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FERC overrides New York pipeline permit denial

15 Sep 2017, 4.47 pm GMT

FERC overrides New York pipeline permit denial

Washington, 15 September (Argus) — The US Federal Energy Regulatory Commission (FERC) today overruled New York's denial of a permit needed to expand the Millennium natural gas pipeline after finding the state waited too long to make a decision.

FERC found the New York Department of Environmental Conservation waived its authority to approve or deny a water permit for a 123mn cf/d (3mn m³/d) pipeline extension by exceeding a one-year decision deadline. The state should have reached a permitting decision by 23 November 2016 but instead waited an additional nine months before denying the permit.

The decision marks a major win for the natural gas sector, which argues New York has been using its water permitting authority under the Clean Water Act as an effective veto against pipelines. FERC's decision will allow Millennium to construct an 8-mile (13km) extension to the CPV Valley Energy Center, a 630MW power plant set to begin operations in February 2018.

Millennium applauded the decision and called it a "positive step forward" for the project. The company said it wanted to fully cooperate with New York on "all issues related to water" and would uphold an earlier agreement to minimize effects on water crossings and wetlands.

The New York Department of Environmental Conservation did not immediately respond for comment.

The permitting dispute centered on when the one-year deadline began for New York to act. Millennium said the clock started on 23 November 2015, when the state received the permit application. But the state argued the application needed changes and was not "complete" until 31 August 2016, which it said allowed it an additional nine months to finish its review.

New York denied the permit on 30 August for reasons unrelated to water quality. The state said that, based on a recent court ruling of an unrelatd pipeline in Florida, FERC's review of the project was "inadequate and deficient" because it did not estimate the greenhouse gas emissions from burning natural gas at the CPV Valley Energy Center.

FERC today did not address the merits of the permit denial. It instead found under the plain language of the Clean Water Act, New York only had one year after "receipt" of the permit application before the deadline expired. New York could have denied the water permit, the agency said, but only before the one-year deadline elapsed.

Natural gas groups cheered FERC's decision. The US Congress did not intend for a single state to be able to "unilaterally veto" pipeline projects and prevent neighboring states from accessing natural gas supplies by denying water permits," Natural Gas Supply Association president Dena Wiggins said.

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