The FERC certificate and rehearing orders were before the court pursuant to a petition for review filed by the Environmental Defense Fund (“EDF”), a protestor of Spire STL’s application. Commissioner Glick again dissented, arguing that the certificate order represented “an unreasonable application of the. In November 2019, by a 2-1 vote, FERC denied requests for rehearing of the certificate order. Commissioner Glick (now Chairman) noted that, where the parties have raised considerable, credible concerns about whether a precedent agreement is a reliable indicator of need, reasoned decisionmaking requires the Commission to do more than simply reiterate its policy of accepting precedent agreements at face value. Both believed that the Commission should have looked beyond the precedent agreement in evaluating market need, given the affiliation of Spire STL and Spire Missouri. Then-Commissioners Cheryl LaFleur and Richard Glick dissented from the 2018 certificate order, finding that the record did not demonstrate a need for the Spire Project. Circuit’s 2014 decision in Minisink Residents for Envtl. According to the majority, Spire Missouri’s affiliation with Spire STL did not require the Commission to look behind the precedent agreement to evaluate project need, principally relying upon the D.C. The majority noted that, since the issuance of the Certificate Policy Statement, FERC has relied on precedent agreements for a substantial amount of a proposed project’s capacity as adequate evidence of need, even when the agreements are between affiliates, in the absence of anticompetitive or discriminatory behavior. The majority rejected protestors’ arguments that the precedent agreement was not a sufficient showing of need and that a market study must be undertaken. In FERC’s August 2018 order granting Spire STL’s certificate application, the 3-2 Commission majority found that Spire Missouri’s willingness to sign a binding contract to pay for pipeline service showed need or demand for the Spire Project. (“Spire Missouri”), an affiliate, for approximately 87.5 percent of the Spire Project’s capacity as evidence of need for the project. Spire STL principally relied on its precedent agreement with Spire Missouri Inc. Instead, the project sponsor claimed that pipeline would enhance reliability and access to new sources of natural gas supply, eliminating reliance on propane “peak-shaving” during periods of high demand. Louis metropolitan area where the pipeline’s delivery points would be located. In its 2017 certificate application for the Spire Project, Spire STL conceded that the pipeline was not being built to serve new natural gas demand in the St. The Certificate Policy Statement provides that projects intended to serve new demand might be approved on a lesser showing of need than those intended to serve markets already served by another pipeline however, in such instances, the evidence necessary to establish the need for the project will usually include a market study. While FERC’s 1999 Certificate Policy Statement provides that the Commission will consider all relevant factors in determining need when evaluating a proposed pipeline project, it also notes that precedent agreements ( i.e., binding service agreements with prospective shippers) will be important evidence of demand for a project.
Spire STL Certificate and Rehearing Order Circuit’s decision also comes as FERC considers revising its Certificate Policy Statement, including the framework for determining need for a proposed project, after receiving over 100 comment filings from interested stakeholders in response to FERC’s February 18 Notice of Inquiry on certificate policy. Thus, there is no clear precedent for how FERC may approach Spire STL’s application moving forward. Circuit vacating a FERC certificate order upon finding that FERC’s determination regarding the market need for the proposed pipeline was arbitrary and capricious, and was not supported by the Commission’s Certificate Policy Statement. The decision is a rare instance of the D.C. FERC vacating and remanding FERC’s order issuing a certificate of public convenience and necessity to Spire STL Pipeline LLC (“Spire STL”) under Section 7 of the Natural Gas Act. Circuit issued a decision in Environmental Defense Fund v.
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