Environmental Groups Ask FERC to Hold Hearing, NJ Sierra Club Urges a Different Approach

The Eastern Environmental Law Center (EELC), on behalf of New Jersey Conservation Foundation (NJCF) and the Stony Brook-Millstone Watershed Association (SBMWA), today announced it has filed a complaint and motion with the Federal Energy Regulatory Commission (FERC) requesting an evidentiary hearing to assess public need for the proposed PennEast pipeline in New Jersey and Pennsylvania. Members of Congress and New Jersey state legislators voiced their support for a hearing.

“FERC must have substantial evidence of significant public benefit to approve PennEast’s application, but the company’s existing record fails to meet that test. Before FERC proceeds, it needs to take a closer look at the application,” said Jennifer Danis, senior lawyer, EELC.

“The proposed pipeline would have significant adverse impacts to existing ratepayers, landowners and the environment, and FERC must account for the serious questions that the public and industry experts have raised about the economics of this project,” said Tom Gilbert, campaign director, NJCF. “To determine exactly what demand is purportedly being met by PennEast, we are taking legal action requesting that FERC hold an evidentiary hearing.”

The complaint and motion filed today asserts that PennEast is exercising a new form of market abuse which must be assessed by FERC by an evidentiary hearing. The six owners of PennEast have contracted for 74 percent of the proposed pipeline’s initial capacity. An analysis from national energy expert, Skipping Stone, concluded that PennEast cannot rely on such non-arms-length contracts to demonstrate public need. Further, Skipping Stone determined that there is already an existing 49.9 percent more pipeline capacity than is needed in New Jersey, even in the harsh winter that the state experienced in 2013. Because there is no need for and little interest in PennEast, after 10 years, the owners would have to bear 88 percent of the pipeline’s total capacity.

Meanwhile, the New Jersey Sierra Club issued a statement in opposition to this suit against FERC. “Since FERC still controls the process and the Energy Act of 2005 gives them such great latitude, then this suit could easily be dismissed. They [FERC] don’t need to prove need because of the 2005 Act and energy deregulation. Not to mention, the four companies that own PennEast can just say they’re selling the gas to themselves, already proving need,” said Jeff Tittel, Director of the New Jersey Sierra Club. “What we’re more concerned about is that FERC and PennEast will fix any defects they have in their applications and filings. This will make it more difficult for us to challenge them in the future.”

Despite the Sierra Club’s objection, many legislators have stepped up to support the suit and vehemently oppose the proposed pipeline.

“National energy experts have provided credible evidence contradicting PennEast’s claim that New Jersey needs its proposed pipeline. I call upon FERC not to move forward with this massive pipeline if it is not, in fact, needed,” said Congresswoman Bonnie Watson Coleman (D-12).

“The power of eminent domain must not be granted to a private company in the absence of compelling public need,” said Congressman Leonard Lance (R-7).  “I support the call for an evidentiary hearing.”

EELC has requested that FERC issue an order to initiate a full discovery hearing before an administrative law judge, to create an opportunity to:

  • Test PennEast’s underlying economic data and assumptions regarding public need;
  • Cross-examine PennEast’s experts, models and economic claims to assess their credibility; and
  • Cross-examine PennEast Consortium’s officers and directors to gauge the motives and intent of their companies in proposing this project.

“PennEast poses serious threats to New Jersey’s land, water, open space and property rights,” said Jim Waltman, executive director, SBMWA. “Before the review process moves one more step forward, the corporations advocating this private project must first demonstrate a public need for it – something they haven’t even come close to doing.”

U.S. Senate testimony delivered yesterday by the Environmental Defense Fund highlighted the lack of need for additional pipelines in the Northeast and cautioned against overbuilding unnecessary infrastructure. Click here to view the testimony transcript.

Several other federal and state legislators also expressed support for an evidentiary hearing:

  • Congressman Michael G. Fitzpatrick (R-PA) stated in a letter to FERC: “The pipeline could have significant impacts. FERC should not rely on self-dealing contracts between the owners of PennEast and their affiliates as a foundation for finding market need. I strongly support the call for a full evidentiary hearing to determine whether there is legitimate public need for the project.”
  • Senator Shirley Turner (D-15), Assembly Members Reed Gusciora (D-15) and Elizabeth Maher Muoio (D-15) signed a joint letter to FERC in which they stated: “Based on the data released in the Skipping Stone report, we urge FERC to hold a full evidentiary hearing to determine if there is public need for the proposed pipeline and whether less disruptive and more cost effective alternatives exist to meet such demand.”
  • Assemblyman Andrew Zwicker (D-16) wrote FERC, “I strongly support the call for a full evidentiary hearing. Given the lack of need, granting the power of eminent domain is not in the public interest.”
  • In his letter to FERC, Senator Jim Whelan (D-2) requested that FERC “hold an evidentiary hearing to determine if PennEast can prove public need.  We should not be investing in inflexible expensive fossil fuels, but exploring more options for clean, renewable energy sources — funding the continued research and development of wind and solar energy initiatives.”

For MercerMe’s ongoing in-depth coverage of PennEast, check out this link.


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