'Tis the Season for Connected Actions: Two FERC Projects Under the Same Corporate Tree

The DC Circuit's recent Rio Grande decision signals an increasingly expansive view of when projects must be analyzed together as "connected actions" under the National Environmental Policy Act (NEPA). As Kinder Morgan advances two pipeline projects through FERC's pre-filing process, the Commission's choice to analyze them separately or together could create litigation risk at the DC Circuit.

For project developers and traders, whether FERC analyzes these projects separately or together could significantly impact development timelines, permitting risk and, ultimately, market dynamics. Recent precedent increasingly favors comprehensive environmental review, making early assessment of "connected actions" crucial for project planning.

While the projects' distinct operational components support independent analysis, FERC may consider analyzing them together given their complementary nature, shared corporate ownership, and the DC Circuit's expanding view on connected actions.

The Connected Actions Framework

An agency impermissibly segments NEPA review when it divides connected federal actions into separate projects, failing to address their true scope and impact. The Council on Environmental Quality (CEQ) regulations define connected actions as those that automatically trigger other actions requiring review, cannot proceed without other actions, or are interdependent parts of a larger action.

In Rio Grande, the DC Circuit held that for projects to have substantial independent utility, both must be independently useful. The court rejected FERC's view that independent utility exists if just one project could proceed without the other. This arose in the context of analyzing whether an LNG terminal and its carbon capture facility were connected actions. The court found FERC improperly segmented its review because, while the terminal could operate without carbon capture, the capture facility could not exist without the terminal.

Two Projects, One Season

Kinder Morgan subsidiaries have initiated two projects in FERC's pre-filing process — the South System Expansion 4 Project (“SSE4”) and the Mississippi Crossing Project (“MSX”). The SSE4 project, proposed by Southern Natural Gas (SNG) and the Elba Express Company, aims to meet increasing market demand from residential, commercial, and industrial customers, as well as new gas-fired electric generation in the Southeast. The project would add 1.3 million dekatherms of capacity through fourteen pipeline loops totaling 279 miles along SNG's existing South Mainline in Mississippi, Alabama, and Georgia.

This expansion would enable firm transportation from receipt points near Rose Hill/Meridian and Hartwell, Georgia to delivery points throughout SNG's South System in Alabama, Georgia, and South Carolina, as well as the Elba Express Pipeline in Georgia. SNG has secured full capacity commitments from six shippers including Dominion Energy South Carolina, Oglethorpe Power, and Southern Company, targeting a November 2028 Phase I in-service date and November 2029 for Phase II.

The MSX Project, led by Tennessee Gas Pipeline, would transport 1.5 Bcf/day from TGP's 100 Line near Greenville, Mississippi to SNG's system near Rose Hill/Meridian and Transco's Station 85 near Butler, Alabama. The approximately 206 miles of greenfield pipeline would include interconnections with Texas Eastern Transmission and Texas Gas Transmission near Kosciusko, Mississippi. The project aims to address growing Southeastern energy demand, particularly for power generation, LNG facilities, and local distribution companies.

TGP's project would connect multiple supply basins to the SNG and Transco systems. Its open season resulted in over 2.0 Bcf/day of interest, including two anchor shippers, targeting a November 2028 in-service date.

As shown in the map below, both projects intersect at the Rose Hill/Meridian hub, effectively expanding Kinder Morgan's Southeastern market presence through complementary infrastructure additions.

Independent or Connected?

The projects appear functionally distinct in several key aspects. SSE4 expands existing infrastructure through loops and modifications, while MSX creates entirely new transportation paths through greenfield construction. Each project secured its own shipper commitments through separate open seasons, suggesting independent market support. The projects also serve different immediate purposes — SSE4 enhancing existing system capacity versus MSX creating new supply routes.

However, viewing these projects through the lens of the Rio Grande litigation raises questions about segmentation. Both projects form part of Kinder Morgan's Southeastern expansion strategy, with complementary capacity additions serving overlapping markets. Their intersection at Rose Hill/Meridian isn't merely coincidental - it enables system integration that enhances both projects' market reach.

The DC Circuit specifically warned against allowing "formally distinct projects” that are functionally “part of the same development" to escape consolidated review. If the Commission chose to analyze these projects separately, and if there was resulting litigation challenging this approach, the question would be whether they are part of the same development. The case for a carbon capture facility’s dependence on an LNG terminal is fairly clear. For similar logic to fit these projects, it would likely involve a clear demonstration that their full market potential relies on their interconnection. The analogy may be a bit of a stretch, but coinciding interconnecting projects under the same corporate umbrella makes it look like system integration, and worth watching.

What to Watch at FERC and the DC Circuit

As these projects progress through pre-filing, the Commission's environmental review scope could signal how it interprets the court's more expansive view of project connections. Further guidance may come from the pending Healthy Gulf v. FERC case, where the DC Circuit, with Judge Garcia (who wrote the Rio Grande opinion) again writing for the panel, considers another test of connected actions analysis. That case involves Line 200 and Line 300 pipelines, which would primarily supply the Woodside Louisiana LNG terminal (formerly Driftwood) while also serving demand growth in the supply-constrained Lake Charles region. The court's treatment of dual-purpose infrastructure could provide important precedent for projects like SSE4 and MSX that serve both focused and broader market needs.

Developers should prepare for broader environmental reviews due to the DC Circuit's view of connected actions. For SSE4 and MSX, combined analysis could impact timelines and compliance, though strong shipper commitments mitigate timing risks. FERC's approach may affect future expansions, especially when corporate families propose complementary infrastructure additions. The outcome in Healthy Gulf could further refine how such projects are analyzed.

If you would like to discuss strategies for navigating connected actions analysis in infrastructure development, please contact us.