Adelphia Gateway, LLC, 041620 FERC, CP18-46-002

Docket Nº:CP18-46-002
Party Name:Adelphia Gateway, LLC
Judge Panel:Before Commissioners: Neil Chatterjee, Chairman; Richard Glick, Bernard L. McNamee, and James P. Danly. Nathaniel J. Davis, Sr., Deputy Secretary. GLICK, Commissioner, dissenting in part: Richard Glick Commissioner
Case Date:April 16, 2020
Court:Federal Energy Regulatory Commission
 
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171 FERC ¶ 61, 049

Adelphia Gateway, LLC

No. CP18-46-002

United States of America, Federal Energy Regulatory Commission

April 16, 2020

Before Commissioners: Neil Chatterjee, Chairman; Richard Glick, Bernard L. McNamee, and James P. Danly.

ORDER DENYING REHEARING AND STAY

1. On December 20, 2019, the Commission issued an order under section 7 of the Natural Gas Act (NGA)[1] and Parts 157, Subpart F and 284, Subpart G of the Commission's regulations, 2 authorizing Adelphia Gateway, LLC (Adelphia) to acquire, construct, and operate a new interstate pipeline system in Delaware and Pennsylvania (the Adelphia Gateway Project).3 Delaware Riverkeeper Network and Delaware Riverkeeper (collectively, Delaware Riverkeeper), West Rockhill Township, and Sheila and Daniel McCarthy filed timely requests for rehearing of the Certificate Order.4Delaware Riverkeeper and West Rockhill Township also filed requests for stay of the Certificate Order. For the reasons discussed below, we deny the requests for rehearing and stay.

1.

Background

2. The Adelphia Gateway Project includes the purchasing and repurposing of an existing pipeline and metering facilities owned by Interstate Energy Company, LLC (Interstate Energy) in Pennsylvania and the construction of new pipeline laterals, compressors, and related facilities in Delaware and Pennsylvania.5 Specifically, Adelphia proposes to purchase and operate: (1) an approximately 84.2-mile-long, 18-inch-diameter mainline extending from the Marcus Hook Industrial Complex in Delaware County, Pennsylvania, to the Martins Creek Terminal in Northampton County, Pennsylvania; (2) an approximately 4.4-mile-long, 20-inch-diameter mainline originating in Northampton County, Pennsylvania, and terminating at the Martins Creek Terminal; (3) four meter stations; and (4) various appurtenant facilities.6

3. Additionally, Adelphia proposes to construct and integrate the following new facilities with the existing facilities: (1) a 5, 625-horsepower (hp) compressor station in Delaware County, Pennsylvania, consisting of three 1, 875-hp natural gas-fired reciprocating compressor units (Marcus Hook Compressor Station); (2) a 5, 625-hp compressor station in Bucks County, Pennsylvania, consisting of three 1, 875-hp natural gas-fired reciprocating compressor units (Quakertown Compressor Station); (3) an approximately 0.3-mile-long, 16-inch-diameter lateral extending from the Marcus Hook Compressor Station to an existing meter station owned by Delmarva Power and Light Company (Delmarva)[7] in New Castle County, Delaware (Parkway Lateral);8 (4) an approximately 4.4-mile-long, 16-inch-diameter lateral extending from the Marcus Hook Compressor Station to interconnections with Transcontinental Gas Pipe Line Company (Transco) and the PECO Energy Company (PECO)9 in Delaware County, Pennsylvania (Tilghman Lateral);10 (5) five meter stations; and (6) other appurtenant facilities.11

4. Adelphia proposes to operate the project in three zones: Zone North A, Zone North B, and Zone South.[12]

5. Adelphia held an open season between November 2, 2017, and December 8, 2017, for the proposed firm transportation services offered by the project. Lower Mount Bethel Energy, LLC, and Martins Creek, LLC (collectively, Existing Shippers), have executed binding precedent agreements for firm transportation service totaling 175, 000 dekatherms per day (Dth/day) (70% of the capacity) on the Zone North A system and 350, 000 Dth/day (100% of the capacity) on the Zone North B system.13 For the Zone South system, Adelphia has executed binding precedent agreements with two shippers for a total of 122, 500 Dth/day of firm transportation service (49% of the zone's capacity).14Adelphia states that 22, 500 Dth/day will be transported to the interconnect with PECO at the terminus of the Tilghman Lateral and 100, 000 Dth/day will be transported to interconnections with existing interstate pipelines for further transportation on the interstate grid. Adelphia also asserts that it is engaged in discussions with various other shippers that submitted bids during the open season.15

