Although it granted Millennium Pipeline Co. LLC’s request, the Federal Energy Regulatory Commission (“FERC”) refused to overrule New York’s denial of a Clean Water Act (“CWA”) permit, rejecting Constitution Pipeline Co. LLC’s argument that the state waived its authority under Section 401 of the CWA.

Under Section 401 of the CWA, state agencies have one year to act on a permit application by a pipeline company, or else their authority may be deemed waived. Although New York State Department of Environmental Conservation’s April 2016 denial of a CWA Section 401 water quality permit came nearly three years after Constitution Pipeline initial application, FERC found that the NYSDEC had acted within the statutory limits imposed by Section 401. FERC based its finding on Constitution’s two withdrawals and resubmissions of its applications, finding each resubmission reset the one-year deadline. Constitution Pipeline submitted its original application in 2013, then, refiled its application in May 2014, only to resubmit it again in April 2015 (to give NYSDEC additional time to review).

“By withdrawing its applications before a year had passed, and by presenting New York DEC with new applications, Constitution gave New York DEC new deadlines,” FERC said in its order. “The record does not show that New York DEC in any instance failed to act on an application that was before it for more than the outer time limit of one year.” FERC further stated: “We decline to do so [shorten the review time] because entertaining, on a case-by-case basis, challenges to a certifying agency’s processing of a water quality certification would create uncertainty for both state certifying agencies and applicants, and is contrary to commission precedent in both hydroelectric and natural gas proceedings”. Although FERC is “concerned” that states and developers repeatedly withdraw and refile permit applications, and thereby, aren’t acting in the public interest or the spirit of the CWA. FERC states that such practice doesn’t violate the letter of the law.

Meanwhile, NYSDEC and FERC battle in the Second Circuit over FERC quashing of NYSDEC’s denial of a Section 401 permit for a Millennium Pipeline Co. LLC’s pipeline for blowing past the one-year CWA deadline. Oral argument is scheduled for January 24. Apparently, no refiling or resubmissions there. Moral of the story – cooperate with state agencies at your own risk, or at least only with whom you have a working relationship.