[Federal Register Volume 86, Number 149 (Friday, August 6, 2021)]
[Rules and Regulations]
[Pages 43077-43087]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-16812]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 153 and 157

[Docket No. RM20-15-002; Order No. 871-C]


Limiting Authorizations to Proceed With Construction Activities 
Pending Rehearing

AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Order addressing arguments raised on rehearing and 
clarification.

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SUMMARY: The Federal Energy Regulatory Commission addresses requests 
for rehearing and clarification of Order No. 871-B.

DATES: The effective date of the document published on May 13, 2021 (86 
FR 26,150), is confirmed: June 14, 2021.

FOR FURTHER INFORMATION CONTACT: Tara DiJohn, Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street NE, 
Washington, DC 20426, (202) 502-8671, [email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

[[Page 43078]]



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                                                          Paragraph  No.
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I. Background...........................................               3
II. Discussion..........................................              10
    A. Rule Limiting Construction Authorizations Pending              11
     Rehearing..........................................
        1. Opposition to Project Need...................              11
        2. Amendment Orders Authorizing Mid-Construction              14
         Changes........................................
        3. Post-Allegheny Rehearing Treatment...........              18
        4. Additional Clarifications to Regulation Text.              24
        5. Effective Date of Construction Authorization               28
         Issuances......................................
        6. Procedural Nature of Rule....................              30
    B. Policy of Presumptively Staying Section 7(c)                   33
     Certificate Orders.................................
        1. Policy Does Not Violate NGA or APA...........              34
        2. Qualifying Landowner Rehearing Requests......              40
        3. Commitment to Refrain from Exercise of                     42
         Eminent Domain.................................
        4. Claims of Burden Shifting....................              44
        5. Consideration of Industry Concerns...........              47
        6. Landowner Ability to Seek Judicial Stay......              49
    C. Commission Determination.........................              51
III. Document Availability..............................              52
IV. Dates...............................................              55
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    1. On May 4, 2021, the Federal Energy Regulatory Commission 
(Commission) issued an order addressing arguments raised on rehearing 
and clarification, and setting aside, in part, its prior Order No. 
871.\1\ Order No. 871-B revised the rule previously adopted by the 
Commission in Order No. 871 \2\ to narrow the scope of its application 
and to incorporate a time limitation for the Commission to preclude 
issuances of authorizations to proceed with construction activities. 
Order No. 871-B also announced a new general policy of presumptively 
staying certificate orders issued pursuant to section 7(c) of the 
Natural Gas Act (NGA) \3\ during the 30-day rehearing period and 
pending Commission resolution of any timely requests for rehearing 
filed by landowners. On June 3, 2021, the Interstate Natural Gas 
Association of America (INGAA), the Enbridge Gas Pipelines 
(Enbridge),\4\ and Mountain Valley Pipeline, LLC (Mountain Valley) 
requested clarification and rehearing of Order No. 871-B.
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    \1\ Limiting Authorizations to Proceed with Construction 
Activities Pending Rehearing, Order No. 871-B, 86 FR 26150 (May 13, 
2021), 175 FERC ] 61,098 (2021).
    \2\ The Commission issued its June 9, 2020 Order No. 871 to 
preclude the issuance of authorizations to proceed with construction 
activities with respect to orders granting authorizations under 
sections 3 and 7 of the Natural Gas Act (NGA) until the Commission 
acts on the merits of any timely-filed request for rehearing or 
until the deadline for filing a timely request for rehearing has 
passed with no such request being filed. Limiting Authorizations to 
Proceed with Construction Activities Pending Rehearing, Order No. 
871, 85 FR 40113 (Jul. 06, 2020), 171 FERC ] 61,201 (2020).
    \3\ 15 U.S.C. 717f(c).
    \4\ The Enbridge Gas Pipelines include Algonquin Gas 
Transmission, LLC; Big Sandy Pipeline, LLC; Bobcat Gas Storage; East 
Tennessee Natural Gas, LLC; Garden Banks Gas Pipeline, LLC, Market 
Hub Partners Holding, LLC; Mississippi Canyon Gas Pipeline, LLC; 
Saltville Gas Storage Company L.L.C.; and Texas Eastern 
Transmission, LP. The Enbridge Gas Pipelines also include natural 
gas companies in which affiliates of the Enbridge Gas Pipelines own 
a joint venture interest, including Alliance Pipeline L.P., 
Gulfstream Natural Gas System, L.L.C.; Maritimes & Northeast 
Pipeline, L.L.C.; Nautilus Pipeline Company, L.L.C., NEXUS Gas 
Transmission, LLC; Sabal Trail Transmission, LLC; Southeast Supply 
Header, LLC; and Steckman Ridge, LP.
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    2. Pursuant to Allegheny Defense Project v. FERC,\5\ the rehearing 
requests filed in this proceeding may be deemed denied by operation of 
law. However, as permitted by section 19(a) of the NGA,\6\ we are 
modifying the discussion in Order No. 871-B and continue to reach the 
same result in this proceeding, as discussed below.\7\
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    \5\ 964 F.3d 1 (D.C. Cir. 2020) (en banc) (Allegheny).
    \6\ 15 U.S.C. 717r(a) (``Until the record in a proceeding shall 
have been filed in a court of appeals, as provided in subsection 
(b), the Commission may at any time, upon reasonable notice and in 
such manner as it shall deem proper, modify or set aside, in whole 
or in part, any finding or order made or issued by it under the 
provisions of this chapter.'').
    \7\ Allegheny, 964 F.3d at 16-17. The Commission is not changing 
the outcome of Order No. 871-B. See Smith Lake Improvement & 
Stakeholders Ass'n v. FERC, 809 F.3d 55, 56-57 (D.C. Cir. 2015).
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I. Background

    3. In Order No. 871, the Commission explained that historically, 
due to the complex nature of the matters raised on rehearing of orders 
granting authorizations under NGA sections 3 and 7, the Commission had 
often issued an order (known as a tolling order) by the thirtieth day 
following the filing of a rehearing request, allowing itself additional 
time to provide thoughtful, well-considered attention to the issues 
raised on rehearing.
    4. In order to balance its commitment to expeditiously responding 
to parties' concerns in comprehensive orders on rehearing and the 
serious concerns posed by the possibility of construction proceeding 
prior to the completion of agency review, the Commission, in Order No. 
871, exercised its discretion by amending its regulations to add new 
Sec.  157.23, which precludes the issuance of authorizations to proceed 
with construction of projects authorized under NGA sections 3 and 7 
during the period for filing requests for rehearing of the initial 
orders or while rehearing is pending.\8\
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    \8\ Order No. 871 also revised Sec.  153.4 (general requirements 
for NGA section 3 applications) of the Commission's regulations to 
incorporate a cross-reference to Sec.  157.23.
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    5. Three weeks after the Commission issued Order No. 871, the U.S. 
Court of Appeals for the District of Columbia Circuit (D.C. Circuit) 
issued an en banc decision in Allegheny.\9\ The court held that the 
Commission's use of tolling orders solely to allow itself additional 
time to consider an application for rehearing does not preclude 
operation of the NGA's deemed denial provision,\10\ which enables a 
rehearing applicant to seek judicial review after thirty days of agency 
inaction.\11\ The court explained that, to prevent an application for 
rehearing from being deemed denied, the Commission must act on an 
application for rehearing within thirty days of its filing by taking 
one of the four NGA-enumerated actions: grant rehearing, deny 
rehearing, or abrogate or modify its order without further hearing.\12\
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    \9\ 964 F.3d 1.
    \10\ 15 U.S.C. 717r(a).
    \11\ Allegheny, 964 F.3d at 18-19.
    \12\ See id. at 13 (quoting 15 U.S.C. 717r(a)).
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    6. Shortly thereafter, on July 9, 2020, the Commission received 
three timely

