Power & Pipes

FERC, CFTC, and State Energy Law Developments

FERC issued a final rule on March 18 amending its regulations to establish a one-year period for state agencies or other certifying authorities to act on requests for water quality certifications required for a certificate of public convenience and necessity for a natural gas pipeline or an authorization for an liquefied natural gas (LNG) terminal.

Section 401 of the Clean Water Act (CWA) grants states the authority to review for compliance with federal, state, and tribal water quality requirements any discharge into a water of the United States that may result from a proposed activity that requires a federal license or permit. An entity seeking a federal license or permit to conduct activities that may result in a discharge into US navigable waters must provide the federal permitting agency with a water quality certification from the state where the discharge originates or evidence of a waiver. If the state fails or refuses to act on a request for certification within one year, the certificate is waived.

Although the Commission’s practice is to categorically apply a one-year waiver period for water quality certification applications filed in connection with a proposed natural gas or LNG infrastructure project application, that practice has not been codified in the regulations applicable to infrastructure proceedings under the Natural Gas Act (NGA). Through this final rule, the Commission is revising its regulations governing applications for authorizations under NGA Sections 3 and 7 for LNG and natural gas facilities in Parts 153 and 157 to establish this categorical one-year waiver period. The Commission declined to establish case-by-case alternate waiver periods to eliminate the need to construe divergent state requirements.

The Commission added a new subpart (b) to Section 157.22, which applies to applications for a certificate of public convenience and necessity for a natural gas pipeline:

For requests for a water quality certification submitted pursuant to section 401(a)(1) of the Federal Water Pollution Control Act (Clean Water Act) in connection with a project for which authorization is sought from the Commission under section 3 or 7 of the Natural Gas Act, the reasonable period of time during which the certifying agency may act on the water quality certification request is one year from the certifying agency’s receipt of the request. A certifying agency is deemed to have waived the certification requirements of section 401(a)(1) of the Clean Water Act if the certifying agency has not denied or granted certification by one year after the date the certifying agency received a written request for certification.

The general requirements applicable to applications for authorization for an LNG terminal in Section 153.4 of the Commission’s regulations incorporate the procedures set forth in Section 157.22. These revisions will become effective 90 days after publication in the Federal Register.