Project Opponents - Condemnation Conundrum for Rover?

The impact of the Federal Energy Regulatory Commission's (FERC) lack of quorum is not yet well understood. With no precedent to lean on, there is plenty of room for speculation. But with each passing day, we gain additional clarity into what to expect. Project delays may be one potential byproduct. In addition to delays being driven by protestors and the complex web of necessary state and federal permits, condemnation litigation may emerge as a new variable, due to an odd procedural issue created by the lack of a quorum.


Upon learning that the FERC would not have a quorum, the pipeline industry expressed its concerns about the potential for additional delay for project development. Newly appointed FERC Chairman LaFleur responded to these docketed letters, announcing that the FERC would work to address as many issues as possible. As promised, FERC issued a higher than average number of Orders in the course of a couple days, including Rover's Certificate. Project developers fortunate enough to receive a Certificate will not likely be impacted, because a notice to proceed with construction can be issued by FERC staff. But new concerns surrounding a lack of quorum exist, despite FERC delegating some authority to the staff.


Following approval of Spectra's Atlantic Bridge Project, Senators Elizabeth Warren and Edward Markey filed a letter with the FERC expressing their concern about the lack of quorum impacting pipeline project opponents. In particular, the senators explained their concerns regarding whether project opponents would have the ability to pursue rehearing of a decision. As such, the senators suggested that the FERC should rescind its decision on the Atlantic Bridge project. Typically, opponents of a project's approval may seek rehearing of the order issuing a Certificate by requesting a rehearing no later than 30 days after issuance of a final decision . However, a request for rehearing can only be ruled upon by the Commissioners, and not staff, leaving opponents with no relief until an additional Commissioner is appointed. Does this leave pipeline opponents with nowhere to turn?

Rover Moves to Condemn Land

Rover Pipeline has begun pursuing formal condemnation of land along the project's route in order to acquire the rights-of-way and easements necessary to begin construction and operate its pipeline. To date, Rover has initiated condemnation proceedings in federal court in Ohio, Michigan, West Virginia, and Pennsylvania to acquire the rights-of-way and easements. Condemnation  proceedings are common for interstate pipeline projects. Project developers have the right to acquire rights-of-way and easements from private landowners, but obtaining such rights-of-way and easements for government-owned or tribal property and property already dedicated to a public use, such as railroads, and existing utility corridors, is not so clear cut. Typically, early and effective strategic analysis and engagement with landowners along proposed routes minimizes the scope and complexity of legal challenges. Therefore, reducing costly and perhaps unreasonable compensation claims and mitigating the potential for eleventh hour project delays.


Why are condemnation proceedings in Rover critical? This week, ETP answered that question:


It is critical that Rover be able to provide the contractors with access to all affected properties along the route, including the Subject Easements sought to be obtained in the Verified Complaint, for pre-construction and construction work along the route of the Rover Project. Without immediate access to all easements along the route, placing the Rover Project in service by year end or sooner will be irreparably jeopardized and frustrated. Failure to gain immediate access to all easements along the route of the Rover Project will put Rover at significant risk of being unable to meet its contractual and regulatory deadlines and obligations.


In other statements, Rover calculated the financial exposure associated with its obligations to pay substantial standby fees and move around costs to its contractors if they are unable to complete tree clearing by March 31, 2017. So aside from the intense project deadlines, is there anything that makes Rover's condemnation proceedings unique? Yes: the voluminous number of landowner defendants (e.g., approximately 180 in just Michigan), which involve a variety of private landowners and property already dedicated to a public use, and no foreseeable ability for opponents to request a rehearing of the FERC's Certificate decision.


For the purposes of this Insights, we'll briefly focus on the latter. A party seeking to challenge the proposed route or any aspect of the FERC Certificate must file an application for rehearing within 30 days with the FERC, so that FERC's action on rehearing may be reviewed by the appropriate court of appeals. And an appeal must be filed within 60 days after FERC issues its decision on the application for rehearing. Notably, an appeal cannot be made without a rehearing at the FERC. Are project opponents, therefore, left without a means of judicial review? Perhaps. As a result, landowners may more aggressively pursue remedies during condemnation instead. More will be known in the next couple weeks.


So the question still stands: What will the FERC do in this unique time to provide for appeals of its existing decisions? Will they allow requests beyond their 30-day limit?


Looking to dive into these and other issues? On Thursday, February 16, we're holding a lunch session for customers.

Certificate Proceeding Cumulative Protestor Count- Individuals Excluded