[00:00:02] Speaker 02:
Case number 16-1329 at L. Sierra Club at L petitioners versus Federal Energy Regulatory Commission.

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Ms.

[00:00:10] Speaker 02:
Benton for petitioners, Sierra Club at L. Mr. Waters for petitioners, GBA Associate at L. Mr. Fulton for the respondent.

[00:00:17] Speaker 02:
Mr. Marwell for the interveners.

[00:00:24] Speaker 06:
Good morning.

[00:00:24] Speaker 06:
Good morning.

[00:00:29] Speaker 01:
May it please the court, Elizabeth Benson, on behalf of the environmental petitioners.

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I'm going to take 15 minutes to address the issues in our briefs, and then Mr. Waters will take five minutes to address the issues in petitioner GBA's brief.

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And I'd like to reserve five minutes for rebuttal.

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This case involves a 686-mile-long pipeline that cuts across Alabama, Georgia, and Florida, exposing communities to risks from pipeline ruptures, construction impacts, groundwater contamination,

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and air pollution and noise from compressor stations, just to name a few.

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The issues in this case involve FERC's arbitrary environmental justice analysis, its refusal to take a hard look at the greenhouse gas impacts from consumption of a billion cubic feet a day of gas, which FERC says will result from the project, and FERC's improper allowance of a 14% return on equity based on a hypothetical capital structure.

[00:01:19] Speaker 06:
All right, so in terms of the environmental justice communities, in the

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analysis by the Commission, did it identify all of the burdensome facilities that were within the census tract at issue here?

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Well, there are multiple census tracts at issue here.

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I thought we were really focusing on the place where Albany is.

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We are interested in Albany as well as the entire pipeline.

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But for Albany itself, there are many burdensome, the community is overburdened already.

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So my question is, in FERC's analysis, did it identify how the community was overburdened?

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No, Your Honor.

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FERC said that this is a majority white census tract.

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and so therefore it's not in an environmental justice community.

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When in reality, instead it was looking at a mile radius around the compressor station.

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So petitioners showed that in fact the community around the compressor station

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is over 80% African American as demonstrated by the census block data.

[00:02:29] Speaker 06:
That's right.

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So you have those two arguments as well.

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So I just want to be clear.

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Is your understanding of what FERC said is because the census tract is majority white, therefore it is not an environmental justice community?

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Correct.

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FERC said that because it's in a majority white census tract,

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The compressor station is more than a mile from the nearest environmental justice.

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Didn't the EIS itself, though, recognize that the immediate vicinity surrounding the compressor station was 80% African American community?

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I mean, they may not have called the area an environmental justice community, but they recognized that, didn't they?

[00:03:11] Speaker 01:
No, Your Honor.

[00:03:12] Speaker 01:
In the comparison of alternatives, they have a table where they're comparing different

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compressor station locations, and they list the proposed location as not being an environmental justice community.

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And I do not believe that they recognize... That's not my question.

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My question is, and you can help me here, I'm not our... Yeah.

[00:03:31] Speaker 09:
The question isn't whether they called it an environmental justice community, but whether they recognized that the area immediately surrounding the compressor was in a black neighborhood.

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I thought that the report itself acknowledged that.

[00:03:45] Speaker 01:
Your Honor, it did not acknowledge it for the mile radius around the compressor station.

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It did talk about communities.

[00:03:50] Speaker 09:
I'm not saying whether it acknowledged that it was an environmental justice community, but just the facts on the ground, what the demographics were.

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And you're saying that it did not.

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No, I do not think that they recognized that.

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They talked about some communities that were over a mile away, but they really relied on the fact that the mile radius, they said, was not an environmental justice community.

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So they didn't have to take a closer look at the impacts on that community.

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And that was directly contravening the evidence submitted by petitioners.

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And they didn't say that's wrong.

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They just said, EPA says we can look at census tract data.

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In fact, the EPA guidance that they cited for that proposition warns against relying on census tract data repeatedly, specifically because it can miss pockets of high concentration pockets of minority communities or low income communities.

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So the commission said but it wanted to rely on census tract data because then it would have uniformity of information along the pipeline.

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Well, Your Honor, I think uniformly along the pipeline doesn't mean that they shouldn't look at the facts on the ground for the one-mile radius around the compressor station.

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So what they did here is said

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we're going to ignore this data, which is census block data.