[[Page 43079]]

requests for clarification and rehearing of Order No. 871. To 
facilitate reconsideration of Order No. 871 and ensure a complete 
record for further action, the Commission in Order No. 871-A 
subsequently provided interested parties an opportunity to comment on 
the arguments raised on rehearing and specific questions posed by the 
Commission.\13\ In response, the Commission received twelve initial 
briefs and five reply briefs from a variety of stakeholders, including 
states, landowners, natural gas companies, and a consortium of public 
interest organizations.\14\
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    \13\ Limiting Authorizations to Proceed with Construction 
Activities Pending Rehearing, Order No. 871-A, 86 FR 7643 (Feb. 1, 
2021), 174 FERC ] 61,050 (2021).
    \14\ See Order No. 871-B, 175 FERC ] 61,098 at PP 8-9 
(describing briefs received).
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    7. In consideration of the arguments raised on rehearing and in the 
briefs, the Commission in Order No. 871-B revised Sec.  157.23 of its 
regulations to provide that the rule prohibiting the issuance of 
construction authorizations pending rehearing will apply only when a 
request for rehearing raises issues reflecting opposition to project 
construction, operation, or need.\15\ Order No. 871-B further revised 
the rule to provide that the rule's restriction on issuing construction 
authorizations while a qualifying rehearing request remains pending 
will expire 90 days following the date that such request may be deemed 
denied by operation of law under NGA section 19(a).\16\
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    \15\ Order No. 871-B, 175 FERC ] 61,098 at PP 14, 30.
    \16\ Id. PP 26, 30.
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    8. In addition, the Commission in Order No. 871-B announced its 
intent to stay its NGA section 7(c) certificate orders during the 30-
day rehearing period and pending Commission resolution of any timely 
requests for rehearing filed by landowners.\17\ We explained that this 
policy will be applied on a particularized basis, subject to certain 
exceptions and, if imposed, any stay would be lifted no later than 90 
days following the date that a qualifying request for rehearing may be 
deemed denied by operation of law.\18\
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    \17\ Id. PP 43-51.
    \18\ See id. PP 46, 51.
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    9. On June 3, 2021, INGAA and Enbridge filed requests for 
clarification and rehearing of Order No. 871-B.\19\ On the same day, 
Mountain Valley filed a request for clarification, or, in the 
alternative, rehearing.\20\
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    \19\ INGAA's June 3, 2021 Request for Clarification and 
Rehearing (INGAA Rehearing); Enbridge's June 3, 2021 Request for 
Clarification and Rehearing (Enbridge Rehearing).
    \20\ Mountain Valley's June 3, 2021 Request for Clarification 
or, in the Alternative, Rehearing (Mountain Valley Rehearing).
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II. Discussion

    10. INGAA's and Enbridge's petitions include several requests for 
clarification, or, in the alternative, rehearing of the rule, as 
revised in Order No. 871-B, and of the Commission's announcement that 
it would prospectively stay certain section 7(c) certificate orders 
pending rehearing. Mountain Valley's petition is focused on a single 
issue regarding the rule's application: whether the rule would apply if 
rehearing is sought of an amendment order approving a minor mid-
construction change that would typically be submitted as a variance 
request. Below, we first respond to the various requests for 
clarification or rehearing of the revised rule and then to requests for 
clarification or rehearing of the Commission's policy of staying 
section 7(c) certificate orders pending rehearing.

A. Rule Limiting Construction Authorizations Pending Rehearing

1. Opposition to Project Need
    11. In Order No. 871-B, the Commission revised Sec.  157.23(b) of 
its regulations as follows:

    With respect to orders issued pursuant to 15 U.S.C. 717b or 15 
U.S.C. 717f(c) authorizing the construction of new natural gas 
transportation, export, or import facilities, no authorization to 
proceed with construction activities will be issued:
    (a) until the time for the filing of a request for rehearing 
under 15 U.S.C. 717r(a) has expired with no such request being 
filed, or
    (b) if a timely request for rehearing raising issues reflecting 
opposition to project construction, operation, or need is filed, 
until: (i) The request is no longer pending before the Commission, 
(ii) the record of the proceeding is filed with the court of 
appeals, or (iii) 90 days has passed after the date that the request 
for rehearing may be deemed to have been denied under 15 U.S.C. 
717r(a).\21\
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    \21\ Order No. 871-B, 175 FERC ] 61,098 at P 30 (emphasis in the 
original reflecting adopted revisions to Sec.  157.23).

    12. INGAA and Enbridge request that the Commission clarify the 
meaning of ``opposition to project . . . need.'' Specifically, INGAA 
and Enbridge urge the Commission to clarify that this phrase refers 
only to situations in which a project opponent claims that there is 
insufficient evidence of market need for a project under the NGA 
section 7 economic balancing test.\22\ INGAA maintains that ``virtually 
any generic opposition to a project'' could be viewed as an argument 
that the new facilities are not ``needed,'' and that if not clarified, 
this phrasing could prohibit the issuance of construction authorization 
whenever any rehearing request is filed by a party generally opposed to 
development.\23\ Similarly, Enbridge posits that parties could delay 
construction for months by claiming on rehearing that a project is not 
needed because of ``broad climate change concerns.'' \24\
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    \22\ See INGAA Rehearing at 9; Enbridge Rehearing at 13-14.
    \23\ INGAA Rehearing at 10, 11.
    \24\ Enbridge Rehearing at 13.
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    13. We deny INGAA's and Enbridge's requests for clarification on 
this issue. The petitioners' interpretation construes the language of 
the rule too narrowly. Adopting this suggestion ``would exclude from 
the rule's purview rehearing requests raising environmental matters or 
general opposition to a project, as well as rehearing requests filed by 
members of communities that would be impacted by the construction of 
new natural gas facilities.'' \25\ The Commission has already stated 
that we did not intend such a result.\26\ We continue to find it 
appropriate ``to refrain from permitting construction to proceed until 
the Commission has acted upon any request for rehearing that opposes 
project construction and operation or raises issues regarding project 
need, regardless of the basis or whether rehearing is sought by an 
affected landowner.'' \27\
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    \25\ Order No. 871-B, 175 FERC ] 61,098 at P 15.
    \26\ Id.
    \27\ Id. (emphasis added).
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2. Amendment Orders Authorizing Mid-Construction Changes
    14. INGAA and Mountain Valley seek clarification that the rule does 
not apply to amendment orders that authorize limited changes while 
project construction is ongoing, which the they refer to as ``mid-
construction changes,'' or, in the alternative, rehearing.\28\ INGAA 
explains that mid-construction changes--such as construction method 
changes, temporary workspaces changes, and minor route realignments 
that do not involve new facilities or new landowners--are traditionally 
filed by project developers as variance requests.\29\ However, INGAA 
notes that

[[Page 43080]]

