In re E. Shore Nat. Gas Co.

Decision Date15 December 2022
Docket NumberCP22-40-000
Citation181 FERC ¶ 61, 233
PartiesEastern Shore Natural Gas Company
CourtFederal Energy Regulatory Commission

181 FERC ¶ 61,233

Eastern Shore Natural Gas Company

No. CP22-40-000

United States of America, Federal Energy Regulatory Commission

December 15, 2022

Before Commissioners: Richard Glick, Chairman; James P. Danly, Allison Clements, Mark C. Christie, and Willie L. Phillips.


1. On January 18, 2022, Eastern Shore Natural Gas Company (Eastern Shore) filed a prior notice request, pursuant to section 7 of the Natural Gas Act (NGA)[1] and sections 157.203(c), 157.205(b), 157.208(c), and 157.210 of the Commission's Part 157 blanket certificate regulations,[2] to construct and operate a new natural gas-fired compressor unit and ancillary facilities at its existing Bridgeville Compressor Station in Sussex County, Delaware (Southern Expansion Project).

2. Food and Water Watch (FWW) filed a timely protest to Eastern Shore's request. Eastern Shore filed an answer and motion to waive the reconciliation period provided for in section 157.205(f) of the Commission's regulations.[3] The request for waiver of the reconciliation period was not granted, and the protest was not withdrawn during the reconciliation period. Accordingly, Eastern Shore's filing has been reviewed as a case-specific certificate application under section 7 of the NGA. For the reasons discussed below, we deny FWW's protest and authorize Eastern Shore to construct and operate the proposed facilities under its Part 157 blanket certificate.


II. Background and Proposal

3. Eastern Shore, a limited liability company organized and existing under the laws of Delaware, is a natural gas company, as defined by section 2(6) of the NGA,[4] engaged in the transportation and storage of natural gas in interstate commerce. Eastern Shore is a wholly-owned subsidiary of Chesapeake Utilities Corporation (Chesapeake Utilities) and operates an interstate pipeline system located in Delaware, Maryland, and Pennsylvania. In 1997, the Commission granted Eastern Shore's request for a Part 157, Subpart F blanket construction certificate to conduct routine activities in conjunction with its operation of its interstate pipeline facilities. [5]

4. Eastern Shore proposes to construct a new, 1,875-horsepower natural gas-fired compressor unit at the existing Bridgeville Compressor Station,[6] as well as ancillary facilities, including: an exhaust silencer; air intake and start gas silencers; air-cooled heat exchangers for discharge gas, and engine jacket and auxiliary water; and associated piping. Eastern Shore states that the proposed project will enable it to provide up to 7,300 dekatherms per day (Dth/d) of additional firm natural gas transportation service. Chesapeake Utilities - Delaware Division (Chesapeake Delaware), a local distribution company and affiliate of Eastern Shore that is an existing shipper on Eastern Shore's pipeline system, has entered into a precedent agreement for all of the firm transportation service created by the project. Eastern Shore estimates the cost of the project to be $14,026,800.

III. Procedural Issues

A. Notice, Interventions, and Responsive Pleadings

5. Notice of Eastern Shore's prior notice request was published in the Federal Register on February 3, 2022, with interventions and protests due on March 29, 2022.[7] The Natural Gas Supply Association, Center for Liquified Natural Gas, and Easton Utilities Commission filed timely, unopposed motions to intervene.[8] FWW filed a timely motion to


intervene and protest. Pursuant to section 157.205(h) of the Commission's regulations, authorization to construct and operate qualifying facilities under a blanket certificate is automatic so long as no protests are filed within 60 days of the date the notice is issued by the Commission.[9] If a protest is timely filed and is not withdrawn within 30 days after the 60-day notice period,[10] the prior notice request proceeds as an application for case-specific authorization under section 7 of the NGA.[11]

6. FWW's protest questions the adequacy of the Commission's review under the National Environmental Policy Act (NEPA) with regard to greenhouse gas (GHG) emissions and connected actions. Additionally, on June 1, 2022, FWW filed comments questioning the need for the project because of Eastern Shore's affiliate relationship with the project shipper. The protest and comments are addressed below.

