FERC finds against New York in Millennium Pipeline proceeding. On September 15, 2017, FERC issued a declaratory order finding that the New State Department of Environmental Conservation (“NYDEC”) waived its water quality certification authority pursuant to section 401 of the Clean Water Act with respect to the Millennium Pipeline Company Valley Lateral Project. Millennium Pipeline Company, L.L.C., 160 FERC ¶ 61,065 (2017). Millennium Pipeline Company, L.L.C. (“Millennium”) initially submitted its application for the water quality certification in November 2015. NYDEC sat on Millennium’s application prompting Millennium to petition the United States Court of Appeals for the District of Columbia Circuit pursuant to section 19(d)(2) of the Natural Gas Act for review. Millennium Pipeline Company, L.L.C. v. New York State Department of Environmental Conservation, United States Court of Appeals for the District of Columbia Circuit, (2017). Such provision authorizes the Court with “original and exclusive jurisdiction” to review “an alleged failure to act by a…State administrative agency acting pursuant to Federal law to issue, condition, or deny any permit required under Federal law.” 15 U.S.C. § 717r(d)(2). Judge Srinivasen dismissed Millennium’s petition for want of standing reasoning that because NYDEC already waived its authority to approve or disapprove Millennium’s water quality certificate application, there is nothing left for the court to do. Id. The court told Millennium to petition FERC and obtain a declaratory order finding NYDEC waived its authority under section 401 of the Clean Water Act (“CWA”), and less than one month later Millennium did just that, which led to the order discussed here. (For more background and a discussion on the matter before the D.C. Circuit see Millennium Pipeline Company, L.L.C. v. New York State Department of Environmental).
On July 21, 2017, Millennium filed a Request for Notice to Proceed with Construction of the Valley Lateral Project alleging that NYDEC waived its authority to issue a section 401 certification by failing to act within one year of November 23, 2015 – the date of receipt of Millennium’s application. Millennium cannot commence construction of its 7.8 mile pipeline lateral until it has obtained all federal authorizations, including but not limited to, section 401 certification. On July 26, 2017, NYDEC submitted comments on Millennium’s filing with FERC, predictably arguing that it has not waived its section 401 authority. Notably, on August 30, 2017, NYDEC issued an untimely Notice, purporting to deny Millennium’s section 401 certificate.
Pursuant to section 401 of the CWA, “[i]f the State, interstate agency, or Administrator, as the case may be, fails or refuses to act on a request for certification, within a reasonable period of time (which shall not exceed one year) after receipt of such request, the certification requirements of this subsection shall be waived with respect to such Federal application.” (Emphasis added). Millennium submitted its water quality certificate application on November 23, 2015, and argued that NYDEC’s one year review period began on that date. Whereas, NYDEC argued the one year review period did not begin until August 31, 2016, the day Millennium submitted a so-called “complete” application. FERC interpreted the plain meaning of section 401 of the CWA’s statutory language, finding that NYDEC’s one year review period began after the receipt of Millennium’s application, i.e., November 23, 2015. The Commission found that “the plain meaning of ‘after receipt of the request’ is the day the agency receives a certification application, as opposed to when the agency considers the application to be complete.” Millennium Pipeline Company, L.L.C., 160 ¶ 61,065 (2017), at P 13. (Emphasis added). FERC refers to the date that the one year review period ensues as the triggering date.
To support its opinion, the Commission relied on Georgia Strait Crossing Pipeline LP, 107 FERC ¶ 61,064 (2004), where it found the Washington Department of Ecology waived its section 401 authority because it took the agency two years after receipt of the company’s water quality certificate application to issue a Notice of denial. In a separate proceeding four years later, the State of Maryland argued that the triggering event occurs after the issuance of a draft Environmental Impact Statement, and again, the Commission ruled that “receipt” means “receipt of” the request for a water quality certification. AES Sparrows Point LNG, LLC, 129 FERC ¶ 61,245 (2009). To cement its decision, FERC walks through the evolution of its hydropower regulations. Most notably, “[i]n 1987, the Commission promulgated section 4.34(b)(5)(iii) of its regulations to make clear that receipt of a certification application [is] the triggering event.” Millennium Pipeline Company, L.L.C., 160 ¶ 61,065 (2017), at P 16; see also, Order No. 464, 52 Fed. Reg. 5446-01, 5446 (Feb. 23, 1987). (Emphasis added).
NYDEC can move for rehearing within 30 days of FERC’s final order, and then it may petition review to the appropriate Circuit Court of Appeals. Such a litigious posture could likely end in disaster for NYDEC considering Judge Srinivasen’s recent opinion in Millennium Pipeline Company, L.L.C. v. New York State Department of Environmental. There, the Court reviewed the same issue as briefed and argued by the same parties; however, this time, the judge would find standing and rule on merits, likely against NYDEC. “To find otherwise would frustrate the purpose of the one-year review period specified by the CWA and allow state agencies to indefinitely delay proceedings by determining applications to be incomplete.” Millennium Pipeline Company, L.L.C., 160 ¶ 61,065 (2017), at P 17. (Emphasis added).