Transco’s REAE Project: FERC Reinstates Certificate, Ensuring Continued Operation

On January 24, 2025, the Federal Energy Regulatory Commission (FERC or the Commission) issued an order on remand (the Order) reinstating a certificate of public convenience and necessity for Transcontinental Gas Pipe Line Company, LLC’s (Transco) for the pipeline company’s Regional Energy Access Expansion Project (REAE Project).¹ FERC’s original January 2023 order granting a certificate to the REAE Project was remanded and vacated by the U.S. Court of Appeals for the District of Columbia (D.C. Circuit) in a July 30, 2024 decision on grounds that the certificate order had violated the Natural Gas Act (NGA) and National Environmental Policy Act (NEPA). Despite the vacatur, the original certificate remained active while an en banc rehearing petition was pending with the D.C. Circuit, allowing Transco to operate the REAE Project. The Order’s timing will allow operation to continue following issuance of the court’s mandate on January 29, 2025, one week after the D.C. Circuit denied rehearing. Given the Order’s issuance, FERC also dismissed a temporary emergency certificate application that would have permitted continued operation as moot.

Procedural Background

Transco began full operation of the REAE Project on August 1, 2024. As an incremental project, it was backed by precedent agreements with a number of shippers, including certain New Jersey-regulated local distribution companies. State and non-governmental organizations in New Jersey challenged FERC’s initial finding of market need, and the D.C. Circuit agreed that it was suspect. The court’s order found that FERC failed to adequately consider competing studies about the state’s natural gas pipeline capacity, and in light of the New Jersey Clean Energy Act of 2018, which requires utilities to adopt energy efficiency and peak demand reduction programs, including for natural gas. The court also faulted FERC for failing to explain its decision not to make a significance determination regarding the project’s greenhouse gas emissions or discuss mitigation of greenhouse gas emissions during the certification process under NEPA given prior FERC decisions. Based on these findings, the court directed the Commission to revisit its balancing analysis under NGA section 7, which requires it to determine whether granting a certificate of authorization to a pipeline project is in the public interest.

The Order

The Order engages at length with the court’s finding that it had arbitrarily discredited studies showing that existing capacity would be sufficient to meet demand for natural gas in New Jersey after 2030, explaining that the studies were unreliable because they made erroneous and unsupported assumptions and failed to account for reliability concerns, particularly in times of heightened demand. It also disputes the court’s finding that it had arbitrarily discounted the effect of the New Jersey Clean Energy Act of 2018. The Order also explains that the Commission did not find evidence of any fully developed, utility-scale programs to reduce natural gas usage in New Jersey, or indeed, anything that would replace the stated need for firm transportation capacity to ensure reliable service at times of peak demand. The Commission also noted that the goal of reducing use of natural gas is not incompatible with the REAE Project, which is designed to diversify, enhance and secure access to natural gas and allow customers to lower their costs while improving reliability. The Commission concluded that Transco established a rebuttable presumption that the REAE Project was needed, and that no evidence in the record undermined its finding that New Jersey shippers needed the project to help meet their projected requirements, as demonstrated by the fact that the project’s capacity was fully subscribed.

The Commission also concluded that it had fulfilled its responsibilities under NEPA to consider reasonably foreseeable greenhouse gas emissions attributable to the project because it had conducted a robust qualitative analysis in connection with the environmental impact study (EIS) it had prepared as part of Transco’s application for certificate authority. The Commission noted that it was not required to make a binary significance determination when an EIS is prepared, as was the case for Transco, citing several instances of precedent within the D.C. Circuit to support its position. It also added that, regardless, it was impossible to make a binary significance determination because it was “unable to identify any accepted tool or method… that would allow us to determine what level of GHG emissions’ contribution to adverse climate change impacts is significant under NEPA.”² Finally, the Commission disputed the court’s finding that it had not adequately considered measures to mitigate greenhouse gas emissions, explaining that Transco had implemented and provided evidence of enough mitigation measures to ensure that, in the Commission’s view, the environmental consequences had been fairly evaluated as required by NEPA. Notably, the Order was issued concurrently with FERC’s decision to close the docket for its Interim Policy Statement on the Consideration of Greenhouse Gas Emissions in Natural Gas Infrastructure Project Reviews, which Akin discusses here.

Significance of the Decision

Prior to July 30, 2024, the D.C. Circuit had vacated and remanded a FERC NGA section 7 certificate order twice before.³ In both instances, the pipelines were able to continue operating, either under emergency certificate authority, or because FERC was able to issue a subsequent certificate order before the court’s mandate had issued to avoid service disruptions. Regardless, certificate vacatur, particularly for an operating pipeline, rippled across the industry out of concerns that the pipeline would need to disrupt service during the winter heating season. In the case of Transco, the REAE Project included upgrades that affected multiple system shippers, not just the New Jersey regulated utilities with precedent agreements. An inability to continue operating these facilities could have resulted in reduced access to gas supplies across the Mid-Atlantic region and the broader U.S. East Coast given Transco’s large footprint in the region. The decision was also an opportunity for the Commission to reassert its federal regulator role and primacy over state climate concerns with respect to pipeline infrastructure.

1 Transcontinental Gas Pipe Line Company, LLC, 190 FERC ¶ 61,048 (2025).

2 Id. at P 84.

3 Sierra Club v. Fed. Energy Regulatory Comm’n, 867 F.3d 1357 (D.C. Cir. 2017); Envtl. Def. Fund v. FERC, 2 F.4th 953 (D.C. Cir. 2021).