Midcoast Interstate Transmission, Inc. v. Federal Energy Regulatory Commission

No. 98-1603 (198 F.3d 960) (D.C. Cir. January 18, 2000)

The court upholds two Federal Energy Regulatory Commission (FERC) orders granting a gas company's application to construct a natural gas pipeline that would service two Alabama cities and denying the alternative proposals of a competing gas company already servicing the cities. The court first holds that FERC properly granted the petitioning company's certificate to construct a new pipeline. Under the National Environmental Policy Act (NEPA), FERC took the required hard look at alternatives to the pipeline project and concluded that other values outweighed the project's limited environmental costs. Additionally, under NEPA, FERC did not err in rejecting the competing company's claims of economic superiority for its own alternatives. FERC properly took competition into consideration in determining whether to approve the petitioning company's application and reasonably concluded that the introduction of competition to the market would result in lower prices and better service.

The court next holds that it has jurisdiction to review FERC's decision to roll the cost of the pipeline construction into the petitioning company's systemwide rates. Accepting the accuracy of the competing company's calculation for the incremental rate the petitioning company would be required to charge, the court is satisfied that the competing company has been aggrieved. Moreover, the challenge is ripe for review because regardless of whether or not the rolled-in rates are imposed, the petitioning company will lose business in the market for an indeterminate amount of time following the completion of the pipeline project. However, the court further holds that FERC properly authorized rolling the cost of the pipeline construction into the petitioning company's systemwide rates. FERC's findings of systemwide benefits and a minimal rate impact are supported by substantial evidence. The court goes on to hold that FERC's dismissals of the competing company's petitions to expand were not unreasonable or an abuse of discretion. The petitions were dismissed due to the competing company's failure to comply with procedural and informational regulations. Finally, the court holds that FERC's issuance of the certificate to the petitioning company will serve the public convenience and necessity, and is, therefore, not a taking in violation of the Fifth Amendment to the U.S. Constitution.

The full text of this opinion is available from ELR (14 pp., ELR Order No. L-168).

Counsel for Petitioner
Bernard A. Foster III
Ross, Marsh & Foster
2001 L St. NW, Ste. 400, Washington DC 20036
(202) 822-8888

Counsel for Respondent
Monique Penn-Jenkins
Federal Energy Regulatory Commission
825 N. Capitol St. NE, Washington DC 20426
(202) 208-0200

[30 ELR 20299]

[NO TEXT IN ORIGINAL]