Regulations Implementing the Energy Policy Act of 2005; Coordinating the Processing of Federal Authorizations for Applications Under Sections 3 and 7 of the Natural Gas Act and Maintaining a Complete Consolidated Record, 62912-62921 [E6-18025]

Agencies

• DEPARTMENT OF ENERGY
• Federal Energy Regulatory Commission

[Federal Register Volume 71, Number 208 (Friday, October 27, 2006)]
[Rules and Regulations]
[Pages 62912-62921]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-18025]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 153, 157, 375, and 385

[Docket No. RM06-1-000; Order No. 687]


Regulations Implementing the Energy Policy Act of 2005; 
Coordinating the Processing of Federal Authorizations for Applications 
Under Sections 3 and 7 of the Natural Gas Act and Maintaining a 
Complete Consolidated Record

October 19, 2006.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule.

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SUMMARY: Section 313 of the Energy Policy Act of 2005 (EPAct 2005) \1\ 
amends section 15 of the Natural Gas Act (NGA) \2\ to provide the 
Federal Energy Regulatory Commission (Commission) with additional 
authority to coordinate the processing of authorizations required under 
Federal law for proposed natural gas projects subject to NGA sections 3 
and 7 and to maintain a complete consolidated record of decisions with 
respect to such Federal authorizations. This Final Rule promulgates 
regulations governing its exercise of this authority whereby the 
Commission will establish a schedule for the completion of reviews of 
requests for authorizations necessary for a proposed project and 
compile a consolidated record to be used in the event of review of 
actions by the Commission and other agencies in responding to requests 
for authorizations necessary for a proposed project.
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    \1\ Pub. L. 109-58, 119 Stat. 594 (2005).
    \2\ 15 U.S.C. 717n (2005).

DATES: Effective Date: The rule will become effective December 26, 
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2006.

FOR FURTHER INFORMATION CONTACT: Gordon Wagner, Office of the General 
Counsel, Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426; gordon.wagner@ferc.gov; (202) 502-8947.
    Lonnie Lister, Office of Energy Projects, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426; 
lonnie.lister@ferc.gov; (202) 502-8587.
    William O. Blome, Office of the General Counsel, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC. 20426; 
(202) 502-8462.

SUPPLEMENTARY INFORMATION:
Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. 
Kelly, Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff

    1. On May 18, 2006, the Commission issued a Notice of Proposed 
Rulemaking (NOPR) in Docket No. RM06-1-000,\3\ requesting comments on 
proposed regulations to implement section 313 of the Energy Policy Act 
of 2005 (EPAct 2005).\4\ EPAct 2005 section 313 amends the Natural Gas 
Act (NGA) to provide the Commission with the authority (1) to set a 
schedule for Federal agencies, and state agencies acting under 
federally delegated authority, to reach a final decision on requests 
for Federal authorizations necessary for proposed NGA section 3 or 7 
gas projects and (2) to maintain a complete consolidated record of all 
decisions and actions by the Commission and other agencies with respect 
to such authorizations. In this Final Rule, the Commission considers 
comments submitted in response to the NOPR, and as a result, makes 
certain modifications to the proposed regulatory revisions.
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    \3\ 71 FR 30632 (May 30 2006); FERC Stats. & Regs. ] 32,601 
(2006); 115 FERC ] 61,203 (2006).
    \4\ Pub. L. 109-58, 119 Stat. 594 (2005).
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Background

    2. The Commission authorizes the construction and operation of 
proposed natural gas projects under NGA sections 3 and 7.\5\ However, 
the Commission does not have jurisdiction over every aspect of each 
natural gas project. Hence, for a natural gas project to go forward, in 
addition to Commission approval, several different agencies must 
typically reach favorable findings regarding other aspects of the 
project. To better coordinate the activities of separate agencies with 
varying responsibilities over proposed natural gas projects, EPAct 2005 
modified the Commission's role. Section 313 of EPAct 2005 directs the 
Commission (1) to establish a schedule for agencies to review requests 
for Federal authorizations required for a project \6\

[[Page 62913]]

and (2) to compile a record of each agency's decision, together with 
the record of the Commission's decision, to serve as a consolidated 
record for the purpose of appeal, including judicial review.
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    \5\ Under NGA section 7, the Commission has jurisdiction over 
the transportation or sale of natural gas in interstate commerce and 
the construction, acquisition, operation, and abandonment of 
facilities to transport natural gas in interstate commerce. Under 
NGA section 3(e), the Commission has exclusive authority to approve 
or deny an application for the siting, construction, expansion, or 
operation of a liquefied natural gas (LNG) terminal. The Secretary 
of the Department of Energy (DOE) has delegated to the Commission 
the authority under NGA section 3 to approve or disapprove 
applications for the siting, construction, and operation of 
facilities to import or export natural gas. The most recent 
delegation is in Delegation Order No. 00-004-00A, effective May 16, 
2006.
    \6\ EPAct 2005 section 313 describes ``Federal authorizations'' 
as decisions or actions by a Federal agency or official, ``or State 
administrative agency or officer acting under delegated Federal 
authority,'' granting or denying requests for permits, certificates, 
opinions, approvals, and other authorizations. The United States 
Environmental Protection Agency (EPA) asks what types of state 
actions would qualify as being under delegated Federal authority. 
The Commission finds that a state action qualifies as an action 
under delegated Federal authority if it is an action that (1) a 
State entity is permitted, approved, or directed to take under 
Federal law and (2) provides the basis for a reasoned decision on a 
request for a Federal authorization. The United States Department of 
Commerce, National Oceanic and Atmospheric Administration, National 
Marine Fisheries Service (NMFS) asks whether a Federal authorization 
would include recommendations or biological opinions issued 
subsequent to consultations under the Magnuson-Stevens Fishery 
Conservation and Management Act and Endangered Species Act (ESA). To 
the extent recommendations and opinions are necessary for a Federal 
agency, or state agency acting under federally delegated authority, 
to reach a decision on a request for a Federal authorization that is 
needed for a proposed NGA section 3 or 7 project to go forward, the 
Commission interprets EPAct 2005's mandate as encompassing such 
recommendations and opinions as ``Federal authorizations.''
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    3. On November 17, 2005, the Commission issued an order initially 
implementing the authority conferred by EPAct 2005 \7\ and delegating 
to the Director of OEP the authority to set schedules for agencies to 
act on requests for Federal authorizations necessary for natural gas 
projects to ensure such requests are processed expeditiously. In that 
order, the Commission stated a subsequent rulemaking would codify the 
pertinent provisions of EPAct 2005. To that end, the May 2006 NOPR set 
forth proposed regulatory revisions.
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    \7\ Coordinated Processing of NGA Section 3 and 7 Proceedings, 
113 FERC ] 61,170 (2005). This Final Rule codifies this delegation 
of authority by revising Sec.  375.308, Delegations to the Director 
of the Office of Energy Projects (OEP), to add a new Sec.  
375.308(bb), which delegates authority to the Director of OEP to 
establish schedules, consistent with Federal law, for agencies to 
complete their analysis and decision making processes and issue 
decisions on requests for Federal authorizations necessary for 
natural gas projects.
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    In this Final Rule, the Commission responds to comments concerning 
the NOPR, and adopts further regulatory revisions to implement its new 
responsibilities under EPAct 2005.

