[00:00:00] Speaker 00: Case number 23-1333, El Puente de Williamsburg, Inc. [00:00:05] Speaker 00: and Lacey Latino de Accion Climatica et al. [00:00:08] Speaker 00: Petitioners versus Federal Energy Regulatory Commission. [00:00:12] Speaker 00: Mr. Chagnon for the petitioners, Mr. Schanger for the respondent, Mr. Marwell for the intervener. [00:00:19] Speaker 05: Good morning, whenever you're ready. [00:00:22] Speaker 02: Good morning, your honors, and may it please the court. [00:00:25] Speaker 02: Ben Chagnon on behalf of the Community Organization Petitioners. [00:00:28] Speaker 02: I'd like to reserve three minutes for rebuttal. [00:00:31] Speaker 02: Petitioners are here today because just over 20 months ago, NFE asked FERC to disregard the core requirements of the Natural Gas Act in NEPA when it sought, quote, emergency approval to build and operate a 220-foot pipeline that expanded its still unauthorized terminal. [00:00:47] Speaker 02: Congress intended that before FERC authorized any construction or operation of a jurisdictional pipeline, first must look before it leaps, conducting the statutorily required environmental and public interest review. [00:00:59] Speaker 02: But here, FERC allowed NFE to go forward without that, accepting NFE's proposal to build first and conduct comprehensive review later. [00:01:06] Speaker 02: Congress did not authorize FERC to grant that kind of interim approval, and the score should set its orders aside. [00:01:12] Speaker 02: But I'd like to focus my time this morning on FERC's efforts to shield its unlawful orders from judicial review. [00:01:17] Speaker 02: I'll start with FERC's heckler argument and then turn to its finality argument. [00:01:21] Speaker 02: There are two independent ways to resolve the heckler argument in our favor. [00:01:24] Speaker 02: First, [00:01:25] Speaker 02: The court should not read FERC's order to contain any act of enforcement discretion. [00:01:29] Speaker 02: And second, even if it does, this court can and should say that FERC exceeded the discretion Congress gave it under the Natural Gas Act. [00:01:38] Speaker 02: I'll start with the argument that FERC's order should not be read to encompass any enforcement discretion. [00:01:44] Speaker 02: That's clear from the text of the order itself. [00:01:47] Speaker 02: It describes what NGE asked for as temporary authority to operate, and it ultimately allows the immediate construction and operation of the proposed facilities. [00:01:57] Speaker 02: It's clear that it's intending to approve the construction of the pipeline, because when it talks about what it will do going forward, it's only going to look again at the question of whether continued operation is OK. [00:02:09] Speaker 02: That's all at JA 114 and 115. [00:02:11] Speaker 02: So on JA 114 and the [00:02:15] Speaker 04: The one paragraph of explanation. [00:02:18] Speaker 04: It also says we will not take action to prevent the immediate construction and operation. [00:02:24] Speaker 04: The proposed facilities. [00:02:28] Speaker 04: What action are you saying they should have taken instead? [00:02:32] Speaker 02: Certainly, Your Honor. [00:02:33] Speaker 02: What we're saying they should have taken instead is to not have that sentence. [00:02:37] Speaker 02: It should say, we can't approve this right now. [00:02:40] Speaker 02: We're going to review it as we require to under the Natural Gas Act and NEPA. [00:02:45] Speaker 02: But in the interim, you are not allowed to operate the pipeline. [00:02:50] Speaker 04: And that's the way they would effectuate that would be to seek an injunction, right? [00:02:55] Speaker 02: They wouldn't need to seek an injunction. [00:02:57] Speaker 02: The context in which this comes up is NFE had not started building and operating the pipeline. [00:03:01] Speaker 02: They come to FERC with an application. [00:03:04] Speaker 02: This is on July 18th. [00:03:06] Speaker 02: And that says, we recognize that for the facility itself, you've given us temporary authorization. [00:03:13] Speaker 02: We'd like the same treatment for the pipeline. [00:03:15] Speaker 02: So in that context where NFE comes to FERC and says we'd like temporary authorization, what we'd expect FERC to do is approve or deny a request for temporary authorization. [00:03:25] Speaker 02: It has it both ways. [00:03:27] Speaker 02: FERC says we don't have authority to do