ELI: FERC Should Acknowledge Climate Risk When Setting Pipeline Policy

July 26, 2018

In April, the Federal Energy Regulatory Commission (FERC) requested comments on its 20-year old policy that guides its decisions on permitting interstate natural gas infrastructure. The Electricity Law Initiative filed comments yesterday, arguing that accounting for the economic risks and environmental harms of greenhouse gas (GHG) emissions in a permitting proceeding is consistent with judicial precedent and Commission practice.

Federal law requires FERC to evaluate whether a proposed natural gas project is required by the “public convenience and necessity.” Rooted in century-old state public utility laws, this phrase has been understood by the Supreme Court to “connote a flexible balancing process” that considers “all factors bearing on the public interest.” The comment draws from FERC’s regulatory history to demonstrate that considering risks associated with GHG emissions fits within the scope of FERC’s understanding of its legal duties. Relevant risks include the potential for overbuilding due to shifts in demand. FERC must guard against the possibility that consumers will have to pay for unused or underutilized assets.

Read Ari Peskoe’s tweets on the FERC policy here and read the submitted comments here.

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