the Commission can convert mid-construction changes submitted as a 
variance request into certificate amendment proceedings. In addition, a 
project developer may on its own accord decide to seek approval of 
certain mid-construction changes by filing an amendment application 
rather than a variance request.\30\ INGAA and Mountain Valley seek 
assurance that the rule would not apply to amendment orders authorizing 
mid-construction changes that would traditionally be approved through 
the variance process. To support this request, INGAA and Mountain 
Valley point to the language of Sec.  157.23's introductory text, which 
references orders authorizing ``the construction of new natural gas 
transportation, export, or import facilities,'' and explain that the 
type of mid-construction amendment proceedings for which it seeks 
clarification do not involve new facilities.\31\
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    \28\ See INGAA Rehearing at 11-20; Mountain Valley Rehearing at 
5-9.
    \29\ See INGAA Rehearing at 13-15 (providing examples of prior 
variance approvals allowing: temporary modification to location of 
temporary access road to accommodate imminent longwall mining 
activities in vicinity of construction area, a minor pipeline route 
shift to avoid an obstruction placed on approved pipeline route, 
modifications to pipeline route and road crossing method due to 
unanticipated subsurface conditions).
    \30\ See, e.g., Mountain Valley Rehearing at 5 (describing its 
amendment application submitted in Docket No. CP21-57-000 requesting 
Commission authorization to change the crossing method for specific 
wetlands and waterbodies to be crossed by the Mountain Valley 
Pipeline Project from open-cut crossings to one of several 
trenchless methods). Nothing in this order prejudges action on the 
amendment application.
    \31\ INGAA Rehearing at 15-16 (noting that the term 
``facilities'' refers to the physical plant approved by the 
Commission in the original certificate order); Mountain Valley 
Rehearing at 5.
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    15. If the Commission declines to grant clarification, INGAA and 
Mountain Valley request rehearing of this issue. If the Commission 
agrees that the rule does not apply to orders authorizing limited mid-
construction changes, INGAA further asks the Commission to clarify that 
it retains discretion to issue an authorization to proceed with 
construction during the 30-day rehearing period following such an 
order.\32\
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    \32\ INGAA Rehearing at 18-20.
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    16. In Order No. 871-B, we explained that the rule limiting 
construction authorizations would not apply to a request for rehearing 
of an non-initial order that merely implements the terms, conditions, 
or provisions of an initial authorizing order, ``such as a delegated 
order issuing a notice to proceed with construction, approving a 
variance request, or allowing the applicant to place the project, or a 
portion thereof, in service.'' \33\ With respect to amendment orders, 
the Commission stated that the rule would apply only to the facilities 
approved by the amendment order for which rehearing is sought: it would 
not relate back to any facilities previously approved by the Commission 
in the initial authorizing order that remain unchanged by the amendment 
order.\34\
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    \33\ Order No. 871-B, 175 FERC ] 61,098 at P 17.
    \34\ Id. P 18.
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    17. The Commission has already provided substantial guidance in 
response to INGAA's previous requests for clarification regarding the 
rule's application to non-initial and amendment orders. The scenario 
now posed by INGAA and Mountain Valley on rehearing of Order No. 871-B 
is a slightly different factual scenario. But the Commission is not 
required to identify and address every conceivable permutation of facts 
under which questions about the rule's application may arise.\35\ 
Therefore, it is premature to address the possible range of future mid-
construction changes. As a general matter, we think it likely that the 
rule would not apply if rehearing is sought of an amendment order 
approving a mid-construction change that is generally consistent with 
the terms and conditions of the original authorization order and does 
not involve new facilities or new landowners. However, we will consider 
the circumstances of each request on a case-by-case basis, and will 
indicate in the Commission's order in each case whether the rule 
applies.
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    \35\ See, e.g., Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State 
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 51 (1983) (``It is true that 
a rulemaking `cannot be found wanting simply because the agency 
failed to include every alternative device and thought conceivable 
by the mind of man . . . regardless of how uncommon or unknown that 
alternative may have been[.]'') (quoting Vt. Yankee Nuclear Power 
Corp. v. Nat. Res. Def. Council, Inc., 435 U.S. 519, 551 (1978)).
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3. Post-Allegheny Rehearing Treatment
    18. Enbridge contends that the Commission erred by determining that 
an order granting rehearing for further proceedings would vacate the 
certificate authorization,\36\ arguing that the Commission cannot 
revoke certificate authority merely by issuing an interlocutory order 
granting rehearing or establishing a hearing, briefing schedule, 
investigation or other similar proceeding, but rather, must make a 
specific finding on the issues with the requisite support.\37\ 
According to Enbridge, an interlocutory order revoking a certificate 
would improperly place the certificate holder in ``legal limbo'' as an 
aggrieved party unable to seek rehearing and appeal of the 
interlocutory action.\38\ Enbridge urges the Commission to establish a 
specific timeframe for issuance of a substantive order following a 
grant of rehearing subject to further proceedings or to set a deadline 
after which a construction authorization may issue.\39\
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    \36\ Enbridge Rehearing at 9-10.
    \37\ Id. at 9.
    \38\ Id. at 10.
    \39\ Id. at 10-11.
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    19. INGAA takes a different tack, suggesting that the Commission 
adopt a case-by-case approach to determining whether an initial order 
will be vacated when rehearing is granted.\40\ Specifically, INGAA asks 
the Commission to clarify that it did not adopt a blanket rule that a 
grant of rehearing for further procedures means the entire underlying 
order is vacated,\41\ that it will instead employ a case-by-case 
approach for determining whether grant of rehearing would result in 
vacatur,\42\ and that the entire certificate authorization will not be 
vacated if the Commission seeks additional briefing or information on 
one or more targeted issues.\43\
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    \40\ INGAA Rehearing at 20-23.
    \41\ See id. at 20-22.
    \42\ Id. at 22.
    \43\ Id.
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    20. Both INGAA and Enbridge note that the Commission's prior 
practice of issuing tolling orders did not result in vacatur of 
underlying order.\44\ Thus, despite changing its procedures for 
handling requests for rehearing following Allegheny, INGAA and Enbridge 
argue that the Commission has departed from longstanding practice and 
failed to acknowledge such departure.\45\
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    \44\ See INGAA Rehearing at 23; Enbridge Rehearing at 10.
    \45\ See INGAA Rehearing at 23 (citing FCC v. Fox Television 
Stations, Inc., 556 U.S. 502, 515 (2009) (agencies must ``provide 
reasoned explanation'' and show good reasons for a change in 
position, but ``need not demonstrate to a court's satisfaction that 
the reasons for the new policy are better than the reasons for the 
old one'') (emphasis in the original)); Enbridge Rehearing at 10 
(same).
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    21. In response to INGAA's request, Order No. 871-B posited four 
post-Allegheny scenarios that could arise following the filing of a 
request for rehearing to explain when such a request would remain 
pending before the Commission and, thus, preclude the issuance of a 
construction authorization.\46\ The fourth scenario addressed a 
situation contemplated by the Allegheny court, where the Commission 
could ``grant rehearing for the express purpose of revisiting and 
substantively reconsidering a prior decision,'' where it ``needed 
additional time to allow for supplemental briefing or further hearing 
processes.'' \47\ In Order No. 871-B, the Commission stated that 
``[u]nder those circumstances, i.e., where the Commission grants 
rehearing without issuing a final order, the original

[[Page 43081]]

authorization would no longer be in effect and the provisions of Order 
No. 871 would no longer apply since there would be no final order 
pursuant to which a notice to proceed could be issued.'' \48\
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    \46\ See Order No. 871-B, 175 FERC ] 61,098 at PP 19-29.
    \47\ Id. P 27 (citing 964 F.3d at 16).
    \48\ Id.
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    22. As an initial matter, Enbridge and INGAA err to the extent that 
they suggest the Commission determined that original authorization 
orders necessarily would be vacated or revoked by an interlocutory 
order granting rehearing for further procedures, as described by the 
Allegheny court. We merely stated, in response to a prior request for 
clarification from INGAA, that under the specified circumstances 
contemplated by the Allegheny court, the provisions of Order No. 871 
``would no longer apply since there would be no final order pursuant to 
which a notice to proceed could be issued.'' \49\ We agree with INGAA 
that a case-by-case approach is necessary for the Commission to 
determine the effect that a grant of rehearing for further procedures 
would have on the underlying authorization. In the order granting 
rehearing for further procedures, we will indicate the order's effect 
on the underlying authorization.
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    \49\ Id.
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    23. The Commission previously declined a request to establish a 
deadline for issuing a final merits order following a grant of 
rehearing for further procedures.\50\ As we stated at the time, 
timelines associated with supplemental briefing or evidentiary 
submissions may vary based on the complexity of the issues warranting 
further procedures.\51\ Thus, we continue to find that a case-by-case 
approach is warranted in the event that the Commission grants rehearing 
because it ``need[s] additional time to allow for supplemental briefing 
or further hearing processes.'' \52\
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    \50\ Id. P 28.
    \51\ Id.
    \52\ Allegheny, 964 F.3d at 16.
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4. Additional Clarifications to Regulation Text
    24. INGAA argues that Sec.  157.23(b) should be revised to add the 
phrase ``the earliest of the time at which,'' as italicized below:

If a timely request for rehearing raising issues reflecting 
opposition to project construction, operation, or need is filed, 
until the earliest of the time at which: (1) The request is no 
longer pending before the Commission, (2) the record of the 
proceeding is filed with the court of appeals, or (3) 90 days has 
passed after the date that the request for rehearing may be deemed 
to have been denied under 15 U.S.C. 717r(a).\53\
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    \53\ INGAA Rehearing at 24.

    INGAA contends that this addition would clarify and better reflect 
what it understands to be the Commission's intent, as reflected by the 
Commission's use of the conjunction ``or'' and references throughout 
Order No. 871-B that suggest that the restriction on issuance of 
construction authorizations will apply until the earliest of the three 
``triggering events'' contemplated by the rule.\54\ If the suggested 
change is not adopted, INGAA fears that project opponents may argue 
that no authorization to proceed with construction should be issued 
until the occurrence of the later of the three ``triggering events'' 
comes to pass.\55\
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    \54\ Id. at 24-25.
    \55\ Id. at 25.
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    25. INGAA is correct in its interpretation that a construction 
authorization may be issued upon the earliest occurrence of the three 
triggering events enumerated in the regulation. However, we decline to 
further revise the regulatory language. As currently drafted, the rule 
uses the conjunction ``or'' which serves to distinguish the three 
scenarios as alternatives and signals that a construction authorization 
may issue once the earliest of the three events occurs.
    26. In addition, INGAA renews its request that the Commission 
revise Sec.  157.23 to expressly state that the rule may be waived for 
good cause shown.\56\ INGAA urges the Commission to consider cases 
finding in other contexts that agencies' authority to waive their own 
rules is not unlimited and that agencies are bound by, and courts must 
enforce, the unambiguous terms of regulations.\57\
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    \56\ Id. at 28-29.
    \57\ Id. at 28 (citing Reuters Ltd. v. FCC, 781 F.2d 946, 950 
(D.C. Cir. 1986) (finding that FCC failed to follow its rules and 
regulations in resolving dispute between competing applicants for 
microwave radio station licenses); Erie Boulevard Hydropower, LP v. 
FERC, 878 F.3d 258, 269 (D.C. Cir. 2017) (stating that ``an agency 
action fails to comply with its regulations, that action may be set 
aside as arbitrary and capricious'' and that ``[a]n agency decision 
that departs from agency precedent without explanation is similarly 
arbitrary and capricious.'') (citations omitted); Kisor v. Wilkie, 
139 S. Ct. 2400, 2415 (2019) (explaining that when there is ``only 
one reasonable construction of a regulation,'' Auer deference is not 
appropriate and a court must not defer to any other reading of the 
regulation); 5 U.S.C. 706(2)).
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    27. The Commission previously declined to adopt INGAA's suggestion 
to incorporate into the rule an explicit waiver provision, finding it 
retains authority to waive its own regulations.\58\ INGAA raises no new 
arguments that cause us to reconsider that decision.
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    \58\ Order No. 871-B, 175 FERC ] 61,098 at P 29.
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5. Effective Date of Construction Authorization Issuances
    28. Enbridge urges the Commission to clarify that its staff may 
issue authorizations to proceed with construction prior to the deadline 
established by the rule so long as the authorization does not become 
effective until the occurrence of the earliest of the three triggering 
events enumerated in the rule (i.e., the rehearing request is no longer 
pending before the Commission, the record of the proceeding is filed 
with the court of appeals, or 90 days after the date that the request 
may be deemed denied).\59\ Allowing project developers to obtain 
advance confirmation from Commission staff that all preconstruction 
conditions have been satisfied would, according to Enbridge, help 
project developers set and meet construction milestones, lessen the 
chance of additional regulatory delays, and would reflect the 
Commission's articulated goal of achieving an appropriate balance of 
interests.\60\
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    \59\ Enbridge Rehearing at 11-12.
    \60\ Id. at 12.
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    29. The Commission denies the requested clarification. We believe 
that, in practice, a conditional construction authorization of the 
nature Enbridge suggests has the potential to create uncertainty for 
project developers, stakeholders, and Commission staff alike as to the 
effective date of the authorization, which outweighs the purported 
benefits that Enbridge identifies. Moreover, the advance notice 
contemplated by Enbridge fails to account for a change in status of a 
project developer's compliance with the terms of its section 7 
certificate or section 3 authorization that could arise in the interim. 
We believe that a cleaner approach is for the Commission to issue 
authorizations to proceed with construction once all requisite 
conditions have been satisfied and the rule's prohibition on such 
issuance has elapsed.
6. Procedural Nature of Rule
    30. INGAA urges the Commission to reconsider its determination that 
Order No. 871-B is a procedural rule not subject to the Administrative 
Procedure Act's (APA) notice and comment procedures.\61\ Where a 
project developer has already fulfilled the necessary prerequisites for 
beginning construction, INGAA argues that the Commission failed to 
explain how it has ``unfettered discretion'' to refuse to allow 
construction of facilities it has already found required by the public