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So it's just as accessible, just as reliable as the census tract data.

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Who creates that?

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The census data?

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The census block.

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Is that a creation of the Census Bureau?

[00:05:18] Speaker 01:
Yes.

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If you go to the Census Bureau website, it shows census tract data and census block data.

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So that was not a creation of petitioners.

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That's the US government.

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So that was a fundamental error because FERC couldn't assess the impacts on a community that it refused to acknowledge exists.

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And while it does have some discretion in methodology, it does not have discretion to ignore the evidence in the record before it.

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FERC also found that 83.7 percent of the pipeline route affects environmental justice populations, but said that's not a disproportionate impact.

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It did that by comparing the percentage of environmental justice populations affected by the project, 83.7 percent, only to the percentage affected by a few other select alternatives.

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And as the EBA said in its comments, disproportionality needs to be considered in the context of whether impacts appreciably exceed those on the general population, not just on other alternatives, but also primarily effective.

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Doesn't common sense tell us that the best comparison is between proposed alternatives?

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We're trying to give to the public and to the decision maker

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a real decision, and you can have a pipeline going here or here or here, why not compare the demographic groups between and among those pipelines?

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What's wrong with that?

[00:06:47] Speaker 01:
Your Honor, I think it's fine to do that, but there also has to be a comparison to a more general population to get some understanding of how impactful the pipeline is.

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And again, FERC said that EPA supported its approach of only comparing to these alternatives that also highly impact these populations.

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But again, the EPA guidance

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that purported to rely on actually says that if you do take alternatives that are also only affecting areas that are predominantly environmental justice communities, you need to also look at an alternative that doesn't do that so you get a sense of the actual demographics and whether environmental justice communities are being disproportionately impacted.

[00:07:31] Speaker 05:
What in your view is the court supposed to do with this?

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In other words, what standard are we applying here?

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Because the guidance says it doesn't create any right.

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It's for the benefit of the executive branch departments, just to help them look at this.

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So what does the court do with this?

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So Your Honor, we are trying to enforce NEPA.

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This claim arises under NEPA and the APA, not under the guidance of the executive order.

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So we'd like the court to look at whether FERC's analysis was arbitrary and capricious.

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And we believe it was because it ignored the data on the ground regarding the actual composition of the population around the compressor station.

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Even though it said it was using the one-mile area of analysis, it completely ignored who actually lives in a one-mile area of analysis or one-mile radius around that station.

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And for the 83.7%, that was arbitrary and capricious because they only compared it to alternatives that also primarily affect environmental justice populations.

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There were other alternatives they could have compared it to that affected a lower percentage of environmental justice populations.

[00:08:44] Speaker 06:
Well, there was the no action.

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alternative, but the other alternatives I thought FERC did address and explained why they wouldn't work.

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I mean there wasn't a port, one was very expensive,

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So they did address other alternatives, but they didn't include that in their environmental justice analysis where they said 54 to 83 points, 54 to 80% of those alternatives also impact environmental justice communities.

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That only included what they called the land-based major route alternatives.

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So it was really only a few other alternatives.

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And then they compounded that error by saying that 54%

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is similar to 83.7%.

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Those percentages are not similar.

[00:09:33] Speaker 01:
It's 30% for a 686-mile pipeline.

[00:09:36] Speaker 01:
That means more than 200 additional miles of pipe affecting environmental justice communities.

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That's from here to New York.

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And by FERC's own benchmarks, 10% is meaningfully greater.

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So that was also arbitrary and capricious under the APA standard.

[00:09:54] Speaker 06:
So just back to Judge Brown's question.

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The argument is that because of the way FERC proceeded, it didn't have the information that was relevant to making a decision whether to issue the certificates of convenience and necessity.

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In other words, you know, Intervena makes this argument in our court and said, you know, NEPA is not a substantive, it's just a procedural.

[00:10:28] Speaker 06:
The commission says, well, we did this mammoth study.

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And as Judge Griffith's question suggested, it mentioned the African-American community around the compressor station.

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And we would have to find, wouldn't we, that if we were to agree with some of your arguments,

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that those omissions were material to the decision FERC had to make?

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In other words, I'm just trying to understand, as I understood what Judge Brown was focusing on, even if you're right about some of these things, what difference does it make under NEPA?

