On April 2, 2019, FERC affirmed its decision that the New York Department of Environmental Conversation (“NY DEC”) waived its authority to issue or deny a Clean Water Act (“CWA”) section 401 water quality permit application filed by National Fuel Gas Supply Corporation and Empire Pipeline, Inc. (collectively, “National Fuel”) by failing to act on the application within one year of receipt.  Specifically, FERC held that an agreement between NY DEC and National Fuel to alter the receipt date of the application did not extend the CWA’s statutory one-year deadline for NY DEC to act on the application.

On March 2, 2016, NY DEC received National Fuel’s application for a water quality certification for its Northern Access 2016 Project (“Project”), which includes approximately 99 miles of pipeline, new and modified compression facilities, and ancillary facilities in Pennsylvania and New York.  On January 20, 2017, National Fuel and NY DEC agreed to revise the date on which the application was received by NY DEC to April 8, 2016, which NY DEC argued would push back the deadline for NY DEC’s determination on the application to April 7, 2017.  On April 7, 2017, NY DEC denied National Fuel’s application.  Subsequently, FERC issued an order determining that NY DEC waived its CWA section 401 authority to issue or deny a water quality certification for the Project by failing to act within the CWA’s deadline of one year from when it received the application (“Waiver Order”).

NY DEC and Sierra Club filed requests for rehearing of and a motion to stay FERC’s Waiver Order.  NY DEC argued that its April 7, 2017 denial of the application was timely because National Fuel agreed to extend the one-year deadline in a separate agreement.  In addition, NY DEC argued that the Waiver Order encourages a “withdraw and refile” practice, which would cause more delay than permitting agreements to extend the deadline.  Both NY DEC and Sierra Club contended that National Fuel is estopped from arguing the agreement is not valid since NY DEC relied on the agreement.  NY DEC and Sierra Club also moved to stay the Waiver Order, and argued that irreparable harm is likely to occur if the Project moves forward without NY DEC’s mitigation measures.

FERC upheld its determination that NY DEC was required to act by March 2, 2017, one year from NY DEC’s actual receipt of National Fuel’s application.  FERC relied on a recent decision of the United States Court of Appeals for the District of Columbia Circuit in Hoopa Valley Tribe v. FERC (“Hoopa Valley Tribe”) that the CWA section 401 deadline cannot be waived by an agreement between the state and the applicant (see January 30, 2019 edition of the WER).  FERC stated that Congress expressly provided for projects to move forward without state water quality certification when the state waives its authority by not acting within one year.  FERC affirmed that the CWA prohibits state agencies and applicants from using written agreements to delay water quality certifications, which FERC found would contravene CWA section 401’s intent to prevent a state’s delay of processing an application.  Regarding NY DEC’s “withdraw and refile” argument, FERC indicated that whether such a procedure would effectively extend the one-year deadline is “in doubt” following Hoopa Valley Tribe.  FERC further concluded that NY DEC’s policy considerations are outweighed by the statute’s language and intent.  With respect to NY DEC’s and Sierra Club’s estoppel arguments, FERC reiterated that the validity of the agreement between the parties did not affect FERC’s interpretation of CWA section 401’s controlling language.  In addition, FERC denied NY DEC’s and Sierra Club’s motions to stay and found that neither party demonstrated irreparable harm because FERC considered all relevant environmental factors in the Environmental Assessment (“EA”), and that the EA’s finding of no significant impact did not assume NY DEC’s mitigation conditions.

A copy of FERC’s order is available here.