Notice and Comment

    4. Notice of the NOPR was published in the Federal Register on May 
30, 2006.\8\ Comments on the NOPR were filed by Baker Botts, L.L.P. 
(Baker Botts); Cheniere Energy, Inc. (Cheniere); City of Fall River, 
Massachusetts; Coastal States Organization; Conservation Law 
Foundation; Delaware Department of Natural Resources and Environmental 
Control, Division of Soil & Water Conservation (Delaware DNR); U. S. 
Department of the Army Corps of Engineers (Army COE); Dominion 
Transmission, Inc., Dominion Cove Point LNG, LP, and Dominion South 
Pipeline Company, LP (Dominion); Duke Energy Transmission, LLC (Duke); 
United States Environmental Protection Agency (EPA); Interstate Natural 
Gas Association of America (INGAA); United States Department of the 
Interior (Interior); Islander East Pipeline Company, L.L.C. (Islander 
East); Mr. Mark Mendelson; Massachusetts Office of the Attorney 
General; Massachusetts Executive Office of Environmental Affairs 
(Massachusetts EOEA); New Jersey Department of Environmental Protection 
(New Jersey DEP); Columbia Gas Transmission Corporation, Columbia Gulf 
Transmission Company, Crossroads Pipeline Company, Granite State Gas 
Transmission, Inc., and Central Kentucky Transmission Company 
(collectively NiSource); Oregon Coastal Management Program; United 
States Department of Commerce, National Oceanic and Atmospheric 
Administration, National Marine Fisheries Service (NMFS); and Williston 
Basin Interstate Pipeline Company (Williston).
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    \8\ 71 FR 30632 (May 30, 2006).
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Discussion

    5. The comments raise objections to various aspects of the proposed 
regulatory revisions. In response, various aspects of the NOPR's 
proposed revisions are modified, as discussed below.

Electronic Submission of Information

    6. There are several different events that trigger the obligation 
on the part of other agencies and officials to submit information to 
the Commission. In the NOPR, the Commission proposed all such 
information be submitted electronically, but requested that affected 
agencies and officials comment on whether electronic submission could 
prove impractical. Several agencies stated that they are not yet 
prepared to transmit information by electronic means. Consequently, to 
avoid any undue hardship, while stressing its preference to receive 
information via electronic means, the Commission removes the 
requirement to submit information by electronic means.

Coordinating Federal Authorizations

When to Submit Requests for Federal Authorizations

    7. Proposed Sec. Sec.  153.8 and 157.14 specify that an application 
filed with the Commission for a natural gas project under NGA section 3 
or 7 must include:

    A statement identifying each Federal authorization that the 
proposal will require; the Federal agency or officer, or State 
agency or officer acting pursuant to delegated Federal authority, 
which will issue each authorization; the date each request for 
authorization was submitted; and the date by which final action on 
each Federal authorization has been requested or is expected.

    The NOPR observed that if an application does not include this 
proposed new information statement, the Commission may deem the 
application incomplete.
    8. Several commenters explain that it is impractical, if not 
impossible, to submit applications for all Federal authorizations 
before or contemporaneously with the project application filed with the 
Commission. These commenters propose instead that a project sponsor be 
permitted to file an application with the Commission first; list the 
authorizations necessary for the new project; identify those 
authorizations for which applications have already been submitted and 
the dates upon which they were submitted; and then state the dates by 
which any outstanding authorization requests will be submitted.
    9. The Commission observes that most applications to construct 
major new gas projects are filed with the Commission after the project 
sponsor has participated in the Commission's prefiling process. This 
prefiling period affords a project sponsor, Commission staff, and staff 
from other agencies the opportunity to identify which Federal 
authorizations will be needed for a project, and ample time for the 
project sponsor to prepare requests for related Federal authorizations 
in advance of filing an application with the Commission.\9\ Thus, the 
prefiling process can establish coordination among the agencies 
responsible for reviewing a project proposal and diminish the chance 
that the Commission might find an application to be incomplete.
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    \9\ The NOPR noted that project sponsors that have made use of 
the prefiling period and process to prepare and submit requests for 
Federal authorizations to agencies before an NGA application is 
filed with the Commission have been able to compress the time needed 
to obtain Commission authorization. In large part, this is because 
completion of the Commission's assessment of an application often 
rests on other agencies reaching favorable determinations on 
separate authorization requests. Dominion and Duke are concerned 
that the new filing requirement might force a project sponsor to 
devote undue resources to preparing to submit requests for related 
Federal authorizations at the same time as an NGA application. The 
Commission believes the prefiling process can minimize the resources 
needed by a project sponsor by spacing out its submission of 
authorization requests over a period of several months.
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    10. The Commission nevertheless acknowledges that there may be 
circumstances that preclude a project sponsor from presenting all 
requests for necessary Federal authorizations by the time it files an 
application with the Commission.\10\ Therefore, Sec. Sec.  153.8 and

[[Page 62914]]

