Sierra Club v. FERC, No. 20-1427 (D.C. Cir. 2022)
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Petitioners, all environmental organizations, sought to vacate the Federal Energy and Regulatory Commission’s (“FERC” or the “Commission”) order giving the green light to Mountain Valley, LLC to construct a new pipeline. That pipeline, the “Southgate Project,” would extend Mountain Valley’s Mainline System Project, connecting its terminus in Virginia to facilities in North Carolina. Its “newness,” as an extension of the nonoperational Mainline System Project, is one of the prime subjects of dispute.
Petitioners also requested that the DC Circuit vacate the Commission’s denial of rehearing. Petitioners challenged the Commission’s Certificate Order and its denial of rehearing as arbitrary and capricious on two bases: the approved return on equity rate and the adequacy of the Commission’s Environmental Impact Statement.
The DC Circuit denied the petition finding that the Commission’s decisions on both scores were reasonable and supported by substantial evidence. The court wrote that Petitioners’ fear that the return on equity presents a market-skewing incentive is misplaced. The long-term agreement shows an actual need for the Project, not an attempt to overbuild purely for profit.
Further, Petitioners do not marshal compelling evidence to counter the Commission’s cumulative impacts analysis. The City of Roanoke briefing lists downstream sediment as a concern of the Mountain Valley pipeline but does not present any statistical evidence contradicting FERC’s conclusions. Further, the research Petitioners presented in their rehearing request, allegedly demonstrating that fine sediment can travel hundreds of miles and therefore will accumulate between the two Projects, is taken from an environmental product company’s website. These sources thus do not call into question the Commission’s analysis.
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