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So I'm just trying to think of what's the best articulation of does the agency have

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the information it needs in order to make the decision.

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And obviously, there's a judgment involved.

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So the petitioners don't need to show that FERC would change its decision.

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We just need to show that they made an uninformed decision.

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And we believe that here they did.

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When an environmental justice community is identified, the agency is supposed to take certain steps

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to zero in on whether that community is disproportionately impacted.

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Here they didn't do that, so it did affect their consideration of alternatives, as I mentioned earlier.

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It affected mitigation measures.

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It affected their decision about whether the project as a whole

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whether the public benefits outweigh the adverse potential adverse impacts.

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And I see I only have three minutes left.

[00:12:19] Speaker 01:
So I'd like to turn briefly to downstream greenhouse gas impacts.

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Just the primary objective of this project is to supply natural gas to power plants.

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NEPA requires indirect effects to be analyzed.

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The consumption is not speculative.

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FERC said that this project would result in the consumption of a billion cubic feet a day.

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It had widely available tools available.

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EPA pointed it to a Department of Energy study that it could have used, and it's excused that some of the gas or some of the emissions will potentially be offset

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is not an adequate explanation for not analyzing those impacts, nor is the fact that it will be regulated downstream.

[00:12:59] Speaker 09:
If we disagreed with you and felt that there wasn't a sufficient link between the greenhouse gas emissions and specific climate change, if we disagreed with that, is there some reason then for them to do the calculations for methane emission if you can't link it to specific climate change?

[00:13:17] Speaker 01:
Well, I think we're primarily talking about carbon dioxide from the power plants.

[00:13:21] Speaker 01:
Yeah, and they can calculate that, and they fail to do so.

[00:13:24] Speaker 09:
But why do that unless you can link it to a specific climate change?

[00:13:28] Speaker 01:
Because it gives the petitioners, the public, and FERC itself more information about the impacts of this project.

[00:13:35] Speaker 01:
And I now have under two minutes left, so I think I'd like to submit.

[00:13:39] Speaker 06:
I will give you some more time, but I just want to be clear.

[00:13:46] Speaker 06:
The agency itself, in its environmental analysis, makes the connection between greenhouse gases and climate change.

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So at least when it was making this determination, the agency had already accepted that, had it not?

[00:14:07] Speaker 01:
The agency accepts the idea that greenhouse gas impacts cause climate change, but they include no analysis of how this project, how many

[00:14:16] Speaker 01:
Any meaningful assessment of the greenhouse gas emissions that will result?

[00:14:21] Speaker 06:
No, I understand.

[00:14:21] Speaker 06:
I understand.

[00:14:22] Speaker 06:
But I thought Judge Griffith's question was getting to the basic point.

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And what I was trying to respond in part was the agency has already, for purposes of this order and rehearing order, accepted the link.

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And of course, the agency can respond if that's incorrect.

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But I thought the agency had already accepted that there was a link.

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And it gave other reasons for not proceeding.

[00:14:50] Speaker 01:
It accepts a link between greenhouse gases and climate change, but doesn't assess them as to this project.

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As for the emissions from the power plants, FERC both provides a few excuses for failing to take a hard look, and that's the portions of the gas will be offset and that downstream power plants are regulated.

[00:15:12] Speaker 01:
Those excuses do not hold water.

[00:15:14] Speaker 01:
But then it also says there's not a sufficient connection.

[00:15:18] Speaker 01:
And even if there was, we don't have the information available.

[00:15:20] Speaker 06:
But not a sufficient connection between what and what?

[00:15:27] Speaker 01:
The pipeline and the power plants, the power plant emissions.

[00:15:32] Speaker 05:
Well, I mean, isn't that right?

[00:15:34] Speaker 05:
One of the problems with trying to understand how this really works is that

[00:15:40] Speaker 05:
When FERC is looking at and trying to do its NEPA analysis, it's looking at what impact will building the pipeline actually have, right, that project, whereas who uses it later, that's not something they can control.

[00:15:57] Speaker 05:
So I guess the question is, what is it that you think should be part of their analysis of the pipeline when it's really an effect that's going to be, if it happens, the result of how the end user uses that gas that goes through the pipeline?

[00:16:16] Speaker 01:
Well, because NEPA requires indirect effects that are reasonably foreseeable to be analyzed.

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And this is clearly a reasonably foreseeable effect.