[[Page 43082]]

convenience and necessity.\62\ INGAA also characterizes as misleading 
the ``85-day'' figure--cited in Order No. 871-B to illustrate that over 
a five year period, on average, 85 days elapsed between issuance of an 
initial order and issuance of an authorization to proceed with 
construction--for it fails to account for project differences and 
assumes that developers rely on average figures when planning project 
construction and in-service deadlines.\63\ According to INGAA, the rule 
``dramatically changes'' the timeline for when a project can be placed 
in service and ``implicate[s] the investment-backed expectations of all 
project developers.'' \64\
---------------------------------------------------------------------------

    \61\ See INGAA Rehearing at 25-28.
    \62\ Id. at 26.
    \63\ See id. at 26-27; Order No. 871-B, 175 FERC ] 61,098 at P 
37.
    \64\ INGAA Rehearing at 27.
---------------------------------------------------------------------------

    31. The Commission previously responded to concerns that the rule 
adopted in Order No. 871 was not a procedural rule and thus should have 
been issued following the APA's notice and comment requirements.\65\ As 
we explained, the APA's notice and comment procedures were not required 
because the rule neither substantially ``alters the rights or 
interests'' of regulated natural gas companies nor changes the agency's 
substantive outcomes.\66\ We also explained that the timing of when to 
permit construction to begin is a matter entirely within the 
Commission's existing discretion and not a matter of right.\67\ INGAA's 
arguments on rehearing do not demonstrate an error in the Commission's 
analysis.\68\
---------------------------------------------------------------------------

    \65\ See Order No. 871-B, 175 FERC ] 61,098 at PP 35-39.
    \66\ Id. at P 35 (citing See Am. Hosp. Ass'n v. Bowen, 834 F.2d 
1037, 1047 (D.C. Cir. 1987)).
    \67\ Id. (explaining that nothing in the NGA or the Commission's 
regulations, other than the rule adopted in Order No. 871, addresses 
the timing of authorizations to commence construction or prevents 
the Commission from acting on rehearing prior to issuing an 
authorization to proceed with construction).
    \68\ See, e.g., Batterton v. Marshall, 648 F.2d 694, 707 (D.C. 
Cir. 1980) (``A useful articulation of the [rule of agency 
organization, procedure, or practice] exemption's critical feature 
is that it covers agency actions that do not themselves alter the 
rights or interests of parties, although it may alter the manner in 
which the parties present themselves or their viewpoints to the 
agency.'').
---------------------------------------------------------------------------

    32. Order No. 871 is premised on the Commission's desire to balance 
its commitment to expeditiously respond to parties' concerns in 
comprehensive orders on rehearing and the serious concerns posed by the 
possibility of construction proceeding prior to the completion of 
agency review.\69\ In Order No. 871-B, we cited the average 85-day span 
between an initial authorizing order and issuance of a construction 
authorization only to illustrate that in many cases construction cannot 
begin immediately upon issuance of an order authorizing new facilities 
under NGA sections 3 or 7.\70\
---------------------------------------------------------------------------

    \69\ Order No. 871, 171 FERC ] 61,201 at P 11.
    \70\ See Order No. 871-B, 175 FERC ] 61,098 at P 37.
---------------------------------------------------------------------------

B. Policy of Presumptively Staying Section 7(c) Certificate Orders

    33. In Order No. 871-B, the Commission announced a new policy of 
presumptively staying an NGA section 7(c) certificate order during the 
30-day period for seeking rehearing and pending Commission resolution 
of any timely requests for rehearing filed by a landowner, until the 
earlier of the date on which the Commission (1) issues a substantive 
order on rehearing or otherwise indicates that the Commission will not 
take further action, or (2) 90 days following the date that a request 
for rehearing may be deemed to have been denied under NGA section 
19(a). We explained that this policy will not apply where the pipeline 
developer has, at the time of the certificate order, already acquired 
all necessary property interests or where no landowner protested the 
section 7 application. In addition, we explained that the stay will 
automatically lift following the close of the 30-day period for seeking 
rehearing if no landowner files a timely request for rehearing of the 
certificate order. As we explained, this policy balances the competing 
interests at stake, including the project developer's interest in 
proceeding with construction when it has obtained all necessary 
permits, and a project opponent's interest in being able to challenge 
the Commission's ultimate decision in a timely manner.
1. Policy Does Not Violate NGA or APA
    34. INGAA and Enbridge argue that the stay policy is unlawful, 
under the NGA and the APA, because it seeks to achieve an objective--
conditioning a certificate holder's eminent domain authority--that is 
directly prohibited by statute through indirect means.\71\ INGAA and 
Enbridge contend that because the Commission has no authority to deny 
or restrict certificate holders from exercising the power of eminent 
domain, the Commission's new policy of presumptively staying its 
section 7 certificate orders is an unlawful workaround of a statutory 
prohibition and improperly limits a certificate holder's statutorily 
conferred eminent domain authority.\72\
---------------------------------------------------------------------------

    \71\ INGAA Rehearing at 29-31; Enbridge Rehearing at 19-21.
    \72\ See INGAA Rehearing at 29-30 (citing Civil Aeronautics Bd. 
v. Delta Air Lines, Inc., 367 U.S. 316, 328 (1961); Cont'l Air 
Lines, Inc. v. CAB, 522 F.2d 107, 115 (D.C. Cir. 1974)); Enbridge 
Rehearing at 19-21.
---------------------------------------------------------------------------

    35. INGAA and Enbridge further contend that the stay policy 
violates section 19(c) of the NGA, which states that the filing of a 
rehearing request ``shall not, unless specifically ordered by the 
Commission, operate as a stay of the Commission's order.'' \73\ INGAA 
maintains that the Commission, by announcing in Order No. 871-B a 
general policy of presumptively staying certificate orders pending 
rehearing, acted in general, rather than with the specificity that NGA 
section 19(c) demands.\74\ INGAA further asserts that the policy is 
unlawful because it will result in the Commission staying its orders 
before either a rehearing request has been filed or a stay has been 
sought, an outcome not contemplated by the NGA.\75\ Finally, INGAA 
takes issue with the Commission's position that its authority to stay a 
certificate order is found in the APA, arguing that section 705 of that 
act authorizes the Commission to postpone the effective date of its 
actions only ``pending judicial review,'' and that this authority is 
inapplicable prior to the filing of a request for rehearing and while 
such request is pending before the Commission.\76\
---------------------------------------------------------------------------

