maritimes & Ne. Pipeline, L.L.C. v. Decoulos, 146 F.
App'x 495, 498 (1st Cir. 2005) (``Once a CPCN is issued by the FERC,
and the gas company is unable to acquire the needed land by contract
or agreement with the owner, the only issue before the district
court in the ensuing eminent domain proceeding is the amount to be
paid to the property owner as just compensation for the taking.'')
(emphasis added); E. Tenn. Nat. Gas Co. v. Sage, 361 F.3d 808, 818
(4th Cir. 2004) (``Once FERC has issued a certificate, the NGA
empowers the certificate holder to exercise `the right of eminent
domain' over any lands needed for the project.'') (emphasis added);
Bohon v. FERC, No. 20-6 (JEB), slip op. at 2 (D.D.C. May 6, 2020)
(``FERC's issuance of a certificate, moreover, conveys the power of
eminent domain to its holder.'') (emphasis added); Paul H. Stitt &
Loretta Stitt, 39 F.P.C. 323, 324 (1968) (``While the condemnation
powers granted to certificate holders by Section 7(h) of the Natural
Gas Act operate prospectively from the date of issuance of a
certificate . . . .'') (emphasis added).
\16\ See 18 CFR 157.20(a) (2020) (``The certificate shall be
void and without force or effect unless accepted in writing by
applicant . . . .'').
\17\ This is and separate apart from the argument that I raised
in my earlier dissent that NGA section 19(c), while allowing for
stays, requires a specific order by the Commission. Order No. 871-B,
175 FERC ] 61,098 (Danly, Comm'r, dissenting at PP 8-10; see also 15
U.S.C. 717r(c) (``The filing of an application for rehearing under
subsection (a) shall not, unless specifically ordered by the
Commission, operate as a stay of the Commission's order.'').
Clearly, an automatically-applied presumption is not a specific
order and thus violates the unambiguous terms of the statute.
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6. In addition to NGA section 16, the majority appears to place
some reliance on APA section 705, which provides ``[w]hen an agency
finds that justice so requires, it may postpone the effective date of
action taken by it, pending judicial review.'' \18\ I presume this is
the case because the majority responds to arguments raised by the
Interstate Natural Gas Association of America (INGAA) that the phrase
``pending judicial review'' in APA section 705 means an agency stay
must be ``tied to litigation.'' \19\ The majority asserts that a more
reasonable interpretation of the phrase ``pending judicial review'' is
``in anticipation of [judicial review].'' \20\ I've found no court that
supports that position and multiple courts, in fact, disagree.\21\
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\18\ 5 U.S.C. 705.
\19\ Order No. 871-C, 176 FERC ] 61, 61,062 at P 37, n.82
(citing INGAA Rehearing at 33).
\20\ Id. P 37.
\21\ Nat. Res. Def. Council v. U.S. Dep't of Energy, 362 F.
Supp. 3d 126, 150 (S.D.N.Y. 2019) (``A stay is supposed to be
grounded on `the existence or consequences of the pending
litigation.' ''); Bauer v. DeVos, 325 F. Supp. 3d 74, 106 (D.D.C.
2018) (``Most significantly, the relevant equitable considerations
are not free-floating but, rather, must be tied to the underlying
litigation. Section 705 expressly provides that an agency may
'postpone the effective date of [agency] action . . . pending
judicial review.' '') (emphasis in original); Sierra Club v.
Jackson, 833 F. Supp. 2d 11, 34 (D.D.C. 2012) (``Where, as in this
case, [an agency] seeks to justify a stay of its rules `pending
judicial review,' the agency must have articulated, at a minimum, a
rational connection between its stay and the underlying litigation
in the court of appeals.'').
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II. Presumptive Stay Is Not Based on Reasoned Decision Making
7. To the extent the majority merely argues that it can apply the
three factors of the equitable standard set forth in APA section 705 to
determine whether a stay is warranted, I agree. However, the majority's
application of the equitable standard is not based on reasoned decision
making, and thus violates the APA.\22\
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\22\ Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 30 (1983). See also Elec. Consumers
Res. Council v. FERC, 747 F.2d 1511, 1513-14 (D.C. Cir. 1984) (``We
defer to the agency's expertise . . . so long as its decision is
supported by `substantial evidence' in the record and reached by
`reasoned decision-making,' including an examination of the relevant
data and a reasoned explanation supported by a stated connection
between the facts found and the choice made.'') (citing Burlington
Truck Lines v. United States, 371 U.S. 156, 168 (1962); Memphis
Light, Gas & Water Div. v. FPC, 504 F.2d 225, 230 (D.C. Cir. 1974);
16 U.S.C. 825l (1982)).
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8. As I stated in my dissent to Order No. 871-B, the majority's
assumption that the mere existence of a ``landowner protest''
automatically means a stay is required in the interest of justice is--
at best--questionable.\23\ This represents a broad category of
litigant, whose mere participation in a proceeding would temporarily
extinguish a certificate holder's Congressionally-established rights.
