January 30, 2020 / 8:19 PM / 2 months ago

U.S. FERC sides with PennEast natgas pipeline NJ eminent domain case

Jan 30 (Reuters) - The U.S. Federal Energy Regulatory Commission on Thursday supported the view of companies developing the $1 billion PennEast natural gas pipeline that they can use federal eminent domain to gain access to properties owned by New Jersey.

PennEast sought the FERC decision after the U.S. Court of Appeals for the Third Circuit ruled in September that the company could not use federal eminent domain to condemn land controlled by the state.

FERC in January 2018 approved PennEast's request to build the pipeline from Pennsylvania to New Jersey, and the company promptly sued in federal court under the U.S. Natural Gas Act to use the federal government's eminent domain power to gain access to properties along the route.

New Jersey opposed construction of the pipeline and did not consent to PennEast's condemnation suits on properties the state owns or in which it has an interest.

PennEast needs the land to build its 120-mile (190-km) pipeline, which is designed to deliver 1.1 billion cubic feet per day of gas from the Marcellus shale formation in Pennsylvania to customers in Pennsylvania and New Jersey.

One billion cubic feet is enough gas to supply about 5 million U.S. homes for one day.

PennEast has said it would take the case to the U.S. Supreme Court because the FERC decision alone cannot trump the Third Circuit decision.

"The Commission's order rejecting the court's interpretation strengthens PennEast's forthcoming petition to the U.S. Supreme Court," PennEast spokeswoman Patricia Kornick said in an email, noting the company planned to file its Supreme Court petition on March 4.

Officials at the New Jersey Department of Environmental Protection were not immediately available to comment. The NJDEP denied PennEast's permit applications in October, citing the Third Circuit's eminent domain decision.

With the court case pending, the company did not say when it expected to start construction of the pipeline.

The companies seeking to build PennEast include units of South Jersey Industries Inc, New Jersey Resources Corp (NJR), Southern Co, Enbridge Inc and UGI Corp.

Companies with contracts to use the project include units of NJR, SJI, Southern, Public Service Enterprise Group Inc and Consolidated Edison Inc.

PennEast is not the only gas pipeline facing state opposition in the U.S. Northeast. Two of Williams Cos Inc's proposed pipelines face state opposition, including Constitution in New York and Northeast Supply Enhancement in New Jersey.

Reporting by Scott DiSavino; Editing by Dan Grebler

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