157.14 of the Commission's regulations will be modified to provide for 
a sponsor to explain why requests for Federal authorizations remain 
outstanding and state anticipated dates for submitting such requests. A 
project sponsor will now be required to state ``the date each request 
for authorization was submitted; why any request has not been submitted 
and the date submission is expected; and the date by which final action 
on each Federal authorization has been requested or is expected.'' For 
requests that remain outstanding at the time an application is filed, 
the Commission will review the reasons given, the projected dates of 
submission, and an applicant's interactions with the agencies. The 
Commission may then accept the application for consideration, and based 
on the state of documents and studies needed to support prospective 
authorization requests, accept the projected submission dates as a 
basis for establishing a schedule.
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    \10\ Cheniere, for example, posits that an agency may refuse to 
accept a request for a Federal authorization ``through no fault of 
the applicant.'' Were this to occur, the project sponsor should 
inform the Commission, which can then inquire as to the 
circumstances. NMFS points out that with respect to certain Federal 
authorizations, such as an affirmation of compliance with the 
Endangered Species Act or the National Historic Preservation Act, 
the project sponsor is not in a position to submit an authorization 
request, since a request to initiate consultation with the 
responsible agency must be submitted by the Commission. The 
Commission notes this does not relieve the project sponsor of its 
obligation, as described in Part 380 of the existing regulations, to 
develop and submit all necessary technical information. Baker Botts 
and INGAA call attention to difficulties that may be presented by 
compelling a project sponsor to file a permit under the Clean Air 
Act contemporaneously with an NGA section 3 or 7 application. Such 
difficulties should be alleviated by the modifications that this 
Final Rule makes to the filing requirements as proposed in the NOPR. 
Provided a project sponsor presents good cause for not submitting a 
particular authorization request by the time an application is 
submitted, the Commission stands ready to accept the application.
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Determining a Schedule for Federal Authorizations

    11. Initially, upon receiving an application, the Commission issues 
a notice ``within 10 days of filing,'' in accordance with Sec.  157.9 
of its regulations,\11\ or rejects the application in accordance with 
Sec.  157.8 of its regulations. In issuing a notice of an application, 
the Commission, or the Director of OEP acting pursuant to delegated 
authority, may also declare a schedule for final decisions on 
outstanding requests for Federal authorizations. When a schedule is 
established, it will comply with agencies' applicable schedules 
established by Federal law.\12\ The NOPR stated that in the event the 
Commission or the Director of OEP does not set a schedule for a 
particular project in the notice or at a later date, the default 
deadline for decisions by those agencies without applicable schedules 
established by Federal law will be no later than 90 days after the 
issuance of the Commission's final environmental document on the 
proposed project, or if no environmental document is issued, then no 
later than 90 days after issuance of a final order.
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    \11\ Section 157.9 is revised by this Final Rule to state that 
in calculating this deadline, only days during which the Commission 
is open for business are counted.
    \12\ In response to a query by NMFS, the Commission states it 
interprets the reference in EPAct 2005 section 313(c)(1)(B) to 
``Federal law'' to consist of schedules specified either in the 
United States Code or in the Code of Federal Regulations.
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    12. Commenters point out that if no schedule is included in the 
notice of an application, agencies are left to wonder whether a 
project-specific schedule will be issued at some later date, or whether 
silence indicates the default deadline applies. The Commission 
acknowledges the desirability of informing agencies in a timely manner 
of the schedule that will apply in each case. Accordingly, the 
Commission will adopt a different procedural approach, as described 
below.
    13. The NOPR proposed requiring that agency action on authorization 
requests be completed within 90 days of the issuance of the 
Commission's final environmental document in a proceeding, or if an 
environmental document were not prepared, then within 90 days of the 
issuance of a final Commission order. Previously, the Commission has 
not always issued its environmental assessment (EA) at the time of its 
completion. Going forward, the Commission commits to issue its final 
environmental document in every proceeding by placing it in the public 
record. In addition, going forward, the Commission commits to issuing a 
notice within 90 days of the notice of an application describing the 
schedule that will apply to the environmental review process conducted 
by the Commission to ensure compliance with the National Environmental 
Policy Act of 1969 (NEPA).\13\ This notice of the schedule for the 
environmental review will state, among other milestones, the 
anticipated date for the Commission's completion of its EA or final 
environmental impact statement (EIS).\14\ This NEPA notice will thus 
serve to inform agencies without a schedule established by Federal law 
of the projected date by which they are to reach a decision on 
requested authorizations, i.e., within 90 days after the anticipated 
issuance of the Commission's EA or final EIS. Section 157.9 is revised 
accordingly.
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    \13\ 42 U.S.C. 4321-4347 (2005).
    \14\ It has been the Commission's experience that in processing 
applications for certain minor and routine projects, the 
Commission's assessment, including its NEPA review, can often be 
completed within 90 days. For such projects, the Commission will 
either include a notice of the environmental schedule in conjunction 
with the notice of the application (i.e., the initial notice issued 
within 10 days of an application's being filed with the Commission), 
or will issue a separate notice of the environmental schedule 
shortly thereafter.
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    14. Under this approach, there is no longer any distinction--as was 
discussed in the NOPR--between a ``default'' and a ``project-specific'' 
schedule. For agencies without a schedule established by Federal law, 
the deadline for a final decision will follow from the date the 
Commission issues its final environmental document by placing it in the 
public record, with the anticipated issuance date stated in the NEPA 
notice. However, this anticipated issuance date is subject to change. 
As explained in the NOPR, during the course of considering an 
application or a request for a Federal authorization, unanticipated 
issues and circumstances can arise and affect the time needed to 
complete the review. The Commission will monitor such changed 
circumstances, and may find it appropriate to revise the milestones set 
out in its initial schedule for its environmental review.\15\ If the 
Commission does so, it will issue a notice updating the milestones 
associated with its environmental review process. Any revision that 
alters the date that the Commission anticipates issuing its EA or final 
EIS will correspondingly shift the projected 90-day deadline for 
agencies without a schedule established by Federal law to reach a final 
decision.
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    \15\ This flexibility should alleviate the concern of commenters 
such as the City of Fall River, Massachusetts, regarding situations 
where apparently straightforward issues are discovered during the 
course of analysis to be more complex and time-consuming than 
originally anticipated.
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    15. As described above, the Commission will now issue a notice 
describing the schedule for its environmental review as a part of, or 
within 90 days of, its initial notice of an application. Therefore, 
agencies will know, relatively early in the processing of all 
applications, where they stand with respect to due dates for their 
final decisions on requests for Federal authorizations.\16\
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    \16\ The New Jersey DEP recommends that each State agency 
reviewing a request for a Federal authorization be provided with 
formal notice of the date the Commission issues a final 
environmental document, arguing that ``[w]ithout formal notice . . . 
a State agency will not know that the 90-day review period for a 
decision has begun.'' New Jersey DEP's Comments at 1 (July 28, 
2006). In view of the Commission's commitment to issue a formal 
notice of the schedule for the environmental review, agencies should 
have adequate notice of the anticipated start date of the last 90 
days of the review period applicable to those agencies without a 
schedule set by Federal law. State and Federal agencies and officers 
are urged to make use of the Commission's eSubscription service as a 
means to monitor documents submitted in a proceeding, updates, and 
the date of issuance of the Commission's EA or final EIS.
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    16. Commenters expressed the concern that the Commission could 
reach a decision on a schedule for agency action without first 
considering