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of building this pipeline.

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That billion cubic feet a day of gas is not going to flow and not going to be burnt to bower plants if FERC does not approve this pipeline.

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So it should be, as a classic indirect effect, considered before FERC decides whether the project is in the public interest.

[00:16:41] Speaker 09:
Why isn't this controlled by public citizen and in our case is interpreting public citizen?

[00:16:47] Speaker 01:
Well, Public Citizen had a pretty narrow holding that it's only if the agency has no control over the effects or the action itself such that the information in the EIS would hold no value, it would have no impact on the decision.

[00:17:01] Speaker 01:
Here FERC makes an analysis of whether the project's public benefits outweigh the potential adverse impacts.

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So we can take into account

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that X number of greenhouse gases are going to be released in making that determination.

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And then the LNG cases that you reference, they held that the Department of Energy is the entity that's basically turning the spigot on or off here, letting that billion cubic feet a day per gas.

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flowed through the world.

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Here, there is no divided statutory authority like there is in the LNG context.

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FERC is the one making that decision to turn the spigot on or off.

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There's no intervening decision like there was in those LNG cases.

[00:17:51] Speaker 06:
Let me just ask you about the 14.5%.

[00:17:53] Speaker 06:
What's your response to FERC's argument?

[00:17:58] Speaker 01:
Well, our claim is pretty simple, despite the complexity of the issues here.

[00:18:02] Speaker 01:
Initial rates have to be in the public interest.

[00:18:06] Speaker 06:
So FERC says it's recently approved 14 and a half percent.

[00:18:11] Speaker 06:
So that's what it was doing here.

[00:18:13] Speaker 01:
Well, this court has held that bare reliance on prior cases is not sufficient.

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FERC needs to provide a reasoned and substantial authority for doing so.

[00:18:25] Speaker 01:
So here, basically, FERC said,

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Well, in the past, we've given new pipelines this 14% return on equity with up to a 50% debt structure.

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So I said up to a 50% debt structure.

[00:18:39] Speaker 01:
That means it's the highest that they give.

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And when FERC undertakes this analysis, I'll quote the pine needle proceeding, which was a section seven case, and which very similar language is used in this court's North Carolina Utilities Commission case.

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that to establish a rate of return on equity, FERC identifies a zone of reasonableness based on the range of returns experienced by comparable companies and then adjusts the return of the pipeline at issue within this zone to reflect the business and financial risks specific to that pipeline.

[00:19:13] Speaker 01:
So merely saying, we've done this in the past with other pipelines.

[00:19:16] Speaker 01:
So we're going to give this pipeline the highest.

[00:19:18] Speaker 09:
Have you, did you make that argument in your briefs?

[00:19:21] Speaker 09:
I had a hard time finding that.

[00:19:22] Speaker 09:
I think that's a good, I think the strong argument, there wasn't substantial evidence supporting this, that they just relied on what they've done in the past.

[00:19:29] Speaker 09:
But I couldn't find that argument in your briefs.

[00:19:31] Speaker 01:
Yeah, I think we argue that they can't just cite to prior authority, and that is because they need to provide substantial evidence.

[00:19:38] Speaker 01:
I believe we use those words, or at least that they need to have a well-reasoned decision.

[00:19:43] Speaker 06:
All right, let us hear from.

[00:19:45] Speaker 01:
Thank you.

[00:19:48] Speaker 06:
Consolidated case.

[00:20:05] Speaker 00:
at police court.

[00:20:06] Speaker 00:
My name's Jonathan Waters, and I represent GBA Associates and Kay Gregory Isaacs, who are the appellants here.

[00:20:16] Speaker 00:
Just a little bit of background briefly.

[00:20:18] Speaker 00:
They are landowners down in South Georgia near Moultrie, Georgia.

[00:20:24] Speaker 00:
For the last four years, as this project has been working its way from surveying stages to now, they have been fighting this pipeline.

[00:20:33] Speaker 00:
To give you an idea of this pipeline,

[00:20:35] Speaker 00:
because pipelines are different sizes.

[00:20:37] Speaker 00:
This seal of the United States, the center circle of that seal, I would say is approximately 36 inches.

[00:20:44] Speaker 00:
That is the diameter of this pipeline that is running through South Georgia.

