New York loses appeal to block Millennium natgas pipeline

(Reuters) - A federal appeals court on Monday denied New York State’s petition to review orders from federal energy regulators that authorized Millennium Pipeline Co to build a natural gas line to a power plant in Orange County, New York.

The U.S. Federal Energy Regulatory Commission (FERC) determined the New York State Department of Environmental Conservation (NYDEC) waived its authority to provide a water quality certification under the Clean Water Act within one year, as required by statue.

“We certainly disagree with the decision, and are reviewing our options to determine any appropriate next steps regarding this pipeline project,” the NYDEC said in an email.

The case has potential ramifications for other pipelines seeking similar court orders to overturn New York water permit denials, including Williams Cos Inc’s proposed 0.65-bcfd Constitution and National Fuel Gas Co’s proposed 0.5-bcfd Northern Access pipelines between Pennsylvania and New York.

The 0.13-billion cubic feet per day (bcfd) pipeline will connect Competitive Power Ventures’ (CPV) 680-megawatt Valley Energy Center, which entered service in February using diesel as its fuel. CPV said it will switch to natural gas once it is available. Diesel was supposed to be a backup fuel.

The plant is one of several being built in New York that will help replace the generation that will no longer come from Entergy Inc’s 2,051-MW Indian Point facility once the two reactors there retire in 2020 and 2021.

Millennium filed with FERC to build the pipeline in November 2015. FERC approved construction in November 2016, pending receipt of other needed approvals like the NYDEC water quality certification.

The company also filed with the NYDEC for a water quality certification in November 2015. After twice telling Millennium the application was incomplete in December 2015 and June 2016, the NYDEC denied Millennium’s application in August 2017.

That was after Millennium filed with both a federal appeals court and FERC seeking a ruling that the NYDEC had waived its authority to decide on the water permit.

The appeals court said FERC would have to make that determination. FERC in September 2017 found that the NYDEC’s delay constituted a waiver of its authority.

After FERC denied the NYDEC’s request for a rehearing, the state appealed the decision to the U.S. Court of Appeals for the Second Circuit in New York, which denied the petition on Monday.

Millennium is owned by subsidiaries of TransCanada Corp, DTE Energy Co and National Grid Plc.

Reporting by Scott DiSavino; Editing by Bernadette Baum