    \73\ INGAA Rehearing at 31 (quoting 15 U.S.C. 717r(c)); see 
Enbridge Rehearing at 16-19.
    \74\ INGAA Rehearing at 31. INGAA notes that the word specific 
means ``[o]f, relating to, or designating a particular . . . thing'' 
and that if the Commission wants to grant a stay, it must do so 
based on the particular facts of a particular case. Id. at 32.
    \75\ Id.
    \76\ Id. at 33 (citing 5 U.S.C. 705).
---------------------------------------------------------------------------

    36. As explained in Order No. 871-B, NGA section 16 gives the 
Commission an independent basis for granting stays of a certificate 
order.\77\ Specifically, section 16 provides that ``[t]he Commission 
shall have the power to perform any and all acts, and to prescribe, 
issue, make, amend, and rescind such orders, rules, and regulations as 
it may find necessary or appropriate to carry out the provisions

[[Page 43083]]

of this [Act].'' \78\ Section 16 also mandates that Commission orders 
``shall be effective on the date and in the manner which the Commission 
shall prescribe.'' \79\ Thus, the NGA provides the Commission with 
broad authority to take actions necessary to carry out the act, and we 
find that, given the significant consequences that eminent domain has 
for landowners, issuance of a stay of a certificate order under certain 
narrowly prescribed circumstances is well within this authority. 
Because NGA section 16 is broadly applicable, the Commission utilizes 
the standard set forth in APA section 705 to determine whether a stay 
is justified.\80\ But the Commission's underlying authority derives 
from NGA section 16.
---------------------------------------------------------------------------

    \77\ 15 U.S.C. 717o; see Pub. Util. Dist. No. 1 of Okanogan 
Cty., Wash., 162 FERC ] 61,040, at P 13 (2018) (Okanogan PUD) 
(addressing analogous provision of the Federal Power Act (FPA)) 
(citing 16 U.S.C. 825h; Kings River Conservation Dist., 30 FERC ] 
61,151, at 61,320 (1985) (``The Commission's authority to issue a 
stay of a license order is derived primarily from Section 309 of the 
[FPA]''); Keating v. FERC, 569 F.3d 427, 429 (D.C. Cir. 2009) 
(noting that FERC has stayed the commencement of construction 
deadline pursuant to section 309 of the FPA)). The courts have held 
that the NGA and FPA should be interpreted consistently. See Env'tl 
Action v. FERC, 996 F.2d 401, 410 (D.C. Cir. 1993); Tenn. Gas 
Pipeline Co. v. FERC, 860 F.2d 446, 454 (D.C. Cir. 1988); see also 
Ark. La. Gas Co. v. Hall, 453 U.S. 571, 577 n.7 (1981).
    \78\ 15 U.S.C. 717o.
    \79\ Id.
    \80\ Under the APA, an agency may issue a stay of its order 
where the ``agency finds that justice so requires.'' 5 U.S.C. 705. 
In determining whether this standard has been met, we consider 
several factors, including: (1) Whether a stay is necessary to 
prevent irreparable injury; (2) whether issuing a stay may 
substantially harm other parties; and (3) whether a stay is in the 
public interest. See, e.g., Millennium Pipeline Co., L.L.C., 141 
FERC ] 61,022, at P 13 (2012); Ruby Pipeline, L.L.C., 134 FERC ] 
61,103, at P 17 (2011). But see Okanogan PUD, 162 FERC ] 61,040 at P 
13, n.21 (explaining, in the hydroelectric licensing context, that 
``[p]reviously, the Commission has applied different standards than 
the one set forth in section 705 of the APA.'') (citing Monongahela 
Power Co., 7 FERC ] 61,054 (1979) (``we considered [the motions for 
stay] under the standards of Virginia Jobbers Association v. FPC, 
259 F.2d 291 (D.C. Cir. 1958) and Washington Metropolitan Area 
Transit Commission v. Holiday Tours, Inc., 559 F.2d 841 (D.C. Cir. 
1977)''); Nantahala Power & Light Co., 20 FERC ] 61,026 (1982) 
(``finding that a stay pending rehearing is in the `public interest' 
''); Kings River Conservation Dist., 27 FERC ] 61,098 (1984) (``[i]t 
is appropriate and in the public interest to stay the license issued 
in Project No. 2890 until completion of judicial review.'')).
---------------------------------------------------------------------------

    37. In any event, we disagree with INGAA's argument that APA 
section 705, which authorizes an agency to postpone the effective date 
of its actions ``pending judicial review,'' \81\ means that a stay 
issued pursuant to this authority must be connected to ongoing judicial 
review proceedings and is thus inapplicable to any proceedings before 
the Commission that precede judicial review (e.g., the time for filing 
and considering requests for rehearing).\82\ INGAA construes the 
statute too narrowly. The clause ``pending judicial review'' in section 
705 could reasonably be construed as ``in anticipation of'' in which 
case all that is required is that the Commission reasonably 
anticipate--because rehearing has been sought or a proposal has been 
strongly protested--that a party will seek judicial review.
---------------------------------------------------------------------------

    \81\ 5 U.S.C. 705.
    \82\ See INGAA Rehearing at 33. Indeed, a request for rehearing 
does not simply precede, but is a mandatory prerequisite to, 
judicial review. 15 U.S.C. 717r(b).
---------------------------------------------------------------------------

    38. Further, in Order No. 871-B, the Commission announced only a 
general policy with respect to stays.\83\ Accordingly, although 
contained in a final rule, the Commission's discussion of that general 
policy did nothing more than explain how the Commission intends to 
approach a particular set of questions in the future without 
conclusively resolving those questions or otherwise fixing any rights 
or responsibilities.\84\ Indeed, as explained in Order No. 871-B, the 
Commission intends to make a particularized application of the policy 
in individual certificate orders and parties to those individual 
proceedings will have the opportunity to challenge the Commission's 
determination on whether to issue a stay in those proceedings. Notably, 
the Commission has issued five certificate orders since adopting the 
policy reflected in Order No. 871-B, with none of those orders 
containing a stay along the lines contemplated in Order No. 871-B.\85\
---------------------------------------------------------------------------

    \83\ General statements of policy are not be subject to pre-
enforcement judicial review. Nat'l Min. Ass'n v. McCarthy, 758 F.3d 
243, 251 (D.C. Cir. 2014) (citing Nat'l Park Hosp. Ass'n v. Dep't of 
Interior, 538 U.S. 803, 809-11 (2003)).
    \84\ See, e.g., INGAA v. FERC, 285 F.3d 18, 59-61 (D.C. Cir. 
2002) (finding Commission's discussion of seasonal rates within a 
final rule ``represents only a policy statement and therefore is 
neither binding on any party nor ripe for judicial review''); Am. 
Gas Ass'n v. FERC, 888 F.2d 136, 151-52 (D.C. Cir. 1989) (finding 
challenges to substantive aspects of Commission's cost recovery 
policy statement not ripe for review); Pac. Gas & Elec. Co. v. FPC, 
506 F.2d 33, 35 (D.C. Cir. 1974) (finding Order No. 467, a policy 
proposal on delivery priorities by natural gas companies during 
curtailment periods, to be a general statement of policy that was 
not reviewable under NGA section 19(b) because it lacked 
``sufficiently immediate and significant impact upon petitioners''). 
That is consistent with the Commission's long-standing approach of 
articulating its policies with respect to NGA section 7 certificate 
applications, while leaving all actual findings and determinations 
for future proceedings. See, e.g., Certification of New Interstate 
Natural Gas Pipeline Facilities, 88 FERC ] 61,227, corrected, 89 
FERC ] 61,040 (1999), clarified, 90 FERC ] 61,128, further 
clarified, 92 FERC ] 61,094, at 61,375 (2000) (explaining that the 
purpose of the Certificate Policy Statement is ``to provide the 
natural gas industry with guidance by stating the analytical 
framework the Commission will use to evaluate proposals for 
certificating new construction'' and that ``generally objections to 
such a statement are not directly reviewable. Rather, such review 
must await implementation of the policy in a specific case.''). In 
line with that interpretation, the discussion in Order No. 871-B 
regarding how the Commission will approach those future cases was 
not accompanied by any revisions to the Commission's rules or 
regulations.
    \85\ See Tuscarora Gas Transmission Co., 175 FERC ] 61,147 
(2021); N. Natural Gas Co., 175 FERC ] 61,146 (2021); Enable Gas 
Transmission, LLC, 175 FERC ] 61,183 (2021); WBI Energy 
Transmission, Inc., 175 FERC ] 61,182 (2021); N. Natural Gas Co., 
175 FERC ] 61,238 (2021). There were no landowner protests in any of 
these cases.
---------------------------------------------------------------------------

    39. Contrary to INGAA's and Enbridge's assertions, nothing in NGA 
section 19(c), which on its face contemplates that the Commission may 
stay its own orders, precludes the Commission from determining that a 
stay of an individual certificate order during the 30-day period for 
seeking rehearing. Section 19(c) provides that a request for rehearing 
does not automatically stay a Commission order.\86\ That section does 
not speak to, or otherwise limit, the Commission's authority to issue a 
stay of its own accord. As described above, NGA section 16 provides the 
Commission with broad authority to issue a stay where warranted by the 
facts and circumstances in a particular proceeding.
---------------------------------------------------------------------------