this, but we're effectively going to give you temporary authorization anyway. [00:03:32] Speaker 04: Just one clarifying question. [00:03:34] Speaker 04: You said they granted temporary authorization for the terminal. [00:03:37] Speaker 04: That's right. [00:03:38] Speaker 04: Wouldn't they not have authority to do that since there's no temporary authorization authority in section three? [00:03:43] Speaker 04: I read the show cause order to say what this one did, which is we're not going to take action to stop you in the meantime. [00:03:52] Speaker 02: That's correct, Your Honor. [00:03:53] Speaker 02: The position we're taking here would also apply to the terminal. [00:03:56] Speaker 02: The reason that didn't come to this court is no one challenged that aspect of the show cause order. [00:04:01] Speaker 02: But I agree with you that the Natural Gas Act contains no authority to offer temporary authorization of a Section 3 project. [00:04:10] Speaker 02: That's in contrast to under Section 7. [00:04:13] Speaker 02: So you have 717 FC1B, which does have temporary emergency approval. [00:04:20] Speaker 02: FERC could not authorize that here. [00:04:22] Speaker 02: And that contrast with what's in Section 3 goes to show that FERC simply didn't have the authority to do it. [00:04:26] Speaker 05: Okay, so then if that's the legal backdrop, and FERC says we are not yet ready to authorize, give you the certificate, [00:04:41] Speaker 05: There's no authorization. [00:04:44] Speaker 05: And then they say, but we're not going to do anything about it. [00:04:48] Speaker 05: What could that be other than enforcement discretion? [00:04:53] Speaker 02: So in the context of resolving an application, we think it's strange to read the order as invoking enforcement discretion. [00:05:00] Speaker 02: In all of the cases FERC and NFE cite in their briefs, those are contexts where FERC is expressly asked to enforce against someone, and then it declines to exercise enforcement discretion. [00:05:10] Speaker 02: In this context, all FERC is going to be asked, and that's under 717-BE, is to adjudicate an application. [00:05:19] Speaker 02: And under this court's case in Burlington, there's a clear distinction between when FERC acts as an adjudicator and a prosecutor. [00:05:26] Speaker 02: And so the key reason not to read the order to invoke enforcement discretion is that FERC was never asked to do that. [00:05:34] Speaker 05: Fair point, but there's no reason why they could not invoke enforcement discretion in the context of an order, either refusing authorization or deferring the authorization decision. [00:05:51] Speaker 05: That's right. [00:05:52] Speaker 05: I mean, it's unusual, but there's an emergency on the ground in Puerto Rico. [00:05:58] Speaker 05: Post Maria, people didn't have power for a year. [00:06:01] Speaker 05: So like, of course they're going to worry about [00:06:04] Speaker 02: A couple of responses your honor so you're right that they absolutely could invoke enforcement discretion that would run them how long into our second argument which is that even if there is a clear invocation of enforcement discretion here they've exceeded the discretion. [00:06:20] Speaker 02: But the second point is exactly what you said, which is they've taken an order that's perhaps not a model of clarity about what they were doing. [00:06:28] Speaker 02: And now for the first time on appeal saying, oh, this was a clear implication of enforcement discretion. [00:06:33] Speaker 02: So the way we would take that order is to say that absent that clarity, this court shouldn't impose a very strict and harsh penalty of making an order not judicially reviewable. [00:06:44] Speaker 02: As this court and the Supreme Court have made clear, this is supposed to be a narrow exception to judicial review. [00:06:50] Speaker 02: And if FERC wants to take advantage of that and shield its order, it should invoke enforcement discretion clearly. [00:06:58] Speaker 02: That's what it's done in prior orders, including the two that FERC cites, the prelude order and the Greenfield order. [00:07:05] Speaker 02: Both of those clearly on their face say, this is an act of enforcement discretion. [00:07:09] Speaker 02: We're not going forward. [00:07:11] Speaker 02: And when you look at this court's cases dealing with acts of enforcement discretion, you see that it singles out or it distinguished