FERC’s pipeline approval process is unconstitutional, says NJ Conservation

The first-of-its-kind legal challenge, filed with the US District Court in Trenton against FERC, asks the court to declare that:

• Under its current evaluation process, FERC’s approval process for pipelines violates the Fifth Amendment of the US Constitution for improperly taking land from private parties without a public use.
• FERC must consider environmental impacts before granting a pipeline company a Certificate of Public Convenience and Necessity, which allows the companies to exercise eminent domain.
• FERC cannot accept private ‘shipping’ contracts as proof of market demand or as proof that the consumers will not suffer economic harm.

“Our aim is to motivate FERC to amend its policies so the agency ceases its unconstitutional practice of granting certificates for pipelines that are not in the public interest. This will end the unjust seizing of public and private land,” said Susan J. Kraham, Senior Staff Attorney, Columbia Environmental Law Clinic.

The complaint notes that “pipeline parent companies can profit from deals with their […] subsidiaries, and transfer shipments from old pipelines to new pipelines without overall cost savings to consumers. Those parent companies are motivated by the availability of a 14% rate of return on investment that has been consistently awarded by FERC and described by the New Jersey Rate Counsel as ‘tantamount to winning the lottery’.”