On January 24, 2025, FERC reinstated a certificate of public convenience and necessity (“CPCN”) for Transcontinental Gas Pipe Line Company’s (“Transco”) Regional Energy Access Expansion Project (“Project”) after the D.C. Circuit vacated and remanded FERC’s initial order certificating the Project (“Certificate Order”).
In January 2023, FERC granted Transco a CPCN to construct and operate the Project, which Transco explained is designed to expand Transco’s natural gas delivery capacity by 829,400 dekatherms per day to customers in New Jersey, New York, Pennsylvania, and Maryland. Several environmental organizations sought rehearing of the Certificate Order, arguing that FERC arbitrarily and capriciously ignored evidence of a lack of market need for the Project; violated the National Environmental Policy Act (“NEPA”) by declining to make a significance determination regarding the Project’s greenhouse gas (“GHG”) emissions; and improperly weighed the benefits and harms of the Project. FERC affirmed its grant of a CPCN on rehearing (“Rehearing Order”). The environmental organizations subsequently appealed the Certificate Order and Rehearing Order (collectively, the “Orders”) to the D.C. Circuit.
In October 2024, the D.C. Circuit vacated and remanded FERC’s Orders. The court held that precedent agreements were insufficient to demonstrate market need for the Project and faulted FERC for failing to adequately consider evidence suggesting a lack of need for the project, including specific studies indicating that current pipeline capacity was sufficient to meet demand and New Jersey state laws mandating reductions in natural gas consumption. The court also determined that FERC had failed to adequately explain its decision not to make a significance determination regarding the Project’s GHG emissions under NEPA (see October 14, 2024, edition of the WER).
On remand, FERC reaffirmed its earlier decision to grant a CPCN to Transco and expanded on its findings in the Orders in response to directives in the D.C. Circuit’s opinion. FERC affirmed the market need for the Project, emphasizing that precedent agreements remain a reliable indicator of such market need. Further, FERC argued that looking beyond precedent agreements into company procurement decisions is outside of its jurisdiction and best left to state regulators. FERC also pointed to market study evidence indicating that the Project will provide more reliable service on peak days and increase supply diversity in the serviced areas and responded in detail to the D.C. Circuit’s command to explain why it discredited other studies showing that the area’s current natural gas capacity was sufficient to meet demand. Additionally, FERC explained that the New Jersey law mandating reductions in natural gas consumption neither imposes a moratorium on new natural gas infrastructure nor is incompatible with the Project’s purpose of mitigating constraints during peak demand or diversifying supply.
FERC also affirmed its prior decision not to make a significance determination regarding GHG emissions. Citing the D.C. Circuit’s recent decisions in Food & Water Watch v. FERC and Citizens Action Coalition of Indiana, Inc. v. FERC, FERC stated that it need not label a project’s downstream emissions as significant or insignificant; that FERC may have done so in other cases does not reflect FERC policy or practice. Further, FERC explained that it is unable to characterize any project’s GHG emissions as significant or insignificant because there is no accepted method for doing so. While arguing that NEPA does not require particular environmental impact mitigation measures, FERC highlighted the various mitigation measures Transco has incorporated into the Project.
Finally, FERC concluded that the benefits of the Project outweigh its adverse impacts. According to FERC, the Project allows local distribution company customers to avoid projected peak day shortfalls, lowers costs, alleviates capacity constraints, strengthens reliability, and is already being used for power generation during winter conditions. FERC also emphasized the Project will have no negative economic impacts, and environmental impacts have been properly mitigated.
FERC’s order on remand allows the Project to continue operating to deliver natural gas to customers in the Northeast. The full order, issued in Docket No. CP21-94-003, can be accessed here.