those circumstances where the agency was acting as an adjudicator. [00:07:23] Speaker 02: So in the sharing case that NFE cites, [00:07:26] Speaker 02: In footnote 19, the court makes clear, this isn't a context where someone had to come to approval for us first. [00:07:33] Speaker 02: So that's why it's so easy to see this as an act of enforcement discretion. [00:07:37] Speaker 02: So I take your honor's point that this order is in a model of clarity, but in the context of the ambiguity that we have and how everyone's proceeded since then, it doesn't make sense to read it or reach out to read it as an act of enforcement discretion. [00:07:51] Speaker 06: Mr. Shannon, what would you have the court do exactly? [00:07:55] Speaker 02: We'd have the court vacate the order. [00:07:58] Speaker 02: Where are you if we vacate the order? [00:08:01] Speaker 02: So our view is that the order does approve interim or temporary authorization of the facility. [00:08:06] Speaker 02: The court vacates the order. [00:08:07] Speaker 02: That leaves no temporary or interim authority on the books. [00:08:12] Speaker 06: I think FERC agrees with you. [00:08:13] Speaker 06: There's no temporary authorization. [00:08:15] Speaker 02: If FERC agrees with us on that, then? [00:08:17] Speaker 06: If they've said we just decided to take no action, I think it follows that therefore there is no temporary authorization. [00:08:25] Speaker 06: In effect. [00:08:27] Speaker 02: So we we agree with you that that that would be a potential way to read the order. [00:08:32] Speaker 02: The reason this court should vacate it as an authorization is the reason Commissioner Dan Lee says, which is the nature of first order makes the situation a bit of a mess and chaos. [00:08:42] Speaker 02: And from NFE's perspective, they're holding out this order. [00:08:45] Speaker 02: They're going to their shareholders in their 10K. [00:08:48] Speaker 02: They're going out into the world saying, we do have approval. [00:08:50] Speaker 02: We have authority to operate this. [00:08:52] Speaker 06: That may be, but they may be misrepresenting what they've got, or maybe so confusing that they're simply confused about what they've got. [00:09:01] Speaker 06: But let's read the order however you want. [00:09:04] Speaker 06: What would you have us do? [00:09:06] Speaker 06: Vacate this confusing order, and then what happens? [00:09:13] Speaker 02: So then it goes back to FERC for it to explain. [00:09:16] Speaker 06: So you're telling us we have to order them to explain something? [00:09:21] Speaker 02: Not at all, Your Honor. [00:09:22] Speaker 02: So we have to explain. [00:09:24] Speaker 06: We just vacate the order. [00:09:25] Speaker 02: We vacate the order. [00:09:26] Speaker 02: The approval goes away. [00:09:28] Speaker 02: NFE can decide to violate the law if it would like, but otherwise FERC will proceed on the current proceedings. [00:09:33] Speaker 05: Or FERC can say we're not going to take enforcement action given the urgent emergency on the ground. [00:09:41] Speaker 02: It might say that we think that would run into the second problem we mentioned in terms of the constraints on their enforcement discretion. [00:09:49] Speaker 02: So I'll touch on that briefly, which is that under the Natural Gas Act, the structure and in comparison to Section 7 makes clear that FERC simply does not have the authority to grant emergency or interim authority to operate or build a pipeline. [00:10:03] Speaker 02: That's clear from Section 717 [00:10:06] Speaker 02: be E1, 2, and 3, which make clear that FERC's authority is to approve or deny. [00:10:13] Speaker 02: We've spotted you that. [00:10:15] Speaker 05: We're over that point for purposes of this exchange. [00:10:21] Speaker 05: There's no authorization. [00:10:23] Speaker 05: And FERC says there's an emergency on the ground. [00:10:31] Speaker 05: And we choose not to. [00:10:35] Speaker 05: enforce the requirement while we daughter eyes and cross our keys on NEPA. [00:10:42] Speaker 02: Certainly, your honor. [00:10:43] Speaker 02: So so I think this court's decision in Baltimore Gaston electric becomes helpful there where it makes clear that there is a hard constraint on forks ability to grant or allow pipeline to be built and operate and operated as a matter of enforcement discretion. [00:11:02] Speaker 02: So it's not the case that once the heckler bar applies