    \86\ See 15 U.S.C. 717r(c) (``The filing of an application for 
rehearing . . . shall not, unless specifically ordered by the 
Commission, operate as a stay of the Commission's order.'').
---------------------------------------------------------------------------

2. Qualifying Landowner Rehearing Requests
    40. Enbridge seeks clarification that, for the purpose of the 
policy, the term ``landowner'' means ``directly affected'' landowner, 
as defined by the Commission's regulations, or, in the alternative, 
rehearing.\87\ This clarification, Enbridge maintains, would align with 
the Commission's justification for the policy as it would ensure that a 
stay is applied only when a ``protest or request for rehearing is 
submitted by the owner of property that would be subject to an eminent 
domain proceeding (i.e., to directly affected landowners), and not 
owners of property that merely abuts the construction right-of-way or 
falls within a certain radius of compressor station construction or 
storage facilities.'' \88\
---------------------------------------------------------------------------

    \87\ Enbridge Rehearing at 14-16 (citing 18 CFR 157.6(d)(2)(i) 
(2020)).
    \88\ Id. at 15 (citing 18 CFR 157.6(d)(2)(i)).
---------------------------------------------------------------------------

    41. As a general matter, we agree with Enbridge's suggestion that 
the policy is intended to protect those whose property would be crossed 
or used by the proposed pipeline project as these are the landowners 
whose property rights could be acquired by the eminent domain authority 
that NGA section 7(h) confers upon certificate holders.\89\ Should the 
issue of a landowner's specific property interests arise in a

[[Page 43084]]

proceeding, the Commission will consider it.
---------------------------------------------------------------------------

    \89\ See 15 U.S.C 717f(h) (authorizing certificate holders to 
acquire by eminent domain ``the necessary right-of-way to construct, 
operate, and maintain a pipe line or pipe lines for the 
transportation of natural gas, and the necessary land or other 
property, in addition to right-of-way, for the location of 
compressor stations, pressure apparatus, or other stations or 
equipment necessary to the proper operation of such pipe line or 
pipe lines''); see also 18 CFR 157.6(d)(2)(i) (defining directly 
affected landowners).
---------------------------------------------------------------------------

3. Commitment To Refrain From Exercise of Eminent Domain
    42. Enbridge seeks clarification that the Commission will promptly 
lift a stay following a certificate holder's commitment that it will 
not exercise its right of eminent domain ``for any reason other than to 
obtain the access necessary to complete surveys'' while a qualifying 
landowner rehearing request is pending,\90\ or, in the alternative, 
rehearing.
---------------------------------------------------------------------------

    \90\ Enbridge Rehearing at 21-23.
---------------------------------------------------------------------------

    43. In Order No. 871-B, the Commission explained that a developer 
may file a motion seeking ``to preclude, or lift, a stay based on a 
showing of significant hardship,'' and expressly stated ``that a 
commitment by the pipeline developer not to begin eminent domain 
proceedings until the Commission issues a final order on any landowner 
rehearing requests will weigh in favor of granting such a motion.'' 
\91\ We reiterate that conclusion, but will not pre-judge the merits of 
any motion along the lines contemplated in Order No. 871-B. As with the 
other aspects of this policy, those determinations will be made in any 
future proceeding.
---------------------------------------------------------------------------

    \91\ Order No. 871-B, 175 FERC ] 61,098 at P 51.
---------------------------------------------------------------------------

4. Claims of Burden Shifting
    44. INGAA argues that the Commission unlawfully shifted to pipeline 
developers the burden of proof to show that a stay is not warranted and 
argues that such a change in policy can only be accomplished through 
notice and comment rulemaking.\92\ INGAA contends that the Commission 
failed to provide justification for its departure from past practice 
and failed to explain why it is permissible to shift this burden.\93\ 
Enbridge makes a similar argument, but takes it a step further arguing 
that the Commission failed to ``assess whether there were reliance 
interests, determine whether they were significant, and weigh any such 
interests against competing policy concerns.'' \94\ INGAA requests 
further clarification regarding how the Commission will determine when 
a stay should be issued and how specifically a developer can overcome 
the presumption that a stay will be granted.\95\
---------------------------------------------------------------------------

    \92\ See INGAA Rehearing at 33-35.
    \93\ Id. at 33-34.
    \94\ Enbridge Rehearing at 18-19.
    \95\ INGAA Rehearing at 34-35.
---------------------------------------------------------------------------

    45. In Order No. 871-B, the Commission acknowledged that the stay 
policy is a departure from past practice and explained its belief that 
``this new policy better balances the relevant considerations--such as 
fairness, due process, and developer certainty--thereby justifying the 
change in policy.'' \96\ We disagree with the petitioners that this 
policy improperly shifts the burden to pipeline developers. As we 
previously explained, the Commission will determine whether to impose a 
stay based on the circumstances presented in each particular 
certificate proceeding--the burden is not on the pipeline. Rather, the 
Commission is obligated to ensure that all of its decisions, including 
whether to impose a stay in individual certificate proceedings, are 
supported by the record and reasonably explained.\97\ And parties to 
those individual proceedings will have the opportunity to provide input 
to and challenge the Commission's decision to issue a stay, or not, in 
those proceedings.
---------------------------------------------------------------------------

    \96\ Order No. 871-B, 175 FERC ] 61,098 at P 49, n.101.
    \97\ See 15 U.S.C. 717r(b); 5 U.S.C. 706.
---------------------------------------------------------------------------

    46. We further disagree with INGAA's assertion that public notice 
and comment was required prior to the Commission announcing the stay 
policy. General statements of policy, such as the one announced in 
Order No. 871-B, are exempted from the APA's notice and comment 
procedures.\98\
---------------------------------------------------------------------------

    \98\ 5 U.S.C. 553(b)(A).
---------------------------------------------------------------------------

5. Consideration of Industry Concerns
    47. INGAA contends that the Commission both failed to sufficiently 
appreciate the harm that will befall the natural gas industry and to 
explain what activities certificate holders can perform while a stay is 
in place.\99\ INGAA points to the length of this proceeding to cast 
doubt on the Commission's statement that it has increased the speed 
with which it resolves rehearing requests.\100\ It also seeks further 
clarity regarding the types of activities that certificate holders may 
undertake while a stay is in place.
---------------------------------------------------------------------------

    \99\ See INGAA Rehearing at 35-39.
    \100\ Id. at 36.
---------------------------------------------------------------------------

    48. The Commission fully considered industry concerns and 
ultimately concluded that the stay policy announced in Order No. 871-B 
struck an appropriate balance between the interests of pipeline 
developers and landowners.\101\ The rehearing process in this 
rulemaking proceeding, involving generally applicable policy 
considerations, is not representative of the increased speed with which 
the Commission handles project-specific rehearing requests in the post-
Allegheny era. In fact, the Commission continues to strive to act on 
landowner rehearing requests (the subset of rehearing requests that may 
result in a stay extending beyond the 30-day period for seeking 
rehearing) within 30 days. The petitioners do not cite an instance of a 
delay in the Commission's issuance of an order on rehearing of a 
certificate order. While a stay is intact, certificate holders can 
engage only in those development activities that they were free to 
undertake prior to receiving a certificate order, such as negotiating 
easement agreements with landowners and conducting environmental 
surveys on private property they have permission to access.
---------------------------------------------------------------------------

    \101\ See Order No. 871-B, 175 FERC ] 61,098 at PP 48-51.
---------------------------------------------------------------------------

6. Landowner Ability To Seek Judicial Stay
    49. Finally, INGAA asserts that the Commission failed to explain 
why the policy is necessary in light of an aggrieved party's ability to 
seek a stay from a reviewing court after a request for rehearing is 
deemed denied.\102\
---------------------------------------------------------------------------

    \102\ INGAA Rehearing at 39.
---------------------------------------------------------------------------

    50. As the Commission explained in Order No. 871-B, certificate 
holders can, and routinely do, initiate condemnation proceedings 
immediately upon receipt of a certificate order.\103\ Absent a stay in 
a particular proceeding, certificate holders have the ability to 
initiate condemnation actions against landowners prior to the 
expiration of the 30-day period for seeking rehearing, and prior to the 
30-day period for the Commission to act on such a request before it may 
be deemed denied. This leaves a gap of approximately 60 days preceding 
a deemed denial and during which time landowners could be susceptible 
to condemnation proceedings being initiated prior to a reviewing court 
obtaining concurrent jurisdiction following the filing of a petition 
for review.\104\ As we explained at length in Order No. 871-B, this 
Commission finds the fundamental unfairness that could result from that 
outcome untenable. Further, the stay policy is an appropriate exercise 
of our authority, and there is no need to leave these matters solely to 
the courts.
---------------------------------------------------------------------------

    \103\ See, e.g., Allegheny, 964 F.3d at 6.
    \104\ See, e.g., Envtl. Def. Fund v. FERC, No. 20-1016, et al., 
2021 WL 2546672, at *8, *15 (D.C. Cir. June 22, 2021) (citing to 
relevant pipeline's use of eminent domain in support of court's 
decision to vacate certificate order).
---------------------------------------------------------------------------

C. Commission Determination

    51. In response to INGAA's, Enbridge's, and Mountain Valley's 
requests for rehearing, Order No. 871-B is hereby modified and the 
result

[[Page 43085]]

sustained, as discussed in the body of this order.