[[Page 62915]]

agency comments on authorization requests. As discussed below, 
agencies' reports on authorization requests will still be due within 30 
days of the receipt of such requests. In addition, it is expected that 
project sponsors will submit as many requests for necessary Federal 
authorizations as possible by the time an application is filed with the 
Commission. Therefore, in most cases the Commission will have 
approximately 60 days to consider agency comments in advance of issuing 
the notice of its schedule for the environmental review, enabling the 
Commission to review agencies' input in setting the milestones for the 
completion of the Commission's environmental review.\17\
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    \17\ As noted above, in minor and routine cases where issues 
that might complicate agencies' reviews are unlikely to arise, the 
Commission may issue notice of its environmental schedule in its 
initial notice of the filing of an application or shortly 
thereafter. However, if concerns regarding authorization requests 
are subsequently raised in agency reports to the Commission, the 
Commission would then reconsider the given time frames. In 
determining whether a proposal qualifies as minor and routine, and 
thereby suitable for processing on an accelerated schedule, EPA 
recommends the Commission first consult with the other agencies that 
will be involved. The Commission expects such projects to be readily 
identifiable or identified in the course of a prefiling 
consultation. The Commission will not identify a proposal as a 
candidate for accelerated processing unless it is confident of 
consensus among agencies that it merits such treatment. An agency 
may object to any schedule set by the Commission, and the Commission 
will reassess the grounds for its determination.
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    17. The Conservation Law Foundation requests doubling the 90 days 
following the issuance of the Commission's final environmental document 
to 180 days, whereas INGAA and interstate pipelines promote reducing 
the time to 30 days. The Conservation Law Foundation points out that a 
final decision on a request for a necessary Federal authorization may 
not be reached within 90 days of the issuance of the EA or EIS. The 
Commission acknowledges that although infrequent, this can occur. 
However, the Commission expects that project sponsors' increasing use 
of the Commission's prefiling consultation process, in conjunction with 
the regulatory revisions instituted herein, will eliminate such delayed 
authorization decisions.\18\ Further, the Commission believes that 
providing the 180 days requested would be incompatible with the EPAct 
2005 mandate to ``ensure expeditious completion'' of NGA section 3 and 
7 proceedings.\19\ On the other hand, the Commission finds no reason to 
adopt a 30-day requirement. Comments in favor advocate harmonizing the 
amount of time provided for agencies to act with the 30 days from 
issuance of a Commission order currently provided for filing a request 
for rehearing or accepting a certificate. The Commission sees no need 
to do so, as there is no evidence that project sponsors are currently 
hindered in reaching decisions on whether to seek rehearing of the 
Commission's orders or accept a certificate when other agencies take 
more than 30 days after an order to complete action on authorization 
requests. The Commission believes that the 90 days provided strikes an 
appropriate balance between providing adequate time for agencies' 
deliberation and avoiding delay to project sponsors.
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    \18\ The Commission notes that for the most part, instances in 
which final decisions on requests for necessary Federal 
authorizations have not been reached within the 90-day time frame 
designated herein, have involved authorizations for which a schedule 
for agency action is established by Federal law, e.g., a Coastal 
Zone Management Act (CZMA) consistency determination or a water 
quality certification under section 401 of the Clean Water Act 
(CWA). Nothing in this Final Rule will alter schedules set by 
Federal law.
    \19\ EPAct 2005 section 313(c)(1)(A) (2005).
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    18. The NOPR observed that:

    In some cases--for example, when there is a demonstrated need to 
have a new natural gas project in service by a certain date--the 
Commission may set deadlines that are shorter than the maximum times 
permitted under Federal law. In such cases, the Commission 
recognizes that compliance with its specified deadlines would be 
voluntary for agencies with deadlines determined by Federal law.\20\

    \20\ 71 FR 30632 at 30635 (May 30, 2006); FERC Stats. & Regs. ] 
32,601 at 32,558 (2006); 115 FERC ] 61,203 at P 17 (2006).
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    19. Several commenters contend this observation conflicts with 
Federal law. In setting a schedule for agencies to conclude their 
reviews of requests for Federal authorization, the Commission has no 
ability to contract or expand a schedule established by Federal law. 
Consequently, there can be no conflict between a schedule set by the 
Commission and a schedule set by Federal law.\21\ The Commission's 
observation in the NOPR was no more than an acknowledgment of current 
practice. Agencies frequently complete their review of certain project 
proposals--most often for modest and uncontroversial facilities--well 
in advance of deadlines allotted by Federal law. The NOPR stated the 
aspiration that agencies might continue to do so, recognizing that in 
exercising its new authority to set schedules, the Commission can only 
encourage agencies to act in advance of deadlines set by Federal law, 
it cannot compel them to do so.
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    \21\ Baker Botts raises a related issue in requesting 
clarification that an agency presented with an authorization request 
must not be permitted to await the outcome of another agency's 
action prior to commencing its own review. While such an approach 
might be viewed as contrary to EPAct 2005's expressed intent to 
expedite the review process for proposed gas projects, provided the 
agency in waiting is able to meet its deadline to reach a final 
decision--be it established by Federal law or by the Commission--
there would not necessarily be cause to seek to compel the 
recalcitrant agency to commence its review sooner.
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    20. The Army COE states that the deadlines established by the 
Commission for final agency action will be ``voluntary and non-
binding.'' \22\ This would be the case if, as discussed above, the 
schedule set by the Commission calling for a shorter time frame did not 
meet the EPAct 2005 requirement that it ``comply with applicable 
schedules established by Federal law.'' \23\ However, if an agency 
without a schedule established by Federal law fails to meet a deadline 
set by the Commission, this ``failure of the agency to take action * * 
* in accordance with the Commission schedule established pursuant to 
section 15(c) shall be considered inconsistent with Federal Law,'' and 
as a result, can be brought to the attention of the United States Court 
of Appeals, which can ``remand the proceeding to the agency to take 
appropriate action consistent with the order of the Court'' by the 
``schedule and deadline for the agency to act on remand'' that will be 
set by the court.\24\
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    \22\ Army COE's Comments at 3 (July 31, 2006).
    \23\ EPAct 2005 section 313(c)(1)(B) (2005).
    \24\ EPAct 2005 section 313(d)(2) and (3). Note this described 
civil action for the review of an agency's alleged failure to act on 
a requested authorization does not apply to CZMA determinations, 
since the Department of Commerce, not a Federal court, is the body 
to review a failure to act on, or the outcome of, a CZMA request. 
This section of EPAct 2005 was recently discussed and applied in 
Islander East Pipeline Co. LLC v. Connecticut Department of 
Environmental Protection, Docket No. 05-4139-ag (2d Cir. Oct. 5, 
2006); the court found a State agency acting under delegated Federal 
authority had not conducted a complete and reasoned review of a 
request for a Federal authorization, and required the state agency 
to either do so within 75 days or abdicate its delegated Federal 
authority.
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Informing the Commission Upon Receipt of an Authorization Request