Surely, the Commission should at least impose rational limits on the
rule they are establishing. For example, will the Commission stay a
certificate where there is a protest by a landowner with property
interests that abut the proposed right-of-way but are not subject to
condemnation? And the Commission's policy applies to where there is a
``landowner protest.'' Will the Commission apply the stay where a
landowner protested but did not intervene and thus cannot seek
rehearing or judicial review? What about in the case where the
landowner joined a protest, but may not have active interests in the
proceeding?
---------------------------------------------------------------------------
\23\ Order No. 871-B, 175 FERC ] 61,098 (Danly, Comm'r,
dissenting at P 8).
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9. The majority also fails to consider the second factor ``whether
issuing a stay may substantially harm other parties.'' Will the
Commission stay a certificate where the proposed project is delivering
natural gas to municipalities that need the gas within six months of
certificate issuance? Will the Commission stay a certificate if the
delay caused by its stay would cause an additional year's delay in
construction because of seasonal restrictions? To what degree will the
financial consequences for the project proponent be considered? What
about the consequences to the pipeline's customers? It is not
inconceivable that those projects whose applications have been pending
for more than a year ultimately will be canceled as a result of
delay.\24\ How can the potential cancellation of a project that has
been determined by the Commission to be in the public interest itself
be in the public interest or, under the second factor, be found not to
``substantially harm other parties''?
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\24\ See id. (Danly, Comm'r, dissenting at P 14) (noting
Dominion Energy Transmission, Inc. withdrew its application for a
certificate for its Sweden Valley Project that it had filed
seventeen months prior).
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III. Conclusion
10. The power of eminent domain is surely profound and formidable.
I cannot fault my colleagues for the anxiety they have expressed
regarding its wise and just exercise. However, the Commission, as a
mere ``creature of statute,'' can only act pursuant to law by which
Congress has delegated its authority.\25\ Congress conferred the right
to certificate holders to pursue eminent domain in federal district
court or state court,\26\ having recognized that states ``defeat[] the
very objectives of the Natural Gas Act'' \27\ by conditioning or
withholding the exercise of eminent domain. Congress has made that
determination. It has codified it into law. The Commission, as an
executive agency, is empowered only to implement Congressional mandate,
not to second-guess Congressional wisdom or attempt to do indirectly
what it cannot directly.\28\
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\25\ Atl. City Elec. Co. v. FERC, 295 F.3d 1, 8 (D.C. Cir. 2002)
(``As a federal agency, FERC is a 'creature of statute,' having `no
constitutional or common law existence or authority, but only those
authorities conferred upon it by Congress.''') (quoting Michigan v.
EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)) (emphasis in original);
see Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) (``It
is axiomatic that an administrative agency's power to promulgate
legislative regulations is limited to the authority delegated by
Congress.'').
\26\ See 15 U.S.C. 717f(h).
\27\ S. Rep. No. 80-429, at 3 (1947).
\28\ Richmond Power & Light v. FERC, 574 F.2d 610, 620 (D.C.
Cir. 1978) (``What the Commission is prohibited from doing directly
it may not achieve by indirection.'').
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11. Despite this, I doubt that the Commission's arguments will be
[[Page 43087]]
presented to the courts. It will be challenging for those that are
harmed by the issuance of a generally-applicable policy to show
aggrievement before it is actually applied in a case. And by the time
those harmed are able seek review, the damage of the stay will have
been done and the stay will have been lifted. My pessimistic outlook is
that despite this order's obvious infirmities, the Commission will
avoid judicial scrutiny and thereby thwart the intent of Congress.
For these reasons, I respectfully dissent.
-----------------------------------------------------------------------
James P. Danly,
Commissioner.
[FR Doc. 2021-16812 Filed 8-5-21; 8:45 am]
BILLING CODE 6717-01-P
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</html>Indexed from Federal Register on August 6, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.