[00:20:49] Speaker 00:
Now,

[00:20:52] Speaker 00:
Our chief argument is an argument discredited by FERC.

[00:20:58] Speaker 00:
And that is that we think that FERC violated the Sunshine Act when they permitted this pipeline in the manner in which they did it by notation.

[00:21:07] Speaker 06:
Well, how do you distinguish our precedent?

[00:21:10] Speaker 00:
OK.

[00:21:11] Speaker 00:
The central precedent that they use in y'all's cases here in the DC Circuit is the Communications Systems Inc versus Federal Communications Commission.

[00:21:22] Speaker 00:
I would say that's the seminal case.

[00:21:24] Speaker 00:
And even in their brief, FERC states that they have relied on that president for 35 years to support notational voting.

[00:21:33] Speaker 00:
Now, when that opinion was written, it's apparent from that opinion, because the Sunshine Act hadn't been around for very long, it even states that in the opinion, that they look to the legislative history of the passing of that legislation.

[00:21:50] Speaker 00:
Now, the Sunshine Act, as you know, was basically a result of the Watergate.

[00:21:56] Speaker 00:
The Ford administration came in and basically said, we want to do some legislation that makes, as Judge Brandeis said, brings to light.

[00:22:10] Speaker 00:
Sunlight is said to be the best disinfectant, and electric light the best policeman.

[00:22:15] Speaker 00:
Now, here's how that case is distinguished.

[00:22:18] Speaker 00:
In that opinion, they quote Congressman Walter Flowers from Alabama, who offered the original language that this court, the D.C.

[00:22:26] Speaker 00:
Circuit, noted that the amended subsection would not preclude agencies from disposing of non-controversial matters by written circulation.

[00:22:35] Speaker 00:
And that is our argument.

[00:22:37] Speaker 06:
This is a controversial matter.

[00:22:39] Speaker 00:
Yes, for four years we have fought this pipeline.

[00:22:43] Speaker 00:
I will tell you how controversial it is in the state of Georgia.

[00:22:46] Speaker 00:
Back in January, February of last year, legislation was being passed in the Georgia legislature, where basically what they do is they give approvals for different activities.

[00:22:59] Speaker 00:
And then this activity was for the pipeline company, Sable Trail, to go underneath the waterways in the state of Georgia.

[00:23:08] Speaker 00:
overwhelmingly, legislation was not passed to prevent them from doing that.

[00:23:15] Speaker 00:
Now, that shows that the majority of legislators in the state of Georgia were trying to prevent this pipeline from being constructed because they didn't have permission to go under the waterways.

[00:23:27] Speaker 00:
They couldn't construct the pipeline.

[00:23:29] Speaker 00:
Now, political things happen.

[00:23:31] Speaker 09:
Sable threatened to sue.

[00:23:33] Speaker 09:
I thought in our precedent that the Texas Railroad Commission case specifically disregarded that distinction you're making.

[00:23:40] Speaker 09:
It said it doesn't make that distinction between controversial and non-controversial.

[00:23:47] Speaker 09:
Did I read that wrong?

[00:23:49] Speaker 00:
I don't think so.

[00:23:50] Speaker 00:
And even the Amrep case that y'all had more recently,

[00:23:56] Speaker 00:
where Ambref made the procedural argument that it asserted that the commission's use of the written letter method in the case violated the Sunshine Act.

[00:24:04] Speaker 00:
It quotes back to

[00:24:06] Speaker 00:
communication system.

[00:24:08] Speaker 00:
But then it goes on to you to use one of the exceptions where the Sunshine Act doesn't apply.

[00:24:14] Speaker 00:
So it refers back to that commission, but then it goes further to say why in that case it didn't matter.

[00:24:22] Speaker 00:
So what we're basically asking this court to do my clients are is

[00:24:29] Speaker 00:
I mean, basically, in our opinion, the Sunshine Act has been being killed for 35 years because they have leapfrogged on that decision that was passed that specifically contained this language about disposing of non-controversial matters.

[00:24:47] Speaker 00:
So it's our request of this court, because what's going on here is they're circumventing the meeting process.

[00:24:54] Speaker 00:
They have to put out, as you're aware, a notice

[00:24:57] Speaker 00:
A Sunshine Act meeting notice.

[00:24:59] Speaker 00:
Okay.