that there can be no inquiry, presumption applies that there can be no inquiry into the constraints on the discretion that FERC enjoys. [00:11:12] Speaker 02: And the statute here does make clear that FERC is pretty limited in what it can do in terms of whether or not to authorize a project going forward. [00:11:20] Speaker 04: What the Baltimore gas opinion says right after the portion you've highlighted is that the statute is utterly silent on the manner in which the commission is to proceed against a particular transgressor. [00:11:31] Speaker 04: And when I think about that question, although it's a little bit odd, nobody's raised this, so maybe I'm missing something. [00:11:39] Speaker 04: 717S is the enforcement authority. [00:11:42] Speaker 04: And it is incredibly clear that that is entirely discretionary with the commission, right? [00:11:49] Speaker 04: And that sets out what the commission shall do when it appears that any person is about to engage in an act that will constitute a violation. [00:11:59] Speaker 04: That's this case on everyone's view of it. [00:12:02] Speaker 04: And it's entirely within their discretion to take action to stop the project. [00:12:08] Speaker 04: So what's the answer to that? [00:12:12] Speaker 02: So two answers, Your Honor. [00:12:13] Speaker 02: The first is that given the clarity of that provision, you'd expect FERC to invoke their discretion. [00:12:20] Speaker 02: At least in the context of delivering the order, they haven't. [00:12:23] Speaker 02: They've never been able to point to anything in their order saying that they have. [00:12:27] Speaker 02: But the second answer is that it cannot be the case that FERC can use its discretion to grant backdoor approval on an emergency basis that Congress did not intend them to have. [00:12:42] Speaker 02: FERC has a well-articulated regime about when it can grant emergency approval. [00:12:46] Speaker 05: You're coming back to authorization. [00:12:51] Speaker 05: Let's just talk about enforcement discretion. [00:12:54] Speaker 05: That's right. [00:12:56] Speaker 05: Government doesn't have to prosecute every crime it identifies in the world. [00:13:01] Speaker 02: That's right, Your Honor. [00:13:02] Speaker 02: So I will focus on the first argument we have, which is that in the context of an application to build and operate a pipeline, that it simply makes little sense to read FERC as engaging in a preemptive act of enforcement discretion. [00:13:18] Speaker 02: It's a strange thing for it to do. [00:13:19] Speaker 02: And we would ask this court not to stretch to read its order that way. [00:13:23] Speaker 02: This is all coming in the backdrop of the court's decision in Allegheny just five years ago, where [00:13:29] Speaker 02: The court made clear that FERC should not be allowed to play games with how it frames its orders to escape judicial review. [00:13:38] Speaker 02: And this feels like another example of that kind of thing. [00:13:40] Speaker 06: Let me ask you about the Burlington case. [00:13:45] Speaker 06: Does FERC operate as many other regulatory agencies do by having the staff prosecute the case against the regulated company and the FERC sits as the adjudicator? [00:14:00] Speaker 02: That's my understanding is that there is for staff that can initially recommend enforcement. [00:14:05] Speaker 06: That's the ordinary way the utility regulation is set up. [00:14:08] Speaker 06: Right. [00:14:09] Speaker 06: So the staff is, when they operate as the enforcement voice of the agency, they are engaged in enforcement and the commissioners, the five commissioners are engaged in adjudication. [00:14:25] Speaker 06: So how does an order to the commission saying, [00:14:30] Speaker 06: following your request that they own up to what they're doing, that this order isn't sufficient. [00:14:40] Speaker 06: Surely that goes to the enforcement arm of the commission, doesn't it? [00:14:47] Speaker 06: I think you're right. [00:14:48] Speaker 06: It speaks to the commission in its enforcement capacity. [00:14:52] Speaker 02: I think you're right, Your Honor. [00:14:53] Speaker 02: And it's adjudicatory. [00:14:56] Speaker 02: That this kind of wearing two hats role that FERC has is another reason that it should be particularly clear in terms of which hat it's wearing when it speaks. [00:15:06] Speaker 02: Everything you'd have that FERC is resolving up