Court denies Spire's bid to rehear $285 mln pipeline permit vacatur

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REUTERS/Charles Mostoller

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  • Court previously questioned FERC's rationale for market need
  • Pipeline president says St Louis residents will suffer heating shortages without the pipeline

(Reuters) - A federal appeals court on Tuesday denied a petition by U.S. natural gas company Spire Inc to reconsider a June ruling requiring the company to shut down its already-operating STL natural gas pipeline in Missouri.

Two panels of judges of the U.S. Circuit Court of Appeals for the D.C. Circuit rejected intervenor Spire's petition for a panel or full-court rehearing of the June 22 ruling that vacated authorizations for the roughly $285 million Spire STL Pipeline issued by the Federal Energy Regulatory Commission (FERC) in 2018.

Spire STL Pipeline president Scott Smith said in a statement: "Taking the STL Pipeline out of service will have significant implications for the health and safety, property and economic prosperity of the St. Louis region."

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Spire asked FERC in July for emergency authorization to keep the line operating to avoid gas outages for as many as 400,000 residents in St. Louis this winter. That application is under review, Spire spokesperson Jason Merrill said. Lawyers at firms Troutman Pepper Hamilton Sanders and Gibson Dunn & Crutcher represent the company.

"The Commission continues to consider the D.C. Circuit’s vacatur, and is reviewing today’s court order," FERC spokesperson Mary O'Driscoll said.

Natalie Karas, an in-house attorney with plaintiff the Environmental Defense Fund (EDF), said in a statement: "The court has appropriately rejected the request to revisit its initial decision."

"FERC has the authority and fact-finding tools to craft a remedy that fulfills the need for reliable service while safeguarding other public interests," she added.

In the June ruling, a unanimous panel of the D.C. Circuit threw out a critical permit order for the 65-mile Spire STL Pipeline. The ruling said FERC had adopted an "ostrich-like approach" when it found a market need for the line despite only one gas supplier, an affiliate of the line's operator, committing to use it.

St. Louis-based Spire asked the court in August to rehear the case, arguing that under D.C. Circuit precedent, it should have remanded FERC's certificate without vacating it. Sending back the certificate to FERC would have allowed FERC to "correct any errors in its reasoning," the company argued.

On Tuesday, the same panel of judges that issued the June ruling denied Spire's petition for a panel rehearing. Judges sitting on the panel are Senior U.S. Circuit Judge Harry Edwards as well as U.S. Circuit Judges David Tatel and Patricia Millett.

Spire's petition for a rehearing by the entire court was also denied.

FERC authorized the interstate pipeline in 2018. Construction began in 2019 after the commission delayed consideration of EDF's challenge of the certification and ultimately denied it.

Analysts at ClearView Energy Partners LLC said in a note on Tuesday that "we continue to think FERC is likely to allow Spire STL to continue to operate on a temporary/emergency basis, but potentially at neither its full current capacity nor rates this winter (and beyond)."

The line, designed to deliver up to 0.4 billion cubic feet of gas per day, began operating in November 2019.

The case is Environmental Defense Fund v. FERC, U.S. Circuit Court of Appeals for the D.C. Circuit, No. 20-1016.

For Environmental Defense Fund: Natalie Karas with Environmental Defense Fund and Matthew Bly, Kathleen Mazure and

Jason Gray of Duncan & Allen

For FERC: Anand Viswanathan with the Federal Energy Regulatory Commission

For intervenor for respondent Spire Missouri Inc: Christopher Barr of Post & Schell

For intervenor for respondent Spire STL Pipeline, LLC: Daniel Archuleta of Troutman Pepper Hamilton Sanders and Theodore Olson of Gibson, Dunn & Crutcher.

Read more:

FERC's rationale for pipeline cert weak, says D.C. Circuit

Spire could get more time to operate Missouri STL natgas pipeline -analysts

Spire seeks U.S. backing for Missouri natgas pipeline to avoid outages

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Thomson Reuters

New York-based correspondent covering environmental, climate and energy litigation.