6. In the Certificate Order, the Commission agreed with the conclusions presented in the Environmental Assessment (EA) and adopted the EA's recommended mitigation measures, as modified in the order.16 The Certificate Order determined that the Adelphia Gateway Project, if constructed and operated as described in the EA, will not have a significant environmental impact and is required by the public convenience and necessity.17

II. Procedural Matters

A. Deficient Requests for Rehearing

7. Sheila and Daniel McCarthy's request for rehearing is deficient because it fails to include a Statement of Issues section separate from its arguments, as required by Rule 713 of the Commission's Rules of Practice and Procedure. Rule 713 states that requests for rehearing must "[s]tate concisely the alleged error in the final decision" and "include a separate section entitled 'Statement of Issues,' listing each issue in a separately enumerated paragraph" that includes precedent relied upon.18 Any issue not so listed will be deemed waived.19 Accordingly, we dismiss Sheila and Daniel McCarthy's rehearing request.[20] However, the rehearing request raises several of the same issues raised by Delaware Riverkeeper and West Rockhill Township, which are addressed below.

B.

Motion for Stay

8. Delaware Riverkeeper and West Rockhill Township request that the Commission stay the Certificate Order.[21] Specifically, Delaware Riverkeeper requests that the Commission stay the Certificate Order pending issuance of an order on rehearing. West Rockhill Township provides no discussion, support, or reasons for granting the requested stay. On January 28, 2020, Adelphia filed an answer to Delaware Riverkeeper's and West Rockhill Township's requests for stay. This order addresses and denies Delaware Riverkeeper's and West Rockhill Township's requests for rehearing; accordingly, we dismiss Delaware Riverkeeper's request for stay as moot and deny West Rockhill Township's request for stay.

C.

Answers

9. On February 4, 2020, Adelphia filed a motion for leave to answer and answer to the requests for rehearing filed by West Rockhill Township and by Sheila and Daniel McCarthy. On February 6, 2020, Adelphia filed a motion for leave to answer and answer to the request for rehearing filed by Delaware Riverkeeper. Rule 713(d)(1) of the Commission's Rules of Practice and Procedure22 prohibits answers to a request for rehearing. Accordingly, we reject Adelphia's filings.

III. Discussion

A. Natural Gas Act

10. Delaware Riverkeeper argues that the Commission violated the NGA by failing to establish that the Adelphia Gateway Project is required by present or future public convenience and necessity.23 Specifically, Delaware Riverkeeper asserts that the Commission: (1) improperly relied on precedent agreements;24 (2) failed to find sufficient need for the project in order to prevent overbuilding;25 (3) did not balance benefits of the project against adverse impacts on existing pipelines and their customers;26 and (4) did not balance the benefits of the project against adverse impacts on landowners and the environment.[27]

1. Precedent Agreements

11. Delaware Riverkeeper asserts that the Commission should not rely solely on precedent agreements to demonstrate project need.28 Delaware Riverkeeper disagrees with the Commission's policy not to "look behind contracts to determine whether the customer commitments represent genuine growth in market demand" or need.29

12. We affirm the Commission's finding in the Certificate Order that precedent agreements are significant evidence of demand for a project.[30] As the court stated in Minisink Residents for Environmental Preservation & Safety v. FERC, and again in Myersville Citizens for a Rural Community, Inc. v. FERC, nothing in the Certificate Policy Statement or in any precedent construing it suggests that the policy statement requires, rather than permits, the Commission to assess a project's benefits by looking beyond the market need reflected by the applicant's precedent agreements with shippers.[31] As noted above, Adelphia has binding precedent agreements for approximately 76% of the firm transportation capacity of the Adelphia Gateway Project.32 Thus, there is sufficient evidence in the record to support our finding that the service to be provided by the pipeline is needed.33

13. Nevertheless, Delaware Riverkeeper argues that the Commission should look beyond the need for transportation of natural gas in interstate commerce evidenced by the precedent agreements in this proceeding and make a judgement based on how the gas will be used after it is delivered at the end of the pipeline and the interstate transportation is completed.34 However, under current Commission policy, if there are precedent or service agreements, the Commission does not, and need not, make judgments about the needs of individual shippers35 or the ultimate end use of the commodity, and we see no justification to make an exception to that policy here.

14. We also disagree with Delaware Riverkeeper's assertion that the Commission must examine whether there is an affiliate relationship between Adelphia and its shippers. As the Certificate Order stated, when considering applications for new certificates, the Commission's primary concern regarding affiliates of the pipeline as shippers is whether there may have been undue discrimination against a non-affiliate shipper.36 Here, Delaware Riverkeeper made no allegation that Adelphia has discriminated against a non-affiliate shipper; nor did Delaware Riverkeeper present evidence that such contracts were manufactured to inflate market demand.[37]

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