(Bloomberg) -- A U.S. appeals court ruled against New York’s bid to block a pipeline that will shuttle natural gas to a $900 million power plant under construction there, setting a potential precedent for other battles over gas conduits.
The court sided with federal energy regulators’ ruling that New York waived its right to act on the pipeline by failing make a decision on a key water permit within a year. It’s a decision that removes the last obstacle to Millennium Pipeline Co.’s Valley Lateral project, which has been in the works for about three years.
The ruling comes as developers clash with state governments and environmental groups over a profusion of pipeline conduits across the nation, many designed to carry gas from prolific shale wells to major markets. New York had previously denied a water certificate to Williams Cos.’ Constitution gas line, and New Jersey is urging federal regulators to rescind approval of the $1 billion PennEast project. The court’s decision may make it more difficult for states to block lines by withholding permits, according to ClearView Energy Partners LLC.
“This is about the state permit that New York has been trying to wield as a ‘veto,”’ said Christi Tezak, a managing director at ClearView in Washington. The court ruling “does provide certainty about what the timeline is. We don’t expect pipelines to go in super early, but we don’t expect to see states trying to manipulate the timeline.”
Millennium sees the court’s “precedent-setting decision” as affirming the Federal Energy Regulatory Commission’s interpretation of the Clean Water Act, which “will allow us to continue with construction,” spokeswoman Michelle Hook said in an email. “We note that FERC imposed numerous environmental conditions.”
The New York State Department of Environmental Conservation disagrees with the court decision and is reviewing its options “to determine any appropriate next steps regarding this pipeline project,” Erica Ringewald, a spokeswoman, said in an emailed statement.
The 7.8-mile (13-kilometer) Valley Lateral line will bring gas to Competitive Power Ventures Inc.’s CPV Valley Energy Center in Wawayanda, New York, about 70 miles northwest of Manhattan. Competitive Power Ventures is backed by private equity firm Global Infrastructure Partners, while Millennium’s owners include TransCanada Corp., DTE Energy Co. and National Grid Plc.
The case is: New York State Dept. of Environmental Conservation v. Federal Energy Regulatory Commission, 17-03770, U.S. Court of Appeals for the Second Circuit (Manhattan).
©2018 Bloomberg L.P.