On Tuesday evening FERC issued a new policy that will stay the effectiveness of every certificate order for a minimum of 30 days and for 150 days for any major project.
Why does it matter?
The time period from the issuance of a certificate to the commencement of construction has, in the past, been one over which the pipelines had the most control, and was often very short. In addition, as we noted earlier this week inPipelines Take New Steps to Satisfy FERC Chairman - But Will it Be Enough?, the direction in which this Commission is heading is unclear and this decision just creates greater uncertainty.
What’s our view?
With this new policy, the Commission retains substantial control over the period following the issuance of the certificate. We expect the increase in the average length of this period to almost triple from slightly more than 90 days to more than 240 days. This will result in a substantial lengthening of project schedules and will only increase uncertainty during a period that used to signal a substantial degree of certainty. In addition, Commissioner Christie’s vote approving this policy may be an early indication that he is even more willing than Commissioner Chatterjee to accommodate the extreme views of his fellow commissioners, or it could be the sly vote of an incrementalist taking victories where he can. Finally, we believe this new policy, like the prior one, raises more issues than it resolves, and will likely be appealed and overturned by the courts.