Background
East Tennessee Natural Gas, LLC sought authorization from the Federal Energy Regulatory Commission to construct, upgrade, replace, and abandon pipeline facilities through its System Alignment Program. It also requested advance approval to roll the program’s costs into customer rates, subject to a later rate proceeding. East Tennessee Group, an association of affected natural-gas distributors, opposed the project and questioned its necessity, available alternatives, and proposed cost allocation.
FERC granted the certificate and abandonment authorization after reviewing the pipeline’s flow and capacity data, including nonpublic Critical Energy Infrastructure Information. The customer group later argued that FERC had acted before providing a requested annual system-flow diagram. FERC eventually disclosed the pipeline’s 2022 and 2023 annual flow data and repeatedly invited comments, but the group declined to address the data’s substance, asserting that disclosure had come too late. It then petitioned for review of FERC’s certificate, rehearing, and modified orders.
The Court’s Holding
The D.C. Circuit denied the consolidated petitions for review. It first held that the customer group had Article III standing and that the dispute was not moot because the challenged orders created potential monetary and procedural injuries that vacatur or remand could redress. But the Natural Gas Act’s rehearing requirement limited the court’s review to the procedural objections actually presented to FERC. The court therefore lacked statutory jurisdiction to consider the group’s newly raised challenges concerning contradictory evidence, another FERC proceeding, rolled-in rates, and FERC’s use of its certificate policy statement.
On the preserved claims, the court held that FERC’s delayed disclosure did not violate due process because the group received multiple opportunities to use the annual flow data and failed to demonstrate actual prejudice. It never explained what specific arguments earlier disclosure would have enabled, requested additional response time, or substantively addressed the data. The court also rejected the arbitrary-and-capricious and substantial-evidence challenges, concluding that FERC had assembled and considered extensive flow, capacity, and corroborating purchase data before approving the project.
Key Takeaways
- Natural Gas Act objections generally must be specifically raised in a rehearing application before the D.C. Circuit may review them.
- Delayed disclosure of protected infrastructure information does not establish a due-process violation without a meaningful showing of prejudice.
- A party that receives requested data but declines repeated opportunities to comment may struggle to show that the agency’s record or procedure was inadequate.
Why It Matters
The decision emphasizes that parties challenging FERC orders must preserve each objection with specificity and must explain concretely how an alleged procedural defect affected their participation. A late disclosure may support relief in some circumstances, but delay alone is insufficient when the agency offers later opportunities to respond and the challenger cannot identify resulting prejudice.
The ruling also reinforces FERC’s discretion in certificate proceedings when its decision rests on a developed evidentiary record, while leaving rate fairness disputes for the Natural Gas Act’s separate rate-setting process.