B. Opposed Intervention

7. On April 4, 2022, Eastern Shore filed an answer opposing FWW's motion to intervene, arguing that FWW's motion to intervene fails to allege an interest specific to the project that may be directly affected by the outcome of the proceeding and noting that FWW fails to identify a member who would be directly impacted by the project or explain how they would be impacted.[12]

8. Pursuant to Rule 214, if an answer in opposition to a motion to intervene is filed, the movant becomes a party only when the motion is expressly granted.[13] A motion to intervene must state the movant's interest in sufficient factual detail to demonstrate that the movant has or represents an interest that may be directly affected by the outcome of the proceeding or that the movant's participation is in the public interest.[14] In its motion to intervene, FWW states that it is an environmental advocacy organization that


represents more than 8,500 members and supporters in Delaware, including those who would be directly and adversely impacted by the project.[15] We find that FWW has shown a sufficient direct interest and grant its motion to intervene.[16]

C. Motion to Dismiss Protest or Waive Reconciliation Period

9. In its April 4, 2022 answer, Eastern Shore also requests that the Commission dismiss the protest by FWW or, in the alternative, waive the reconciliation period.[17]Specifically, Eastern Shore requests that the Director of the Commission's Office of Energy Projects dismiss FWW's protest within 10 days of its filing for failure to raise a substantive issue and provide any specific detailed reason or rationale for the objection.[18]Because FWW's protest was not dismissed and the reconciliation period has run, the requests are moot.

IV. Discussion

10. As the holder of a blanket construction certificate, Eastern Shore is authorized to undertake routine activities, subject to certain reporting, notice, and protest requirements.[19] The blanket certificate rules set out a class of routine and well-understood activities that the Commission has determined to be in the public convenience and necessity under section 7(c) of the NGA. Through cost limitations and other conditions, the blanket regulations limit the activities authorized under a blanket certificate such that the scrutiny involved in considering applications for case-specific certificate authorization is not necessary to ensure compatibility with the public convenience and necessity. The blanket certificate program is intended to increase flexibility and reduce regulatory and


administrative burdens.[20] The prior notice procedures apply to activities that are not minor enough to qualify for automatic authorization under the Commission's blanket certificate regulations but that are still expected to have relatively minimal impact on the environment, ratepayers, and pipeline operations.[21]

11. The blanket certificate regulations require that prior notice always be given for certain types of blanket certificate projects,[22] while prior notice of other types of blanket certificate projects is only required in the event that the project exceeds section 157.208's automatic authorization cost limits.[23] Prior notice is required in recognition that covered projects may raise issues of concern for a pipeline company's existing shippers regarding possible effects on their services or may present environmental concerns to individual landowners or others, notwithstanding that the pipeline companies must satisfy all of the blanket certificate regulations' standard conditions.[24] Any person may file a protest to object to any request filed under the prior notice provisions. If the protest is not withdrawn or dismissed, the activity will not be deemed authorized by the blanket certificate and the Commission will treat the request as an application for case-specific section 7 authorization.

12. Commission staff prepares an environmental assessment (EA) for each prior notice project[25] to determine whether a pipeline company has satisfied all of section 157.206(b)'s standard environmental conditions and whether the standard conditions are appropriate to address potential adverse environmental impacts from the project. In protested prior notice proceedings, such as this one, the Commission order addresses any specific


environmental concerns or issues raised in order to assess whether additional environmental conditions are needed.[26]

A. Project Need

13. FWW contends that the request requires heightened scrutiny of project need because the project shipper, Chesapeake Delaware, is an affiliate of Eastern Shore.[27]According to FWW, the Commission cannot simply take Eastern Shore's or its affiliate's word that the project is needed but must assess for self-dealing. FWW claims that there is possible self-dealing because the project could facilitate the development and delivery of renewable natural gas from area farms, in which Chesapeake Utilities allegedly has an interest.

14. We are not persuaded by FWW that the project is not needed.[28] Eastern Shore is the only interstate pipeline that serves Chesapeake Delaware, as there are no other


interstate pipelines in the immediate area of its distribution system, and has been providing Chesapeake Delaware service for over 50 years.[29] Additionally, Eastern Shore provides service to both affiliate and non-affiliate shippers, and no shippers have objected to the project. This proposed project was designed specifically to provide Chesapeake...

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