until [00:15:12] Speaker 02: Ferg's brief on appeal has it in the context of resolving or adjudicating an application for building and operating a pipeline. [00:15:20] Speaker 02: It's only on appeal that it says, oh, actually, we're wearing both hats at once. [00:15:24] Speaker 02: You might not have realized that, but now we're telling you that. [00:15:27] Speaker 02: So I think it's the fact that they do wear these multiple hats that requires clarity here. [00:15:34] Speaker 06: It seems to me that that's what defeats clarity. [00:15:40] Speaker 06: It makes it unreachable that the Burlington distinction is not helpful to you or the court. [00:15:48] Speaker 02: So I think it's helpful in the first instance because they're acting as an adjudicator. [00:15:54] Speaker 02: They're receiving an application that has, and in response to that application, 717B- Receiving an application and the staff acts on the application. [00:16:02] Speaker 02: Correct. [00:16:04] Speaker 02: And there's no role for enforcement discretion to play in the first instance. [00:16:07] Speaker 02: What FERC would have had to engage with here is a preemptive exercise of enforcement discretion. [00:16:13] Speaker 06: I'm having trouble breaking what appears to be a circle here, which is that if we say what you did is invalid, but we can't say you have to do something else because of Ed Clark against Janey. [00:16:33] Speaker 06: I mean, whether we talk about it at the front end or the back end on remedy necessary for standing, mediability, redressability, that comes back to Cheney either way. [00:16:49] Speaker 02: So you're right, Your Honor. [00:16:51] Speaker 02: To the extent that ambiguity is the best we can get, we think the order should still go back to FERC so they can make this clear. [00:16:58] Speaker 02: You may be right that in the end, they'll exercise their enforcement discretion more clearly, and that will prove an uphill battle for us to get around, given Judge Garcia's point about what the statute says about complaints and your point about maybe they would be wearing two hats. [00:17:14] Speaker 02: But right now, the order is not. [00:17:16] Speaker 06: What you're saying is we can't really remedy your cause. [00:17:20] Speaker 02: We think it would remedy our cause, because right now we are reading this as encompassing an approval of the facility. [00:17:28] Speaker 06: Your understanding depends upon getting a remedy. [00:17:30] Speaker 06: And any remedy short of removing that pipeline is not a remedy at all. [00:17:38] Speaker 02: So just to clarify, we don't need to remove the pipeline. [00:17:41] Speaker 02: Or deactivate it. [00:17:42] Speaker 02: If they could stop the operation of the pipeline, that would help our members as well. [00:17:45] Speaker 02: Short of that, you get nothing. [00:17:47] Speaker 02: That's right. [00:17:48] Speaker 02: That's what we're seeking is. [00:17:49] Speaker 02: And that's what we cannot order. [00:17:53] Speaker 02: We're not asking you to order NFE to stop operating directly. [00:17:56] Speaker 02: We're asking you to vacate an order which gives them authority to operate. [00:18:00] Speaker 02: And that should be sufficient for standing purposes. [00:18:08] Speaker 06: I'd be a very unhappy plaintiff if I were you. [00:18:10] Speaker 06: And I got that order. [00:18:13] Speaker 05: We'll give you some. [00:18:15] Speaker 05: Thanks. [00:18:20] Speaker 05: All right, we'll hear from Perk, Mr. Schaener. [00:18:36] Speaker 03: May it please the court, Houston Schaener, for respondent Federal Energy Regulatory Commission. [00:18:41] Speaker 03: I'd like to start with Judge Garcia's first question. [00:18:44] Speaker 03: I think that largely resolves this case. [00:18:46] Speaker 03: If you don't read the phrase, take no action to prevent the construction and operation of the connecting line as an act of enforcement discretion, how else can you read it? [00:18:56] Speaker 03: My colleague makes heroic effort, but there's no response in that as in terms of a counter interpretation. [00:19:01] Speaker 03: And the only plausible reading of that phrase, or at least the most sensible reading of that phrase, is as an enforcement declination. [00:19:07] Speaker 03: That's clear from the case law starting all the way back in the 1980s with Heckler v. Cheney. [00:19:11] Speaker 03: The Supreme Court notes that the FDA refused to take