III. Document Availability

    52. In addition to publishing the full text of this document in the 
Federal Register, the Commission provides all interested persons an 
opportunity to view and/or print the contents of this document via the 
internet through the Commission's Home Page (http://www.ferc.gov). At 
this time, the Commission has suspended access to the Commission's 
Public Reference Room due to the President's March 13, 2020 
proclamation declaring a National Emergency concerning the Novel 
Coronavirus Disease (COVID-19).
    53. From the Commission's Home Page on the internet, this 
information is available on eLibrary. The full text of this document is 
available on eLibrary in PDF and Microsoft Word format for viewing, 
printing, and/or downloading. To access this document in eLibrary, type 
the docket number excluding the last three digits in the docket number 
field.
    54. User assistance is available for eLibrary and the Commission's 
website during normal business hours from FERC Online Support at (202) 
502-6652 (toll free at 1-866-208-3676) or email at 
[email protected], or the Public Reference Room at (202) 502-
8371, TTY (202) 502-8659. Email the Public Reference Room at 
[email protected].

IV. Dates

    55. The effective date of the document published on May 13, 2021 
(86 FR 26,150), is confirmed: June 14, 2021.

    By the Commission. Commissioner Chatterjee is not participating. 
Commissioner Danly is dissenting with a separate statement attached.
    Issued: August 2, 2021.
Debbie-Anne A. Reese,
Deputy Secretary.

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Limiting Authorizations To Proceed With Construction Activities Pending 
Rehearing

DANLY, Commissioner, dissenting:

    1. I dissent in full from today's order affirming the majority's 
modification and expansion of Order No. 871.\1\ As I stated in my 
dissent in Order No. 871-B, I would repeal the rule as it is no longer 
required by law or prudence.\2\ I write separately today to further 
explain how the Commission's new, unnecessary, and unjustifiable 
presumption to stay certificate orders conflicts with the plain text of 
the Natural Gas Act (NGA) and is beyond the Commission's authority.\3\ 
I also write to explain how the majority's presumptive stay is not 
based on reasoned decision making and therefore runs afoul of the 
Administrative Procedure Act (APA).
---------------------------------------------------------------------------

    \1\ See Limiting Authorizations to Proceed with Construction 
Activities Pending Rehearing, 176 FERC ] 61,062 (2021) (Order No. 
871-C).
    \2\ See Limiting Authorizations to Proceed with Construction 
Activities Pending Rehearing, 175 FERC ] 61,098 (2021) (Danly, 
Comm'r, dissenting at P 2) (Order No. 871-B).
    \3\ See id. (Danly, Comm'r, dissenting at PP 3, 6-14).
---------------------------------------------------------------------------

I. The Presumptive Stay Is Beyond the Commission's Authority and 
Contrary to the Plain Text of the Natural Gas Act

    2. In today's order, the majority states ``the Commission's 
underlying authority derives from NGA section 16.'' \4\ Specifically, 
the majority relies on the provisions providing the Commission 
authority ``to perform any and all acts . . . necessary or appropriate 
to carry out the provisions of this [Act]'' and to determine the 
effective date of its orders.\5\ Like many before it, the majority has 
turned to NGA section 16 when all else has failed, placing more weight 
upon this section than it can reasonably bear. NGA section 16 ``do[es] 
not confer independent authority to act.'' \6\ It is ``of an 
implementary rather than substantive character'' and ``can only be 
implemented `consistently with the provisions and purposes of the 
legislation.\7\' '' The majority, however, fails to confront this 
limitation on section 16's reach and employs this provision in a manner 
that contravenes the NGA in three respects.
---------------------------------------------------------------------------

    \4\ Order No. 871-C, 176 FERC ] 61,062 at P 36.
    \5\ Id. (quoting 15 U.S.C. 717o).
    \6\ New England Power Co. v. Fed. Power Comm'n, 467 F.2d 425, 
431 (D.C. Cir. 1972), aff'd, 415 U.S. 345 (1974).
    \7\ Id. at 430 (citation omitted).
---------------------------------------------------------------------------

    3. First, the majority's policy denies pipelines holding 
certificates the ability to exercise eminent domain for up to 150 
days--doing exactly what the majority explicitly concedes it cannot do: 
``restrict the power of eminent domain in a section 7 certificate.'' 
\8\ NGA section 7(h) authorizes ``any holder of a certificate'' to 
exercise eminent domain authority.\9\ Other than the issuance of a 
certificate, Congress ordained no other condition be met in advance of 
a pipeline pursuing eminent domain. The Commission can only employ NGA 
section 16 in a manner consistent with the other provisions of the act. 
Here, the use of section 16 is in direct in conflict with the statute--
and the majority does not see fit to argue otherwise.
---------------------------------------------------------------------------

    \8\ Order No. 871-B, 175 FERC ] 61,098 at P 45 (citation 
omitted). Indeed, Order No. 871-B quotes the Berkley v. Mountain 
Valley Pipeline, LLC, as stating, ``FERC does not have discretion to 
withhold eminent domain once it grants a Certificate.'' Id. P 45 
n.86 (quoting Berkley v. Mountain Valley Pipeline, LLC, 896 F.3d 
624, 628 (4th Cir. 2018)) (emphasis added).
    \9\ 15 U.S.C. 717f(h) (emphasis added).
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    4. Second, presumptively staying a pipeline's ability to pursue 
eminent domain is not appropriate under section 16 because such a delay 
is not a ``necessary or appropriate'' adjunct to the Commission's 
effectuation of its responsibilities under section 7 of the NGA. That 
section requires the Commission to issue certificates to applicants 
whose proposed natural gas facilities are found to be in the public 
convenience and necessity. The timing of a pipeline's use of eminent 
domain does not weigh into the Commission's determination of whether 
proposed pipeline facilities are in the public convenience and 
necessity. If it did, the majority would rely on the Commission's 
authority under NGA section 7(e) to ``attach to the issuance of the 
certificate . . . such reasonable terms and conditions as the public 
convenience and necessity may require.'' \10\ The majority, however, 
does not.\11\ Nor does the majority cite any other provision of the NGA 
for which the Commission's action would be ``necessary or appropriate'' 
under section 16.
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    \10\ 15 U.S.C. 717f(e).
    \11\ See Order No. 871-B, 175 FERC ] 61,098 at P 45 (``In other 
words, the Commission lacks the authority to deny or restrict the 
power of eminent domain in a section 7 certificate.'') (citation 
omitted).
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    5. Third, the only reasonable reading of NGA section 7 leads to the 
conclusion that Congress intended for certificates to be effective upon 
issuance and acceptance, and for the right to exercise eminent domain 
to attach thereupon. NGA section 7(e) provides, ``a certificate shall 
be issued'' so long as the applicant is ``able and willing properly to 
do the acts . . . .'' \12\ Further, NGA section 7(h) authorizes ``any 
holder of a certificate of public convenience and necessity'' to 
acquire by eminent domain the land necessary for the construction, 
operation, and maintenance of its pipeline facilities.\13\ Black's Law 
Dictionary defines ``holder'' as ``[a] person with legal possession of 
a document of title or an investment security,'' meaning that the title 
was issued and accepted by that person.\14\ This view has been shared 
by the

