FERC denied Chestnut Ridge Storage LLC's request for rehearing of an unfavorable November 2011 ruling, and the commission vacated Chestnut Ridge's certificate authorizing the Junction Natural Gas Storage Project.
In a May 23 order, FERC shot down Chestnut Ridge's attempt to revive the project. The November 2011 order from the FERC Office of Energy Projects had denied the company's request for an extension of time to complete the Junction Natural Gas Storage Project, citing the company's lack of progress in developing it. The commission had authorized the facility, planned for a site near Uniontown, Pa., in an August 2009 order.
Addressing the rehearing request, FERC told Chestnut Ridge that the commission does not automatically grant gas projects additional time if they need it to weather poor market conditions, as the company suggested. Instead the commission will, in general, grant extensions when a project developer demonstrates good faith efforts "thwarted by unforeseeable circumstances," FERC said.
"In this case, however, it appears Chestnut Ridge has reached the conclusion, which we have no reason to dispute, that its project is not financially viable under current conditions," FERC wrote. "It has consequently refrained from moving forward with activities that must be completed, or be well underway, prior to initiating construction, e.g., acquiring necessary property rights, submitting a construction implementation plan, ordering materials, and obtaining state and federal permits and authorizations. These decisions on the part of the company provide grounds for the commission to refrain from 'automatically' granting Chestnut Ridge an extension of time without further consideration."
In comments on the troubles faced by Chestnut Ridge and another storage developer at FERC, attorney Joseph Fagan advised developers to take advantage of the commission's prefiling review process. (CP08-36)
Copyright 2012 SNL Financial LC. All Rights Reserved.
(Originally published May 28, 2012, in SNL Energy Gas Utility Week.)