FERC Trumps New York’s Denial of Water Permit for CPV Pipeline

The scandal-plagued CPV power plant project is back on track again in the Hudson Valley thanks to federal intervention that cancels New York State’s denial of a crucial water quality permit.
But local residents, environmental groups and high profile activists view the Sept. 15 decision by the Federal Energy Regulatory Commission as an improper overreach, and they’ve launched a social media campaign to try to convince Gov. Andrew Cuomo to challenge it in federal court.
The tug of war between federal and state authority over a proposed natural gas pipeline to a nearly completed 650-megawatt gas-fired plant in Wawayanda is shaping up as perhaps the biggest environmental battle in New York since the 2014 push to ban fracking statewide.
Competitive Power Ventures, or CPV, is counting on a 7.8-mile spur pipeline to carry fracked gas from the Millennium Pipeline to the plant about 70 miles northwest of New York City.
FERC has ultimate regulatory authority over gas pipelines and many other energy projects, but states can weigh in on site plans and water permits.
On Aug. 30, the state Department of Environmental Conservation did just that — denying a Clean Water Act permit for the pipeline, which crosses several streams and wetlands.
Two weeks later, FERC overruled that state action, finding that the DEC’s decision was null and void because the agency had exceeded the legally allowed one-year period to review the case.
The clock on the one-year review period starts when a company applies for a permit. CPV applied in November 2015, but the DEC deemed the application insufficient and asserted that it remained incomplete until August 2016. The DEC contends that the permit denial fell within one year of its certification that CPV’s application was sufficient.
FERC didn’t buy that argument.
“By failing to act on Millennium’s request for certification by November 23, 2016, we find that the agency waived its certification authority,” FERC said in its Sept. 15 order. “To find otherwise would frustrate the purpose of the one-year review period … and allow state agencies to indefinitely delay proceedings by determining applications to be incomplete.”
On the other hand, FERC’s interpretation would open the door for pipeline applicants to submit grossly inadequate applications in order to start the clock and hamstring any potential state review. So Cuomo may have a strong case, if he chooses to pursue it.
”I think recent court decisions have affirmed states’ rights to make decisions about the water quality in their states and have upheld their authority,” Kelly Martin of the Sierra Club told Energywire. “I think this is an overreach by FERC.”
But energy industry officials applauded FERC’s ruling. Karen Moreau, executive director of the New York arm of the American Petroleum Institute, called it “a win for all who care about affordable energy, jobs and the environment.”
The rejection of New York’s permit denial was one of FERC’s first major decisions under its new chairman, Neil Chatterjee. President Donald Trump nominated Chatterjee in May, and he was confirmed in by the U.S. Senate Aug. 4. Chatterjee, a Kentucky native, is a former energy policy aide to Sen. Majority Leader Mitch McConnell (R-Kentucky).
Now environmental groups who have often encouraged actor James Cromwell (an Oscar nominee for his role in the 1995 movie “Babe”) to serve as their public face are urging Cuomo and the DEC to seek a stay in federal court to block the FERC overrule.
In a Sept. 26 social media appeal for petition signatures, Cromwell and Pramilla Malick wrote:
“We are up against two of the biggest companies in the world: TransCanada, the owner of Millennium, and General Electric, one of the owners of CPV. “Yet we have three compelling reasons on our side: the law, the science and the power of the people…You are the reason DEC denied the permit.”
Opponents of the CPV project argue that it undercuts Cuomo’s touted goal of cutting the state’s greenhouse gas emissions by 40% by 2030. But that didn’t prevent project backers from securing a state permit for plant construction amid a federal bribery probe that led to indictments of a top CPV official and a former top aide to Cuomo, Joe Percoco.
The project’s chief spokesman, Mike McKeon, also has ties to Cuomo, having served as executive director of Republicans for Gov. Andrew Cuomo in the 2010 election campaign.
New York State has 30 days to ask FERC for a rehearing. Or it can take its case to a federal appeals court.
The outcome of the FERC-versus-New York case could set the tone for other pending pipeline cases where the industry is hoping FERC will squash any moves by state regulators raise objections under Section 401 of the Clean Water Act.
Earlier this month, Energywire reported that National Fuel Gas Co. has asked FERC to help remove a such a roadblock for its Northern Access pipeline and that a spokesman for Constitution Pipeline Co. said it plans to try its luck with FERC too.
The Northern Access pipeline would cross 251 waterbodies, including 87 trout streams, over its nearly 100-mile stretch across western New York.
The proposed 124-mile Constitution Pipeline would impact 251 streams, nearly 500 acres of forests, and over 85 acres of wetlands in New York State.
The DEC denied Clean Water Act permits to both pipelines. And in August, the Second Circuit Court of Appeals rejected bids by both pipeline companies to throw out the state permit denials.