    21. New Sec.  385.2013 specifies that within 30 days of receiving 
an authorization request, an agency must inform the Commission of: (1) 
Whether the agency deems the application to be ready for processing 
and, if not, what additional information or materials will be necessary 
to assess the merits of the request; (2) the time the agency will allot 
the applicant to provide the necessary additional information or 
materials; (3) what, if any, studies will be necessary in order to 
evaluate the request; (4) the anticipated effective date of the 
agency's decision; and (5) if

[[Page 62916]]

applicable, the schedule set forth by Federal law for the agency to 
act. Further, if an agency asks for additional information, the agency 
is to provide the Commission with a copy of its data request.\25\
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    \25\ This establishes the minimum information required of an 
agency. EPA, Duke, and Islander East suggest a more collaborative 
approach to establish a schedule. To this end, the Commission 
invites agencies to go beyond the requisite minimum and provide 
additional information, which the Commission will consider in 
exercising its scheduling responsibilities. Further, in determining 
a schedule appropriate to a particular application, Commission takes 
into account not only agencies' input but also the project sponsor's 
proposed construction schedule and in-service date.
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    22. Commenters claim that 30 days is an unreasonably short time to 
be able to render a meaningful assessment of an authorization request. 
The Commission recognizes that 30 days will often be insufficient for 
agencies to reach definitive conclusions on each of the stipulated 
aspects of an authorization request. But that is not the intent. 
Instead, the information submission is intended to give the Commission 
an overview to enable it to determine a realistic timetable for the 
environmental review process. The Commission recognizes that agencies' 
reports will necessarily be provisional and subject to change, and will 
take this into account both when first determining a schedule for its 
NEPA review, and thereafter, to take into account agencies' progress in 
processing authorization requests.
    23. For the purpose of measuring the time for an agency to act on 
an authorization request, in the NOPR the Commission explained the 
clock begins to run on the day a request is submitted to the agency. 
Interior questions whether this would be the day a request is sent or 
the day it is received; the Commission clarifies that the day the 
agency receives a request is the first day counted. This is unlikely to 
be the day an agency takes official notice that a complete application 
has been received and is ready for processing; rather, this will be the 
first day an agency is in receipt of a formal written request by a 
project sponsor for an authorization needed for a prospective NGA 
section 3 or 7 project.
    24. Commenters are concerned with the prospect that an agency might 
receive a cursory authorization request that could not be evaluated 
absent additional information. The NOPR stated that if an agency deems 
a request to be incomplete, and the project sponsor fails to provide 
the necessary information in time for the agency to reach a decision by 
the Commission's scheduled deadline, then the agency may deny the 
request.\26\ In turn, the Commission may deny the application before 
it, or authorization to commence construction, due to the project 
sponsor's failure to obtain a necessary Federal authorization. The 
Commission reiterates that whether an agency finds a request complete 
has no bearing on the agency's allotted response time. That said, the 
Commission does not expect to have to frequently reject NGA 
applications due to imperfections in requests for related Federal 
authorizations in view of the decision to revise the procedural 
schedule, as described above, to tie agencies' deadlines to issuance of 
the EA or final EIS. This approach to scheduling should give agencies 
and applicants adequate advance notice of when decisions on requests 
for Federal authorizations will be due, and motivate project sponsors 
to make all necessary information available in order for agencies to 
reach timely decisions on the merits.
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    \26\ This presumably would be the outcome with respect to an 
authorization required for a project if, as the Oregon Coastal 
Management Program and Coastal States Organization speculate, the 
agency is unable to obtain all the information needed to make an 
appropriate assessment of the proposal in time to meet the scheduled 
deadline for a final decision. Dominion requests that if an agency 
informs the Commission that a project sponsor has not adequately 
supported its request, then ``the Commission will give the applicant 
an opportunity to respond and cure the alleged deficiencies.'' 
Dominion's Comments at 11 (July 31, 2006). In the event of a 
disagreement regarding the adequacy of the contents of a request for 
a Federal authorization, the Commission may find reason to revise an 
agency's deadline for a final decision. However, although the 
Commission implores project sponsors and agencies to work 
cooperatively, it cannot compel them to do so. An agency retains the 
discretion to reject a request on the grounds that information 
necessary to reach a decision is lacking.
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    25. The Army COE asks if submitting an electronic copy to the 
Commission of the agency's response to a project sponsor's 
authorization request would satisfy the Sec.  385.2013 reporting 
requirement. It would, provided the submission contains the specified 
information; moreover, as discussed herein, submission to the 
Commission need not be by electronic means. Regardless of whether an 
agency's submission is made electronically or by paper copy, it should 
be filed in the PF or CP docket number, if available, assigned to the 
project sponsor's application to the Commission.

