November 2009 Vol. 236 No. 11


Florida Raises "Significant National Issue" In FERC Consideration Of FGT Project

The state of Florida is pressing the Federal Energy Regulatory Commission (FERC) to put conditions on its approval of Florida Gas Transmission Company, LLC’s (FGT) Phase VIII Expansion Project, arguing failure to protect a state’s authority with regard to constructing pipelines in highway rights of way would raise significant national issues. The FERC staff approved a final environmental impact statement (EIS) for the 483 mile project on Sept.18. The EIS now goes to the commission for approval. Ninety percent of the pipeline’s mileage would follow existing rights of way.

James Moriarty, a Washington attorney representing FGT, says the Florida Department of Transportation (FDOT) is trying to “rewrite over 50 years of commission and judicial precedent.” Moriarty claims that the FDOT maintains, without any legal proof, that FGT is required to comply with Florida state law and FDOT permit conditions.

At the heart of the issue is the FDOT contention that any final construction certificate granted by FERC to FGT should make it clear that a utility permit issued by a state such as Florida, and the conditions in such a permit, are not preempted by the Natural Gas Act. The particular issue with regard to the Florida utility permit is that it commits the pipeline company to relocate its pipelines when highway improvements, expansions or maintenance are required. FGT has said it intends to comply with that permit, but that it is not bound by conditions that are “inconsistent” with its NGA certificates, as they are preempted by federal law. It then classifies the utility relocation condition of the FDOT Utility Permits as one of those “preempted” conditions. John P. Barnett, director of external affairs for Southern Union, one of the two parent companies of FGT, declines to comment. Florida Gas Transmission is operated by Citrus Corp., which is a joint venture of Southern Union and El Paso Corp.

FGT announced the expansion project in January 2008. It went through the FERC pre filing process, and public meetings were held. The FDOT submitted their concerns late in the summer of 2009, leading FGT to complain that the objection was legally out of bounds because of its tardiness. FGT operates a 5,000 mile natural gas pipeline system extending from south Texas to south Florida with mainline capacity of 2.1 billion cubic feet per day. Pending regulatory approvals, FGT would anticipate a spring 2011 in service date for the expansion project.

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