On September 15, 2017, the Federal Energy Regulatory Commission (FERC or the Commission) issued an order in which it concluded that delays by the New York Department of Environmental Conservation (NYDEC or the Department) in processing Millennium Pipeline Company’s application for Clean Water Act (CWA) water quality certification constituted a waiver of the certification requirement. The order resolves a lengthy saga regarding water quality certification for Millennium’s Valley Lateral Project. It reaffirms previous FERC precedent establishing that the one-year waiver period for CWA water quality certification decisions by state agencies begins when the state agency receives a written application for certification, regardless of the state agency’s determination that the application is incomplete or requests for further information.

The central issue in the Millennium Pipeline controversy was when the statutory one-year waiver period (described here) for CWA water quality certification begins. Given the implications of the project’s timeline and dealings with NYDEC on this issue for future pipeline projects, a chronology of the key events leading up to the FERC order is included below. Millennium took the position that the one-year waiver period commenced on November 13, 2015 (when the company first submitted a written request for certification to NYDEC), whereas NYDEC asserted that the period commenced on August 31, 2016 (when Millennium provided the second of its responses to NYDEC’s requests for additional information in support of its application).

In its September 15 order, FERC sided with Millennium, stating that the Commission “interpret[s] the triggering date for the [CWA] waiver provision to be the date a certification application is filed with the relevant agency.” In support of its decision, FERC cited the plain language of the CWA Section 401, which specifies that water quality certification is waived when the certifying agency “fails or refuses to act on a request for certification within a reasonable period of time (which shall not exceed one year) after receipt of such request.” 33 U.S.C. § 1341(a)(1) (emphasis added). FERC further relied upon its own precedent and regulations concerning hydropower projects, as well as case law from the Ninth and D.C. Circuits, in reaching its conclusion.

While the Millennium Order reaffirms FERC’s position with respect to water quality certification waivers in the context of natural-gas pipeline projects, its precedential value is questionable in light of the fact that courts have rejected FERC’s interpretations of the CWA Section 401 certification provisions as authoritative, “given that FERC is not charged in any manner with administering the Clean Water Act.” AES Sparrows Point LNG, LLC v. Wilson, 589 F.3d 721, 730 (4th Cir. 2009); see also Alabama Rivers Alliance v. FERC, 325 F.3d 290, 297 (D.C. Cir. 2003). In its September 15 order, FERC acknowledges this precedent, noting that “[t]he Commission was not a party to [AES Sparrows] nor was the Commission’s interpretation of section 401 at issue.” The next step in the saga will therefore likely be a challenge to the order by NYDEC in the D.C. Circuit, and ultimately a decision that answers at least some of the lingering questions on the timing of the CWA Section 401 waiver provision.

The next step in the saga will therefore likely be a challenge to the Order by NYDEC. The Department would first have to apply for rehearing before FERC (within 30 days of September 15, the date the order was issued), but any application for rehearing would not stay the Commission’s order. Upon receiving an unfavorable decision on rehearing from FERC, the Department could then seek judicial review in the DC Circuit. A judicial decision may be helpful in resolving at least some of the lingering questions on the timing of the CWA Section 401 waiver provision.

Chronology of Events

  • November 13, 2015: Millennium applied to FERC for a Certificate of Public Convenience and Necessity requesting authorization to construct and operate the Valley Lateral Project.
  • November 23, 2015: NYDEC received Millennium’s formal written application for water quality certification.
  • December 7, 2015: NYDEC sent Millennium a Notice of Incomplete Application pending FERC’s issuance of the Environmental Assessment (EA) for the project as required under the National Environmental Policy Act (NEPA).
  • May 9, 2016: FERC issued an EA for the project.
  • June 17, 2016: NYDEC sent another Notice of Incomplete Application to Millennium requesting additional information on three protected species and minor clarifications in support of its application.
  • August 31, 2016: Millennium provided the second of its responses to NYDEC’s requests for additional information in support of its application.
  • November 9, 2016: FERC granted a Certificate of Public Convenience and Necessity to the project, conditioned upon Millennium filing documentation of receipt of all authorizations required under federal law or evidence of waiver thereof (including CWA Section 401 certification) prior to commencing construction.
  • December 2016: Millennium petitioned the D.C. Circuit Court of Appeals under Natural Gas Act (NGA) Section 19(d)(2), requesting a determination that NYDEC unlawfully delayed action on its certification application and thus waived its authority under CWA Section 401.
  • June 23, 2017: The D.C. Circuit dismissed Millennium’s petition on jurisdictional grounds, explaining that the company’s remedy was to present evidence of waiver directly to FERC to seek authorization to begin construction of the project.
  • July 21, 2017: Millennium filed a Request for Notice to Proceed with Construction of the project with FERC, alleging that NYDEC had waived its certification authority by failing to act on Millennium’s application for certification within one year of its submittal on November 23, 2015.
  • July 26, 2017: NYDEC filed comments with FERC disagreeing that waiver had occurred, stating that the one-year waiver clock began running on August 31, 2016, the date that the Department received Millennium’s final response to the Department’s request for additional information.
  • August 30, 2017: NYDEC provided Notice denying Millennium’s application for certification and moved FERC to reopen the record and to stay the Commission’s November 9, 2016 Certificate order or, in the alternative, to grant rehearing and stay of the Certificate order.
  • September 15, 2017: FERC issued an order finding that NYDEC had waived its certification authority by not acting on Millennium’s application by November 23, 2016, one year from the date that the Department received Millennium’s formal written application.