On November 30, 2017, FERC upheld its denial of Rover Pipeline, LLC’s (“Rover”) request for a blanket construction certificate—which would have allowed Rover to perform certain routine construction activities and operations—in connection with the Rover Pipeline Project.  FERC determined that it was not confident Rover would comply with the blanket construction certificate’s environmental requirements due to Rover’s demolition of a historic property along the project’s route during the certificate proceeding.  FERC also concluded that Rover intentionally circumvented the National Historic Preservation Act (“NHPA”) by purchasing and demolishing the property.

On February 2, 2017, FERC issued a certificate of public convenience and necessity authorizing Rover to construct and operate approximately 510.7 miles of new pipeline and related facilities from the Appalachian supply area to an interconnection with Vector Pipeline, LP in Livingston County, Michigan.  However, FERC denied Rover’s request for a Part 157, Subpart F blanket construction certificate to perform certain routine construction activities and operations.  In doing so, FERC reasoned that Rover “could not be relied upon to comply with the environmental regulations required for all blanket certificate projects” in light of Rover’s demolition of the Stoneman House, an 1843 historic federal house eligible for listing in the National Register of Historic Places that Rover purchased and destroyed during the certificate proceeding (see July 17, 2017 edition of the WER).

On March 6, 2017, Rover requested rehearing of FERC’s denial of the blanket construction certificate.  Rover argued, among other things, that FERC’s decision was arbitrary and capricious because FERC did not make the requisite finding that Rover “intended” to circumvent the NHPA.  Instead, Rover argued that it only demolished the house after finding it unsuitable for office space.  Rover further contended the public convenience and necessity standard for issuing blanket construction certificate does not include consideration of FERC’s confidence in the applicant’s compliance with environmental regulations, but rather involves “relatively little scrutiny.”

In its order denying rehearing, FERC explained that it denied the blanket construction certificate under the public convenience and necessity standard, not pursuant to the NHPA.  FERC held that Rover did not meet this standard because FERC could not form a “reasonable basis” to expect that Rover would adhere to the program’s environmental requirements due to the purchase and demolition of the Stoneman House.  FERC also addressed Rover’s NHPA arguments, noting evidence showed that Rover considered demolishing the Stoneman House prior to and immediately after purchasing the property.  FERC also stated that evidence showed that Rover considered several options to mitigate the Rover Pipeline Project’s adverse effects on the Stoneman House, but ultimately chose to purchase and demolish the Stoneman House so that the project would not have adverse effects on the property.  FERC concluded that, based on this evidence, Rover demolished the Stoneman House with the intent to circumvent the NHPA.  Lastly, FERC noted that pipeline companies have an ongoing obligation to supplement certificate applications with relevant information and provide documentation of consultations with the State Historic Preservation Office, but stated that Rover did neither.

FERC’s order can be found in Docket No. CP15-93, et al.  A copy of FERC’s order is available here.