Procedural Clarifications

    26. Once an application is filed with the Commission and a schedule 
is established, if a project sponsor seeks to make a modification to 
its proposal that is material to one or more of its requested Federal 
authorizations, the project sponsor should file a description of the 
modification with the Commission--regardless of whether the Commission 
has approved the application or whether the modification would require 
amendment of the proposal before the Commission. NiSource requests the 
Commission clarify that a material modification would include a 
modification to an aspect of the proposal that would substantially 
change the overall environmental impacts. The Commission accepts this 
characterization. Following a project sponsor's notice to the 
Commission of a material modification, it will be within the discretion 
of the Director of OEP to determine whether the modification will make 
it impossible for an agency to reach a final decision on a request for 
a Federal authorization within 90 days of the issuance of the 
Commission's final environmental document.\27\ If so, pursuant to Sec.  
375.308, the Director of OEP may establish a revised, separate deadline 
for a final decision by that agency. Finally, a material modification 
to a project pending approval by the Commission may merit revising and 
re-noticing the schedule for the environmental review. The schedule for 
agencies to complete their reviews would then be adjusted in accordance 
with the revised schedule for completing the NEPA process.
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    \27\ As one such instance, the Army COE describes circumstances 
where a project sponsor made a material modification that impacted 
the authorization request under consideration by the Army COE after 
the Commission's final EIS was completed. Army COE Comments at 3 
(July 31, 2006). In such a case, the project sponsor should inform 
the Commission, and where appropriate, a revised, separate deadline 
will be established for the affected agency.
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    27. The New Jersey DEP suggests that in submitting a request for a 
necessary Federal authorization for an NGA section 3 or 7 project, the 
project sponsor identify the request as such. The Commission endorses 
this suggestion, and urges project sponsors to include the Commission's 
applicable PF or CP docket number, if available, in its authorization 
request. Identifying the proposed project in this manner, and informing 
the agency that the request is being submitted in conjunction with an 
application to the Commission, will alert the agency of the need to 
inform the Commission of its receipt of the request, pursuant to new 
Sec.  385.2013. Agencies, in turn, in submitting a report to the 
Commission on the status of a requested Federal authorization, should 
identify the party submitting the request, identify the proposed 
project, and include, if available, the applicable PF or CP docket 
number.

[[Page 62917]]

    28. The New Jersey DEP and Delaware DNR propose making the project 
sponsor, rather than the agency receiving a request for a Federal 
authorization, responsible for submitting to the Commission the 
agency's initial 30-day status report and any data requests. The 
Commission sees disadvantages in having the project sponsor assume this 
responsibility. In part, the aim of the 30-day report is to open, or 
extend, the dialogue between the agency and the Commission, since the 
Commission expects to confer with the responsible agencies over the 
course of the NEPA review process. Initial contact would not 
necessarily be established early were the project sponsor to act as an 
intermediary between agencies and the Commission. The burden on 
agencies to copy the Commission on a data request sent to a project 
sponsor is minimal; thus, the Commission finds that rather than having 
project sponsors receiving an agency's data request forward it on, it 
is better, in terms of timing and simplicity, to have the agency that 
generates the data request submit it directly to the Commission.
    29. NMFS suggests the Commission serve as a central point of 
contact linking project sponsors to agencies. The Commission sees no 
benefit to placing itself between the company seeking to develop a new 
project and the agencies responsible for examining aspects of the 
proposal. As is, Commission staff maintains communication with the 
project sponsor and agencies from the receipt of a request to make use 
of the prefiling process through issuance of the final decision.
    30. The Commission declares, in response to questions raised by 
INGAA and Islander East, that the procedures described herein do not 
apply to activities that do not involve ``an application for 
authorization under section 3 or a certificate of public convenience 
and necessity under section 7.'' \28\ For example, auxiliary 
installations and the replacement of facilities under Sec.  2.55, and 
activities authorized under the blanket certificate provisions of Part 
157, subpart F, of the Commission's regulations, and certain activities 
undertaken in response to a gas emergency, do not require authorization 
under NGA section 3 or issuance of a certificate under NGA section 7.
---------------------------------------------------------------------------

    \28\ EPAct 2005 section 313(a)(3) (2005).
---------------------------------------------------------------------------

    31. When a request to authorize a proposed project under the 
blanket certificate provisions is protested, and the protest is not 
either dismissed or resolved and withdrawn, the ``request filed by the 
certificate holder shall be treated as an application for section 7 
authorization for the particular activity.'' \29\ However, although a 
protested blanket project proposal is treated as an application for a 
case-specific certificate, once the merits of the issues raised in the 
protest are addressed, and provided the proposal is not denied, the 
project is authorized under the project sponsor's existing blanket 
certificate.\30\ A project sponsor that makes a prior notice filing for 
a proposed project to be constructed under blanket certificate 
authority is acting under the authority of its existing blanket 
certificate issued pursuant to NGA section 7(c). Consequently, to 
undertake projects that comply with the blanket certificates 
provisions, the project sponsor does not need to obtain an additional, 
separate NGA section 7(c) certificate. Therefore, the new regulatory 
requirements promulgated herein pursuant to EPAct 2005 will not apply 
to projects authorized pursuant to the blanket certificate program.
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    \29\ 18 CFR 157.205(f) (2006).
    \30\ See, e.g., Texas Eastern Transmission Corp., 76 FERC ] 
61,178 (1996).
---------------------------------------------------------------------------

