Spire STL pipeline FERC certificate vacated by appeals court

Spire STL Pipeline LLC’s US Federal Regulatory Commission (FERC) certificate of public convenience and necessity, the document approving the project, has been revoked by the US Court of Appeals for the District of Columbia. Spire STL began operations in November 2019, transporting as much as 400 MMcfd natural gas 65 miles from Illinois to Missouri.

The court ruled that the contract between Spire STL and an affiliate establishing the latter as the line’s primary customer did not constitute necessity, and chastised FERC for failing to conduct independent analysis of need and instead relying on Spire STL’s assessment. “We find that the Commission ignored…evidence of self-dealing and failed to seriously and thoroughly conduct the interest-balancing required by its own Certificate Policy Statement. Therefore, FERC’s Certificate Order and Order on Rehearing do not survive scrutiny under the applicable arbitrary and capricious standard of review,” the court said in issuing its ruling.

FERC granted the certificate in 2018 despite an open season for the project having failed to receive any third-party interest in shipping on the pipeline and Spire STL subsequently granting Spire Missouri Inc. 87.5% of its capacity.

The court vacated FERC’s orders and remanded the case back to FERC for further action. The court cancelled the certificate even though the pipeline is operational, noting that “remanding without vacatur under these circumstances would give the Commission incentive to allow ‘build[ing] first and conduct[ing] comprehensive reviews later’ (Standing Rock Sioux Tribe v. Army Corps of Eng’rs, 985 F.3d 1032, 1052 (D.C. Cir. 2021). We certainly do not wish to encourage such an approach given the significant powers that accompany a certificate of public convenience and necessity.”