action to prevent unlawful conduct. [00:19:16] Speaker 03: That is an enforcement action. [00:19:17] Speaker 03: It is true that in some cases, like Heckler v. Cheney, also used the modifier enforcement in front of action, the term action. [00:19:24] Speaker 03: But if you were to take out the word enforcement, no one will be confused that that was an enforcement declination in that case. [00:19:29] Speaker 03: And in other cases, like Sierra Club v. Jackson or in the first decisions like Prelude, a decision not to act is implied and understood as a decision not to take enforcement action. [00:19:40] Speaker 03: I believe that's certainly clear. [00:19:41] Speaker 03: Happy to take the court's questions on that. [00:19:45] Speaker 04: So in FERC's view, is this line operating lawfully at the moment? [00:19:50] Speaker 03: No. [00:19:51] Speaker 03: The commission did not authorize this line, but the commission is not taking action to prevent any unlawful operation. [00:19:56] Speaker 04: The other question is just as a practical matter, what is different right now [00:20:02] Speaker 04: between what these orders do and an affirmative temporary authorization, assuming you had that authority. [00:20:09] Speaker 04: What are the risks they're facing? [00:20:11] Speaker 03: Certainly a good question. [00:20:12] Speaker 03: I think a formal authorization would be more durable and indefinite. [00:20:16] Speaker 03: Obviously, the connecting line could operate more or less in perpetuity until the authorization was revoked. [00:20:21] Speaker 03: And there would have to be certain procedures to revoke that authorization, assuming, of course, it survives judicial review. [00:20:26] Speaker 03: But that would greatly reduce the risk of the pipeline company. [00:20:30] Speaker 03: In contrast here, [00:20:31] Speaker 03: There's an enforcement decision out of the gate. [00:20:35] Speaker 03: The Commission can withdraw that any time. [00:20:36] Speaker 03: Nothing stops the petitioners from coming back to the Commission and say, hey, you misunderstood some of the facts on the ground or the circumstances have changed, reconsider the exercise of your enforcement discretion, and perhaps the Commission won't do that. [00:20:46] Speaker 03: And even if the Commission didn't do that, this situation has an ongoing formal docket in which the Commission will make a merits determination [00:20:54] Speaker 03: on the legal status of both the terminal and the connecting line that we either grant or deny formal authorization. [00:21:00] Speaker 03: And then they will have potentially full relief for the plaintiffs here and eventually a huge risk to the pipeline company to continue operating at that point. [00:21:10] Speaker 05: Is that ongoing? [00:21:11] Speaker 03: I mean, yes, it's very active. [00:21:14] Speaker 03: I believe there are filings as as recent as either last week or yesterday. [00:21:18] Speaker 03: And I would also point you to the red brief. [00:21:21] Speaker 03: You have a [00:21:23] Speaker 05: compelling story on the emergency. [00:21:27] Speaker 05: But I mean, it's been four years on the terminal itself. [00:21:32] Speaker 03: For the terminal, that is true. [00:21:33] Speaker 03: It's obviously not four years to connecting the line and connecting line to change things to some degree. [00:21:37] Speaker 03: But the commission takes its job very seriously under section three. [00:21:40] Speaker 03: And this is very highly technical information in which we have to make sure that we go through a wide variety of information and consider everything relevant to public interest. [00:21:48] Speaker 03: And if your honor is concerned about the process, I would point you to red brief pages 18 and 19, the subsequent development section statement of case. [00:21:56] Speaker 03: We cite the commission's notice of intent to repair an environmental impact statement for the combined docket. [00:22:03] Speaker 03: There you'll see a schedule for environmental review, which estimates a final order in this docket, I believe, February 2026, with a draft environmental impact statement, a planning assumption of a draft environmental impact statement, I believe. [00:22:18] Speaker 03: May of this year, the court can certainly check that schedule again. [00:22:21] Speaker 03: I'm doing this from memory. [00:22:23] Speaker 03: But obviously, the commission has made a lot of