    32. The City of Fall River, Massachusetts, the Massachusetts EOEA, 
and the Massachusetts Attorney General seek clarification on how the 
Federal NEPA review and the environmental review undertaken by a State 
or the District of Columbia may interact. The different environmental 
reviews proceed on separate jurisdictional tracks, each on its own 
schedule and each arriving at its own independent findings. However, as 
a practical matter, if Federal and State agencies are able to work in 
tandem, the result can be greater efficiencies for all concerned. 
Accordingly, where possible, the Commission coordinates its efforts 
with State agencies when assessing the environmental impacts of a 
proposed project and intends to continue to do so going forward.
    33. Islander East seeks clarification on how the revised 
regulations will apply to pending projects. The Commission, as a 
general matter, will not apply the Sec. Sec.  153.8 and 157.14 filing 
requirements for project sponsors, or the Sec.  385.2013 reporting 
requirements for agencies, to applications filed prior to the effective 
date of this rule. That said, as noted above, the Director of OEP 
currently has delegated authority to establish schedules in pending 
proceedings,\31\ and if there is cause to do so, the Director of OEP 
may establish a schedule applicable to an ongoing proceeding.
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    \31\ See note 7.
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    34. Mr. Mark Mendelson is concerned that the Commission is creating 
a ``standardized'' schedule that will not allow for an adequate 
assessment of safety risks and long-term project impacts of proposed 
gas projects on individuals and communities. Mr. Mendelson expresses 
general dissatisfaction regarding the content, timing, and availability 
of information concerning proposed projects. He contends that affected 
individuals do not always receive adequate notice of proposed projects 
and suggests all potential stakeholders be notified by mail via the 
United States Postal Service of potential hazards or risks in their 
general locale posed by a proposed project.
    35. The Commission's new reporting requirements and commitment to 
issue a notice of the environmental review schedule should serve to 
inform potentially interested persons of a pending project proposal. 
The Commission expects that its authority to establish schedules will 
lead to tailoring milestones appropriate to the particularities of 
proposed projects, and not to a one-size-fits-all standard. Mr. 
Mendelson's proposal to review and revise the existing public notice 
requirements is beyond the scope of and is not germane to the matters 
being addressed in this rulemaking proceeding. However, any affected 
landowner that does not receive notice of a proposed project in a 
docketed proceeding as specified in the Commission's regulations, or 
any individual that suspects the public notice provided is procedurally 
insufficient or substantively incomplete, can bring such concerns to 
the Commission's attention and the specific circumstances will be 
investigated.

Consolidated Record

    36. Section 313 of EPAct 2005 directs the Commission to ``maintain 
a complete consolidated record of all decisions made or actions taken 
by the Commission or by a Federal administrative agency or officer (or 
State administrative agency or officer acting under delegated Federal 
authority) with respect to any Federal authorization.''
    37. The NOPR proposed to require agencies and officers issuing 
decisions or approvals necessary for proposed projects under NGA 
sections 3 and 7 to provide the Commission with a copy of the final 
decision reached or action taken, or a summary thereof, within three 
days of issuance of a final decision or action. The Commission proposed 
requiring agencies and officers to file an

[[Page 62918]]

index of the record, identifying all documents and materials--including 
pleadings, comments, evidence, exhibits, transcripts of testimony, 
project alternatives (including alternative routings), studies, and 
maps--relevant to the decision, within three days of issuance of a 
final decision or action.
    38. Commenters object to the proposed requirement that a copy of 
the decision and an index to the record be filed within three days of 
the decision and suggest that the Commission allow 30 days for the 
filing of the decision and record index. In addition to promoting a 30-
day interval, the Conservation Law Foundation recommends the Commission 
reimburse agencies for reasonable costs incurred in providing the 
index.
    39. The Commission accepts the claim that three days may not 
provide every agency with adequate time to organize and send the 
requested information--although, if an agency maintains and updates its 
index throughout the course of its proceeding, all it need do when a 
decision is issued is add the decision, or a summary thereof, to the 
index and submit it to the Commission. The Commission anticipated 
agencies' submission of the requested information would be merely 
ministerial, i.e., that the information would be available and 
electronically transmittable--or at least, easily duplicated and then 
sent--on the same day a final decision was reached. Commenters 
persuasively argue that this is not the case. In any event, the 
Commission does not believe that it is necessary to receive an agency's 
information within three days of a final decision in order to satisfy 
the EPAct 2005 mandate to maintain a complete consolidated record. 
Accordingly, the Final Rule revises the reporting requirement to 
provide agencies and officers 30 days, not three, to submit a final 
decision, or summary thereof, and index to the Commission. Further, 
while the Commission encourages electronic submissions, the proposed 
regulations are modified to provide the option to make paper filings 
with the Commission.\32\ In view of this modification to the means of 
filing, the Commission will modify the time provided for agencies to 
file a copy of data requests with the Commission, extending it from 
three days to 10 business days.
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    \32\ As is currently the case, agencies will be expected to 
conform their filings to the requirements of 18 CFR 385.2003, to the 
extent that they are able.
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    40. The Commission finds no cause to adopt the Conservation Law 
Foundation's request to provide reimbursement to agencies for expenses 
related to compliance with the provisions of this rule. Compliance is 
mandatory pursuant to the authority provided to the Commission by EPAct 
2005. Further, in view of the revision above regarding the time 
permitted and means of submission, and the clarification below 
regarding the contents of the index, the Commission expects the 
additional cost incurred by agencies to meet these new reporting 
requirements will not be unduly burdensome.
    41. Commenters' objections to submitting an index appear to stem in 
part from an overly broad interpretation of what this index must 
include. The Commission clarifies that the index need not summarize the 
contents of each item in the agency's record; rather, the index can be 
any method of notation capable of identifying each item in the record 
sufficiently to allow a reviewing body to select items of relevance to 
an issue on appeal. The Oregon Coastal Management Program observes that 
it typically relies on and references the outcome of multiple state and 
local actions, but does not include in its record the underlying 
documents that make up the record in those other actions. There is no 
need for agencies that follow such an approach to make any adjustment. 
Any methodology and recordkeeping that an agency now employs that is 
sufficient to serve as the basis for appeals or reviews is an 
acceptable ``index'' for the purposes of the consolidated record. Note 
that in filing an index, agencies should title the submission 
``Consolidated Record'' and include a prominent reference on the first 
page to the docket number applied to the Commission proceeding which 
gave rise to the request for agency authorization.
    42. Baker Botts requests the Commission require that agencies 
provide the Commission with their full record, and not just an index 
thereto. The Commission finds no cause to require agencies to reproduce 
and transmit the contents of their entire record to the Commission. 
Only in the event of appeal will there be any call to view the original 
or duplicate materials, and even then it is unlikely anything other 
than a limited subset of the record will be relevant. Therefore, 
provided an index is prepared, and original materials are retained and 
available for a minimum of three years, or until an appeal or review is 
concluded, there should be no delay in producing the portion of an 
agency's record requested by a reviewing entity.
    43. The Army COE points out that when it issues a requested permit, 
the permit with terms and conditions is sent to the applicant, which 
has 60 days to appeal the terms and conditions if it chooses to do so; 
if the permit is denied, the applicant may appeal the denial. The Army 
COE asks that the date of final agency action for purposes of providing 
the record to the Commission be ``at the end of any appeals process.''
    44. The Commission expects that individual agencies' own 
regulations will determine when their actions are considered ``final'' 
and thereby start the 30-day clock for filing their decisions and 
indices with the Commission. However, the Commission will consider a 
decision or action on a request for a Federal authorization to be 
``final,'' and consequently subject to the 30-day deadline for filing 
with the Commission, if the project sponsor submitting the request can 
rely on an affirmative determination as sufficient authority to 
proceed. In other words, the agency's deliberation must go beyond 
verification that a request is complete, or a preliminary 
determination, or an agency decision that approves a project sponsor's 
application but makes its right to proceed contingent on the outcome of 
certain agency review or appeal processes; i.e., the outcome of the 
agency's final decision or action must grant, condition, or deny the 
applicant's requested authorization. At this point, the 30-day period 
begins for an agency to provide the Commission with a copy of its 
decision, or a summary, and an index to its record in the proceeding. 
The 30-day period should permit the Commission to receive agencies' 
decisions and indices in time to compile a complete consolidated record 
for the purposes of judicial review (or in the case of a CZMA 
determination, review by the Department of Commerce).\33\
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    \33\ The Commission notes that when it issues an order granting 
a project sponsor a section 7 certificate or section 3 authorization 
under the NGA to construct gas facilities, clearance to commence 
construction generally is withheld until the project sponsor has 
obtained other necessary authorizations from other agencies. 
However, once such authorizations have been obtained by the project 
sponsor, the project sponsor generally is granted clearance to 
commence construction, notwithstanding any pending requests for 
rehearing.
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    45. The Army COE asserts the Commission should forward Freedom of 
Information Act (FOIA) requests to agencies, instead of preparing a 
response using the consolidated record. The Commission clarifies that 
FOIA requests should be submitted directly to the agency responsible 
for generating the information in question. While an agency's index 
filed with the

