On March 18, 2021, FERC issued a Final Rule amending its regulations to establish a one-year period for states, tribes, or other certifying authorities (“Certifying Agencies”) to act on a Clean Water Act (“CWA”) Section 401 water quality certification request for proposed natural gas and liquefied natural gas projects.

Under the CWA, a Certifying Agency is deemed to have waived the certification requirements if it “fails or refuses to act on a request for certification, within a reasonable period of time (which shall not exceed one year) after receipt of such request.”  In 1987, FERC promulgated regulations providing that, in the case of hydropower proceedings, a Certifying Agency is deemed to have waived water quality certification if it has not granted or denied certification within one year after its receipt of a certification request.  While FERC has never established a comparable regulation for natural gas projects, its practice has been to apply the same one-year waiver period.

On June 1, 2020, the Environmental Protection Agency (“EPA”) released its final rule clarifying substantive authorities and procedural requirements for water quality certifications under Section 401 of the CWA.  Relying on the plain language of section 401 and the U.S. Court of Appeals for the D.C. Circuit’s 2019 decision in Hoopa Valley Tribe v. FERC, the final rule established that Certifying Agencies have a “reasonable period of time,” but only up to one year to act on a request for water quality certification.  While FERC has regulations dictating that Certifying Agencies have a one-year waiver period with respect to certifications related to hydroelectric projects under the Federal Power Act, it did not have such regulations for proceedings under the Natural Gas Act (“NGA”).

On September 9, 2020, FERC issued a Notice of Proposed Rulemaking (“NOPR”) proposing updated regulations that would establish a one-year period for Certifying Agencies to act on requests for water quality certifications related to sections 3 and 7 of the NGA (See September 16, 2020 edition of the WER).  The NOPR stated FERC’s position that establishing a one-year waiver period best serves the public interest by avoiding uncertainty that may be associated with open-ended or varying certification deadlines, and noted that it would be administratively inefficient to establish reasonable time periods on a case-by-case basis.  The NOPR concluded that it would be reasonable to provide a one-year waiver period—the maximum time allowable under the CWA—for Certifying Agencies to act.

FERC’s March 18, 2021 Final Rule establishes the one-year waiver period proposed in the NOPR for Certifying Agencies to act on requests for water quality certification.  In issuing the Final Rule, FERC dismissed comments urging the establishment of a shorter period of time on a case-by-case basis, concluding that setting “varying and open-ended certification deadlines” would require additional staff time and resources, and would potentially result in controversy.  It stated that establishing a one-year period, the maximum time allowed under the CWA, would provide Certifying Agencies with the maximum regulatory flexibility possible under the statute.

The Final Rule will be effective 90 days after the date of its publication in the Federal Register (June 28, 2021).