Dive Brief:

• Federal regulators yesterday stuck to their guns, rejecting a petition for rehearing filed by the New York State Department of Environmental Conservation over the approval of the 8-mile Valley Lateral Pipeline that would move shale gas from the existing Millennium Pipeline to the 680 MW Valley Energy Center in Orange County, N.Y.
• The Federal Energy Regulatory Commission this week denied a request for a stay by the DEP to block construction. Next month, the U.S. Court of Appeals for the Second Circuit will hear arguments over the lateral. Earlier this month, the court approved a temporary stay of construction.
• In an unrelated proceeding, North Carolina regulators have asked FERC to reconsider the return on equity it granted to the Atlantic Coast Pipeline in its October approval.

Dive Insight:

States are continuing to battle with federal regulators over who has final authority to greenlight pipeline developments in two high-profile cases now before FERC. The commission approved the Atlantic Coast and Mountain Valley pipeline projects in two 2-1 votes in October, but opponents of those projects have not given up the fight.

This week, FERC rejected a request by New York to block construction. The federal agency previously ruled the state had waited too long to reject a water quality certificate Millennium had requested.

FERC said it disagreed with the DEC's contention that it, as the certifying state agency, is the appropriate agency to interpret any ambiguous terms of the Clean Water Act. "In general, courts do not afford deference to state agency interpretations of federal law even where state agencies are delegated substantial roles in cooperative federalist schemes," the commission noted.

On Dec. 5, the Court of Appeals is slated to hear arguments over the emergency stay.

In another proceeding, the North Carolina Utilities Commission filed a rehearing request this week challenging the Atlantic Coast Pipeline’s approved 14% return on equity.

The 600-mile pipeline would carry fracked natural gas from West Virginia into North Carolina and Virginia, and includes three planned compressor stations. Dominion Energy has estimated the pipeline's cost at up to $5 billion.    

Separately, almost two dozen groups opposed to the project have asked FERC to reconsider its approval of the project. N.C. WARN issued a statement saying the agency “cut corners, ignored environmental justice and climate destruction and usurped state authority in approving construction.”