[[Page 43086]]

courts \15\ and the Commission.\16\ This is not to say that the 
Commission can never make a certificate effective after its issuance or 
stay a certificate order. Both may be warranted in certain instances. 
In my view, however, it is contrary to the purpose of the NGA to adopt 
a policy that presumptively stays certificates for the avowed purpose 
of delaying a pipeline's Congressionally-authorized entitlement to 
exercise eminent domain.\17\
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    \12\ 15 U.S.C. 717f(e) (emphasis added).
    \13\ Id. Sec.  717f(h) (emphasis added).
    \14\ Holder, Black's Law Dictionary (11th ed. 2019).
    \15\ See Maritimes & Ne. Pipeline, L.L.C. v. Decoulos, 146 F. 
App'x 495, 498 (1st Cir. 2005) (``Once a CPCN is issued by the FERC, 
and the gas company is unable to acquire the needed land by contract 
or agreement with the owner, the only issue before the district 
court in the ensuing eminent domain proceeding is the amount to be 
paid to the property owner as just compensation for the taking.'') 
(emphasis added); E. Tenn. Nat. Gas Co. v. Sage, 361 F.3d 808, 818 
(4th Cir. 2004) (``Once FERC has issued a certificate, the NGA 
empowers the certificate holder to exercise `the right of eminent 
domain' over any lands needed for the project.'') (emphasis added); 
Bohon v. FERC, No. 20-6 (JEB), slip op. at 2 (D.D.C. May 6, 2020) 
(``FERC's issuance of a certificate, moreover, conveys the power of 
eminent domain to its holder.'') (emphasis added); Paul H. Stitt & 
Loretta Stitt, 39 F.P.C. 323, 324 (1968) (``While the condemnation 
powers granted to certificate holders by Section 7(h) of the Natural 
Gas Act operate prospectively from the date of issuance of a 
certificate . . . .'') (emphasis added).
    \16\ See 18 CFR 157.20(a) (2020) (``The certificate shall be 
void and without force or effect unless accepted in writing by 
applicant . . . .'').
    \17\ This is and separate apart from the argument that I raised 
in my earlier dissent that NGA section 19(c), while allowing for 
stays, requires a specific order by the Commission. Order No. 871-B, 
175 FERC ] 61,098 (Danly, Comm'r, dissenting at PP 8-10; see also 15 
U.S.C. 717r(c) (``The filing of an application for rehearing under 
subsection (a) shall not, unless specifically ordered by the 
Commission, operate as a stay of the Commission's order.''). 
Clearly, an automatically-applied presumption is not a specific 
order and thus violates the unambiguous terms of the statute.
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    6. In addition to NGA section 16, the majority appears to place 
some reliance on APA section 705, which provides ``[w]hen an agency 
finds that justice so requires, it may postpone the effective date of 
action taken by it, pending judicial review.'' \18\ I presume this is 
the case because the majority responds to arguments raised by the 
Interstate Natural Gas Association of America (INGAA) that the phrase 
``pending judicial review'' in APA section 705 means an agency stay 
must be ``tied to litigation.'' \19\ The majority asserts that a more 
reasonable interpretation of the phrase ``pending judicial review'' is 
``in anticipation of [judicial review].'' \20\ I've found no court that 
supports that position and multiple courts, in fact, disagree.\21\
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    \18\ 5 U.S.C. 705.
    \19\ Order No. 871-C, 176 FERC ] 61, 61,062 at P 37, n.82 
(citing INGAA Rehearing at 33).
    \20\ Id. P 37.
    \21\ Nat. Res. Def. Council v. U.S. Dep't of Energy, 362 F. 
Supp. 3d 126, 150 (S.D.N.Y. 2019) (``A stay is supposed to be 
grounded on `the existence or consequences of the pending 
litigation.' ''); Bauer v. DeVos, 325 F. Supp. 3d 74, 106 (D.D.C. 
2018) (``Most significantly, the relevant equitable considerations 
are not free-floating but, rather, must be tied to the underlying 
litigation. Section 705 expressly provides that an agency may 
'postpone the effective date of [agency] action . . . pending 
judicial review.' '') (emphasis in original); Sierra Club v. 
Jackson, 833 F. Supp. 2d 11, 34 (D.D.C. 2012) (``Where, as in this 
case, [an agency] seeks to justify a stay of its rules `pending 
judicial review,' the agency must have articulated, at a minimum, a 
rational connection between its stay and the underlying litigation 
in the court of appeals.'').
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II. Presumptive Stay Is Not Based on Reasoned Decision Making

    7. To the extent the majority merely argues that it can apply the 
three factors of the equitable standard set forth in APA section 705 to 
determine whether a stay is warranted, I agree. However, the majority's 
application of the equitable standard is not based on reasoned decision 
making, and thus violates the APA.\22\
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    \22\ Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. 
Auto. Ins. Co., 463 U.S. 29, 30 (1983). See also Elec. Consumers 
Res. Council v. FERC, 747 F.2d 1511, 1513-14 (D.C. Cir. 1984) (``We 
defer to the agency's expertise . . . so long as its decision is 
supported by `substantial evidence' in the record and reached by 
`reasoned decision-making,' including an examination of the relevant 
data and a reasoned explanation supported by a stated connection 
between the facts found and the choice made.'') (citing Burlington 
Truck Lines v. United States, 371 U.S. 156, 168 (1962); Memphis 
Light, Gas & Water Div. v. FPC, 504 F.2d 225, 230 (D.C. Cir. 1974); 
16 U.S.C. 825l (1982)).
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    8. As I stated in my dissent to Order No. 871-B, the majority's 
assumption that the mere existence of a ``landowner protest'' 
automatically means a stay is required in the interest of justice is--
at best--questionable.\23\ This represents a broad category of 
litigant, whose mere participation in a proceeding would temporarily 
extinguish a certificate holder's Congressionally-established rights. 
Surely, the Commission should at least impose rational limits on the 
rule they are establishing. For example, will the Commission stay a 
certificate where there is a protest by a landowner with property 
interests that abut the proposed right-of-way but are not subject to 
condemnation? And the Commission's policy applies to where there is a 
``landowner protest.'' Will the Commission apply the stay where a 
landowner protested but did not intervene and thus cannot seek 
rehearing or judicial review? What about in the case where the 
landowner joined a protest, but may not have active interests in the 
proceeding?
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    \23\ Order No. 871-B, 175 FERC ] 61,098 (Danly, Comm'r, 
dissenting at P 8).
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    9. The majority also fails to consider the second factor ``whether 
issuing a stay may substantially harm other parties.'' Will the 
Commission stay a certificate where the proposed project is delivering 
natural gas to municipalities that need the gas within six months of 
certificate issuance? Will the Commission stay a certificate if the 
delay caused by its stay would cause an additional year's delay in 
construction because of seasonal restrictions? To what degree will the 
financial consequences for the project proponent be considered? What 
about the consequences to the pipeline's customers? It is not 
inconceivable that those projects whose applications have been pending 
for more than a year ultimately will be canceled as a result of 
delay.\24\ How can the potential cancellation of a project that has 
been determined by the Commission to be in the public interest itself 
be in the public interest or, under the second factor, be found not to 
``substantially harm other parties''?
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    \24\ See id. (Danly, Comm'r, dissenting at P 14) (noting 
Dominion Energy Transmission, Inc. withdrew its application for a 
certificate for its Sweden Valley Project that it had filed 
seventeen months prior).
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III. Conclusion

    10. The power of eminent domain is surely profound and formidable. 
I cannot fault my colleagues for the anxiety they have expressed 
regarding its wise and just exercise. However, the Commission, as a 
mere ``creature of statute,'' can only act pursuant to law by which 
Congress has delegated its authority.\25\ Congress conferred the right 
to certificate holders to pursue eminent domain in federal district 
court or state court,\26\ having recognized that states ``defeat[] the 
very objectives of the Natural Gas Act'' \27\ by conditioning or 
withholding the exercise of eminent domain. Congress has made that 
determination. It has codified it into law. The Commission, as an 
executive agency, is empowered only to implement Congressional mandate, 
not to second-guess Congressional wisdom or attempt to do indirectly 
what it cannot directly.\28\
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    \25\ Atl. City Elec. Co. v. FERC, 295 F.3d 1, 8 (D.C. Cir. 2002) 
(``As a federal agency, FERC is a 'creature of statute,' having `no 
constitutional or common law existence or authority, but only those 
authorities conferred upon it by Congress.''') (quoting Michigan v. 
EPA, 268 F.3d 1075, 1081 (D.C. Cir. 2001)) (emphasis in original); 
see Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) (``It 
is axiomatic that an administrative agency's power to promulgate 
legislative regulations is limited to the authority delegated by 
Congress.'').
    \26\ See 15 U.S.C. 717f(h).
    \27\ S. Rep. No. 80-429, at 3 (1947).
    \28\ Richmond Power & Light v. FERC, 574 F.2d 610, 620 (D.C. 
Cir. 1978) (``What the Commission is prohibited from doing directly 
it may not achieve by indirection.'').
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    11. Despite this, I doubt that the Commission's arguments will be

[[Page 43087]]

presented to the courts. It will be challenging for those that are 
harmed by the issuance of a generally-applicable policy to show 
aggrievement before it is actually applied in a case. And by the time 
those harmed are able seek review, the damage of the stay will have 
been done and the stay will have been lifted. My pessimistic outlook is 
that despite this order's obvious infirmities, the Commission will 
avoid judicial scrutiny and thereby thwart the intent of Congress.
    For these reasons, I respectfully dissent.
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James P. Danly,
Commissioner.

[FR Doc. 2021-16812 Filed 8-5-21; 8:45 am]
BILLING CODE 6717-01-P