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UPDATE 1-U.S. denies N.Y. rehearing request on Constitution natgas pipe permit

(Adds comment from NYDEC, paragraphs 2-4)

Dec 16 (Reuters) - U.S. energy regulators have denied New York’s request for a rehearing on its decision that state environmental regulators waived their authority to issue or deny water quality certification for Williams Cos Inc’s Constitution natural gas pipeline:

* The U.S. Federal Energy Regulatory Commission (FERC) last week reaffirmed its prior decision, which New York had challenged. FERC ruled the New York Department of Environmental Conservation (NYDEC), by taking more than a year to reach a decision, waived its authority under section 401 of the U.S. Clean Water Act.

* The NYDEC said it “‎disagrees with FERC’s decision that, once again, sides with the fossil fuel industry over protecting our environment.”

* “FERC’s actions in this case are consistent with the Trump administration’s ongoing and misguided efforts to dismantle states’ rights under the Clean Water Act,” the DEC said, noting it will “use all available legal means to overturn FERC’s decision and prevent the construction of this project.”

* Officials at Williams were not immediately available for comment.

* Analysts at Height Capital Markets, said “the project still has a long road ahead given New York’s resistance to fossil fuel infrastructure development.”

* Constitution and other gas pipelines in New York have been stuck in a nationwide battle between energy companies seeking more infrastructure and environmental groups and New York Governor Andrew Cuomo, who favor boosting investment in energy efficiency and renewables.

* Other gas pipes held up due to state opposition, including National Fuel Gas Co’s Northern Access from Pennsylvania to New York and Williams’ Northeast Supply Enhancement from Pennsylvania to New Jersey and New York.

* Constitution is designed to transport 0.65 billion cubic feet per day (bcfd) of gas 125 miles (201 kilometers) from the Marcellus shale in Pennsylvania to New York. In 2018, New York consumed about 3.7 bcfd of gas, up from 3.4 bcfd in 2017, according to federal energy data.

* FERC approved construction of Constitution in December 2014, but the project has been stalled primarily because of the battle over the state water permit.

* When Williams proposed Constitution in 2013, it estimated the project would cost about $683 million and enter service in 2016. Delays, however, have boosted that estimate to as high as $1 billion, according to local newspapers.

* Constitution is owned by subsidiaries of Williams, Cabot Oil & Gas Corp, Duke Energy Corp and AltaGas Ltd .

Reporting by Scott DiSavino; Editing by David Gregorio