progress on DACA already and has continued to make progress. [00:22:28] Speaker 03: And this is a little bit unusual in that rather than having a fully formed and very deliberate application, a very complete application upfront, the commission had to take the terminal from the beginning and then withdraw and pull information from NFNU in real time. [00:22:47] Speaker 03: certainly means that there are a lot of things like information requests that the commission has to send out to gather further information. [00:22:53] Speaker 04: It's at least odd that section seven does provide for emergency temporary authorizations and section three does not. [00:23:00] Speaker 04: Do you have any understanding of why that is? [00:23:04] Speaker 03: Unfortunately, I cannot tell you exactly. [00:23:06] Speaker 03: I do know, as you'll see in footnote five of the original order, the commission has regulations allowing the sort of emergency reconstruction of section three facilities. [00:23:18] Speaker 03: I can only speculate, but it may be somewhat related to the sort of split authority between the Department of Energy and FERC. [00:23:24] Speaker 03: We have authority over the siting facilities, but not necessarily the export of natural gas. [00:23:31] Speaker 03: All right, thank you for your time. [00:23:33] Speaker 05: Thank you. [00:23:45] Speaker 05: Mr. Merrwell. [00:23:46] Speaker 01: Good morning, Your Honors. [00:23:47] Speaker 01: Jeremy Marwell for the intervener, NF Energia LLC. [00:23:52] Speaker 01: Just a few quick points. [00:23:54] Speaker 01: First, in form and in substance, we think the orders here can only be read as a decision by FERC not to exercise its enforcement discretion to stop the construction or operation of a pipeline that is, frankly, quite needed to keep the lights on in Puerto Rico. [00:24:10] Speaker 01: The context that we came to the commission asking for an approval does not dictate that everything that the commission did in response to that request is an approval. [00:24:21] Speaker 01: And the reality is we did not get everything we asked for initially. [00:24:24] Speaker 01: We asked for an authorization and we got the order that said that we will consider that later. [00:24:29] Speaker 01: But for now, the sentence that we will not take action to immediately stop construction or operation. [00:24:39] Speaker 01: A few other cleanup points. [00:24:42] Speaker 01: With regard to the public statements by our company about what we received, I think the petitioners cite to a 10K, which of course is not a legal brief. [00:24:51] Speaker 01: It's a more practical document meant to disclose to the market. [00:24:55] Speaker 01: And the reality is we had to make a risk-informed decision when we got this order, and we did move forward, and we've been able to operate the pipeline. [00:25:04] Speaker 01: the petitioners briefly there was some brief discussion about whether the same theory would apply to the [00:25:10] Speaker 01: the terminal, the facility as a whole. [00:25:12] Speaker 01: This case only involves the 220 feet of pipe. [00:25:16] Speaker 01: I think, as petitioners can see, nobody on their side appealed that temporary order. [00:25:21] Speaker 01: So I don't think you would say anything about the terminal as a whole. [00:25:24] Speaker 01: I'm hopeful the court will not get to remedy. [00:25:27] Speaker 01: But if you did get to remedy, we would urge you to leave that to the commission in the first instance and not take any action by this court that would interrupt operation of that line. [00:25:36] Speaker 01: Unfortunately, it remains urgently needed [00:25:38] Speaker 01: progress is being made, but the situation is still quite tenuous, as you can see from the sites in our brief, and reports by the LUMO, which is the entity responsible for the distribution and transmission of electricity in Puerto Rico. [00:25:53] Speaker 04: So unless there are any other questions, we'd ask that you... Is it correct as a factual matter that the company didn't start building the line until it received this order? [00:26:03] Speaker 01: That is my understanding. [00:26:04] Speaker 01: We did not build until we received the order. [00:26:08] Speaker 01: But you actually requested an order. [00:26:12] Speaker 01: Correct. [00:26:13] Speaker 06: And that- How long did it take between your request and this decision? [00:26:17] Speaker 01: