FERC Issues Rules Implementing Energy Policy Act of 2005

EPAct 2005 codified the existing practice in which FERC is the lead agency for coordinating all federal authorizations for natural gas infrastructure projects for the purpose of complying with the National Environmental Policy Act (NEPA). EPAct 2005 also authorized FERC to establish a schedule for state agencies that are acting under delegated federal authority to complete their reviews of gas projects.

Under the new rule, FERC will set a schedule under which agencies must reach final regulatory decisions necessary for the approval of those projects. The deadline for final decisions will be 90 days after the FERC staff issues either an environmental assessment (EA) or an environmental impact statement (EIS) in a proceeding. FERC will issue a scheduling notice that includes target dates for issuance of the final EA or EIS, so that state agencies will have notice of the projected date by which they are to reach a decision on requested authorizations.

The FERC schedule will only apply to agencies implementing statutes that do not already have deadlines established by federal law. Thus, consistency determinations under the Coast Zone Management Act (CZMA) and permits under section 401 of the Clean Water Act, both of which have their own statutory procedures, will not be affected by the new rules.

EPAct 2005 also included provisions that create a direct, expedited appeal to the U.S. Court of Appeals to challenge an order, an action or the failure of an agency to act on a timely basis, and provide that the court can schedule a deadline for the agency to act on remand. A challenge to a failure to act must be brought in the U.S. Court of Appeals for the District of Columbia Circuit; a challenge to the merits of the agency action can be brought in the U.S. Court of Appeals where the project is located. These provisions of EPAct 2005 have already been employed by the Second Circuit Court of Appeals in reviewing the Connecticut Department of Environmental Protection’s (DEP) decision to deny a water quality permit for the Islander East Pipeline project. The court found that the state agency acting under delegated federal authority had not conducted a complete and reasoned review of a request for a federal authorization, and remanded the matter to the Connecticut DEP to act on the permit request within 75 days or abdicate its delegated federal authority. (Islander East Pipeline Co., LLC v. Connecticut Department of Environmental Protection, Docket No. 05-4139-ag (2d Cir., Oct. 5, 2006)). This civil action for the review of an agency’s action or failure to act on a requested authorization does not apply to CZMA determinations, since the Department of Commerce, not a federal court, is the body to review a failure to act on, or the outcome of, a CZMA request.

The new rule also requires FERC to maintain a complete, consolidated record of all agency decisions with respect to a particular gas infrastructure project. The record would serve as the -- basis for judicial appeals of Commission decisions, and reviews of state decisions that claim a gas project is inconsistent with coastal protections under the CZMA.