[[Page 62919]]

Commission may be useful in identifying records relevant to a FOIA 
request, the Commission will not be capable of effectively responding 
to FOIA requests, or other types of requests, that concern the 
substantive matters of another agency's proceeding. Further, the 
Commission's responsibilities under EPAct 2005 do not include compiling 
documents to respond to FOIA requests. The Commission does not expect 
to receive or respond to FOIA requests, unless the information sought 
is part of the Commission's own record of its deliberations in a 
particular proceeding.

Information Collection Statement

    46. The Office of Management and Budget (OMB) regulations require 
that OMB approve certain reporting, record keeping, and public 
disclosure (collections of information) requirements imposed by agency 
rules.\34\ Pursuant to OMB regulations, the Commission is submitting 
these reporting requirements to OMB for its review and approval under 
section 3507(d) of the Paperwork Reduction Act of 1995 (PRA).\35\ Upon 
approval of a collection of information, OMB will assign an OMB control 
number and an expiration date. Respondents subject to the filing 
requirements of this rule will not be penalized for failing to respond 
to these collections of information unless the collections of 
information display a valid OMB control number. The information 
collection requirements in this Final Rule are: FERC-539, FERC-537, 
FERC-606, and FERC-607. These are mandatory reporting requirements.
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    \34\ 5 CFR 1320.11 (2006).
    \35\ 44 U.S.C. 3507(d) (2005).
---------------------------------------------------------------------------

Public Reporting Burden

    47. The Commission did not receive specific comments concerning its 
burden estimates and uses the same estimates here in the Final Rule. 
Several commenters expressed concern with the burden that would be 
imposed if information was required to be submitted under the initially 
proposed time frame. However, as discussed herein, the Commission has 
taken these comments into consideration and extended the time frame for 
submitting information.

----------------------------------------------------------------------------------------------------------------
                                                     Number of       Number of       Hours per
                 Data collection                    respondents      responses       response       Total hours
----------------------------------------------------------------------------------------------------------------
FERC-537........................................              76             815             0.5             408
FERC-539........................................              12              12             0.5               6
FERC-606........................................              48            1702             4.4           7,489
FERC-607........................................              48            1654             6.3          10,423
                                                 ---------------------------------------------------------------
    Totals......................................  ..............  ..............  ..............          18,326
----------------------------------------------------------------------------------------------------------------

    Total Annual Hours for Collection: 18,326.
    Information Collection Costs: Because of the regional differences 
and the various staffing levels that will be involved in preparing the 
documentation (legal, technical, and support), the Commission is using 
an hourly rate of $150 to estimate the costs for filing and other 
administrative processes (reviewing instructions, searching data 
sources, completing and transmitting the collection of information). 
The estimated cost is $2,748,900.
    Title: FERC-539 ``Gas Pipeline Certificates: Import/Export 
Related;'' FERC-537 ``Gas Pipeline Certificates: Construction, 
Acquisition and Abandonment;'' FERC-606 ``Gas Pipeline Certificates: 
Notification of Request for Federal Authorization;'' and FERC-607 
``Report on Decision or Action on Request for Federal Authorization.''
    Action: Data Collection.
    OMB Control No.: FERC-539 (1902-0062); FERC-537 (1902-0060); FERC-
606 and FERC-607 (To be determined).
    Respondents: Natural gas pipeline companies and state agencies and 
officers.
    Frequency of Responses: On occasion.
    Necessity of Information: EPAct 2005 section 313 directs the 
Commission to (1) establish schedules for State and Federal agencies 
and officers to act on requests for Federal authorizations required for 
natural gas projects under sections 3 and 7 of the NGA and (2) maintain 
a complete consolidated record of all decisions or actions taken by the 
Commission and other agencies and officers with respect to such 
authorizations. The Commission considers the regulatory provisions 
adopted herein to be the minimum necessary for the Commission to 
implement the new authority provided by EPAct 2005.
    48. For information regarding the requirements of the collections 
of information and the associated burden estimates, including 
suggestions for reducing this burden, please send comments to the 
Federal Energy Regulatory Commission, 888 First Street, NE., 
Washington, DC 20426 (Attention: Michael Miller, Office of the 
Executive Director), or send e-mail to michael.miller@ferc.gov), or to 
the Office of Management and Budget (Attention: Desk Officer for the 
Federal Energy Regulatory Commission), by fax to (202) 395-72