So this starts at JA1, July 18th, 2023 was the [00:26:25] Speaker 01: the commission's initial order was July 31st. [00:26:32] Speaker 01: So they did act quite promptly. [00:26:35] Speaker 01: We asked them to act very promptly. [00:26:37] Speaker 01: The context that the record shows was that [00:26:40] Speaker 01: hurricane season was coming, and this temporary electric generation that is enabled by this pipeline was necessary to try to harden the system against the incoming hurricane season. [00:26:50] Speaker 01: And the Commission independently verified that. [00:26:53] Speaker 01: It's also in the record with direct communications with the Army Corps, which was the agency tasked by the Federal Government Interagency Task Force with trying to come up with very expedited ways of putting more generation assets on the system. [00:27:05] Speaker 01: So yes, it was very quickly, but we did not start until we got the order from the commission. [00:27:13] Speaker 01: Thank you. [00:27:13] Speaker 05: Thank you very much. [00:27:20] Speaker 05: Mr. Jagannan, rebuttal. [00:27:22] Speaker 02: Thank you, Your Honor. [00:27:24] Speaker 02: So I have two points on rebuttal. [00:27:25] Speaker 02: I'd like to start with Judge Garcia's question to my friend on the other side, which is just to repeat that you heard the government concede that there's functionally no difference between what this order does and granting an interim approval. [00:27:39] Speaker 02: And you can imagine FERC taking that authority and using it in all sorts of contexts. [00:27:43] Speaker 02: There would be nothing stopping it if this court were to rule for FERC here from FERC saying, we actually think this is against the public interest, but we're going to let you do it anyway. [00:27:53] Speaker 02: We don't want to do any peer review at all. [00:27:55] Speaker 02: We know we're supposed to, but we don't want to, but you can go forward anyway. [00:27:58] Speaker 02: The second point I would like to emphasize is how to think about whether this is an emergency. [00:28:05] Speaker 02: So the first aspect of the emergency is that the same citations my friend from NFE mentioned indicate that they knew as early as April of that year that [00:28:16] Speaker 02: that they would need to apply to FERC for this kind of authorization. [00:28:19] Speaker 02: That's what spun up this project to begin with. [00:28:22] Speaker 02: And they waited until just a few days, a few weeks before they needed to get going. [00:28:26] Speaker 02: So it's an emergency of their own making in part. [00:28:29] Speaker 02: But second, I also want to emphasize that the nature of this emergency has shifted over time. [00:28:34] Speaker 02: Originally, they come to FERC and they say, this is for the upcoming hurricane season. [00:28:38] Speaker 02: This pipeline's now been operating for one more hurricane season, and we're about to enter another one. [00:28:43] Speaker 02: And in the same materials that my friend from NFE sites, they make clear that the reason that these facilities are needed has changed. [00:28:51] Speaker 02: It used to be that it was for hurricane season. [00:28:53] Speaker 02: But in the last year, PREPA, which is the Puerto Rico Utility Agency, came forward and said, we need to take control of these because these are now important for our purposes overall. [00:29:03] Speaker 02: So there's a shifting nature of the emergency over time that underscores that. [00:29:10] Speaker 02: It's not totally clear from the record here exactly why this pipeline is needed and that has shifted over time. [00:29:15] Speaker 02: And the last point on emergency is that the initial request, and this isn't fully developed because FERC hasn't analyzed it yet, but the initial request was that it was important to get this facility [00:29:28] Speaker 02: uh, for hurricane season. [00:29:29] Speaker 02: But our record, the record shows, and this is a J 39 that the problem with Puerto Rico's, uh, electricity problems has to do with the grid and not a lack of centralized generation. [00:29:38] Speaker 02: And all this provided with centralized generation. [00:29:41] Speaker 02: So we'd ask this quarter at this court to vacate the orders. [00:29:46] Speaker 05: Okay. [00:29:46] Speaker 05: Thank you, Council. [00:29:46] Speaker 05: Thank you. [00:29:47] Speaker 05: Thank you. [00:29:47] Speaker 05: All Council cases submitted.