Federal appeals court overturns FERC approval of Transco Mid-Atlantic expansion project

On July 30, the United States Court of Appeals for the District of Columbia Circuit rejected the Federal Energy Regulatory Commission’s (FERC) approval of Transcontinental Gas Pipeline Co.’s nearly $1 billion Regional Energy Access expansion project, calling FERC’s decision “arbitrary and capricious” because it failed to adequately assess the pipeline’s potential greenhouse gas (GHG) emissions.

The three-judge panel also questioned whether FERC properly considered the public interest in the pipeline, which would increase Transco’s capacity by as much as 829,000 Dt/d, allowing it to serve about 3 million customers in five mid-Atlantic states.

“We maintain that FERC acted arbitrarily in issuing the certification order because it failed to address certain significant challenges to the determination of market need for the project,” U.S. District Judge J. Michelle Childs wrote.

The court found that FERC failed to explain why it “completely discredited” the findings of two market studies that found that current capacity was sufficient to meet the demand of New Jersey natural gas customers beyond 2030.

The document also fails to explain how the CEOs’ agreements with local distribution companies (LDCs) demonstrate market need “if those same companies can pass on the fixed costs of building pipelines to existing capacity customers while simultaneously profiting from selling excess capacity to others,” Childs wrote.

The court formally revoked the certification, noting that it was unclear whether FERC could correct the flaws in its order. It nonetheless said it was sending the case back to the commission for “appropriate action.”

This is the second time in the past month that the District of Columbia has challenged FERC’s inadequate review and subsequent approval of a natural gas infrastructure project. In a recent decision, the same court, but a different panel of judges, ordered FERC to reassess its approval of Commonwealth LNG LLC’s proposed 9.5-million-ton-per-year facility in Cameron Parish, Louisiana, saying FERC failed to adequately assess the project’s cumulative and direct environmental and health impacts, as required by the National Environmental Policy Act and the Natural Gas Act (OGJ Online, July 17, 2024). In this case, the court did not invalidate the certification.

A spokesman for Williams Corp., Transco’s parent company, said the decision “will not delay” plans to bring the plant into full operation. “We believe the court erred in revoking the certificate, and we are taking the necessary legal and regulatory steps to address the court’s concerns and ensure that the company’s much-needed capacity will continue to be available to meet the needs of our customers without disruption,” an OGJ spokesman said in an email.

A spokeswoman for FERC, which approved the project in January 2023, said the commission does not comment on litigation.

The majority of the project’s power would power LDCs in New Jersey, with the rest flowing to Delaware, Maryland, New York, and Pennsylvania. The project includes:

• new 22.3-mile, 30-inch pipe extension in Luzerne County, Pennsylvania.
• new 13.8-mile, 42-inch diameter pipe loop in Monroe County, Pennsylvania.
• new electric motor-driven compressor manufacturing facility in Gloucester County, New Jersey.
• modifications to the existing 505 Compressor Station in Somerset County, New Jersey, and 515 Compressor Station in Luzerne County.