[00:25:00] Speaker 00:
My clients had intended to, we all believed that the meeting that would have occurred approximately the second or third week of February was when this matter was going to be taken up by FERC.

[00:25:13] Speaker 00:
My clients and many others in South Georgia were intending to come to Washington when that happened.

[00:25:20] Speaker 00:
It didn't happen that way because on February 2nd, by notational voting, by basically the petition circulating around the office like a memo and being checked off, that's how they conducted the business on this super controversial issue.

[00:25:36] Speaker 00:
I'm sorry.

[00:25:38] Speaker 06:
Your clients were very much involved in this in terms of notice of the pipeline and opportunity to comment, et cetera.

[00:25:46] Speaker 06:
So the February notice that you referred to, did that notice say?

[00:25:50] Speaker 00:
I apologize.

[00:25:52] Speaker 06:
Go ahead.

[00:25:53] Speaker 00:
There was no February notice.

[00:25:54] Speaker 00:
That's just when the notational, when it was granted, the order was issued.

[00:25:59] Speaker 06:
That's why I want to understand your understanding of the act.

[00:26:03] Speaker 06:
Is your view that the commission must give prior notice that on a certain day it will take a vote in public on these applications?

[00:26:14] Speaker 00:
On a controversial issue, we believe so, Your Honor.

[00:26:16] Speaker 06:
I see.

[00:26:17] Speaker 00:
That's our opinion.

[00:26:18] Speaker 00:
And that's the way the law, I think, was written based on the legislative history.

[00:26:23] Speaker 06:
Any other circuits with you?

[00:26:26] Speaker 00:
No, Your Honor.

[00:26:27] Speaker 00:
But I think this is the seminal circuit on this issue of administrative law.

[00:26:32] Speaker 00:
And like I said, we were planning to come up there for that meeting, and then it didn't occur.

[00:26:38] Speaker 00:
And then we find out that it's been passed by notational procedure.

[00:26:43] Speaker 06:
So then you got an opportunity to file a petition for reconsideration.

[00:26:47] Speaker 00:
We did, Your Honor.

[00:26:48] Speaker 00:
And we raised that issue in our petition for rehearing.

[00:26:51] Speaker 00:
And that's our argument.

[00:26:54] Speaker 06:
So the votes were public in terms of the commissioners being identified as to who voted for.

[00:27:03] Speaker 00:
After the fact, yes, Your Honor.

[00:27:05] Speaker 00:
After the fact.

[00:27:06] Speaker 00:
After the fact.

[00:27:08] Speaker 06:
And on reconsideration, I'm just trying to understand here.

[00:27:12] Speaker 06:
Yes.

[00:27:14] Speaker 06:
You didn't point out any fraud

[00:27:20] Speaker 06:
conflict of interest.

[00:27:22] Speaker 00:
No, we're not intending any fraud or collusion on the part of the commission.

[00:27:27] Speaker 06:
So this is just a formality?

[00:27:31] Speaker 00:
Well, here's the question.

[00:27:34] Speaker 00:
If you look at the press club speech of the commissioner from exactly one year before this was notationally passed,

[00:27:46] Speaker 00:
She basically, I mean, in that quotation, she basically says, you know, it's becoming inconvenient for us to conduct our business by people coming that are objecting to these pipelines.

[00:28:00] Speaker 00:
That defeats the whole purpose in the Sunshine Act.

[00:28:02] Speaker 00:
If the Sunshine Act's purpose is to

[00:28:12] Speaker 00:
is entitling the public to the fullest practical information regarding the decision-making processes of the federal government, then excluding the public, then purposely excluding them by saying, hey, I've done a lot of county work for counties in Georgia, for Twix County, Small County, 10,000 people.

[00:28:33] Speaker 00:
We have an agenda we published before this meeting.

[00:28:35] Speaker 00:
It's a big deal what's on that agenda, because people come out if they want to argue about any little nominal thing.

[00:28:43] Speaker 00:
But in this case, you have a super controversial pipeline, 600 miles long, 36 inches wide, coming through people's neighborhoods.

[00:28:54] Speaker 00:
The potential for explosion is there.

[00:28:56] Speaker 00:
That's the type of case where they should be provided the opportunity.

[00:29:01] Speaker 00:
And I think that's what the Sunshine Act contemplated.

[00:29:05] Speaker 06:
I think we have your argument.

[00:29:07] Speaker 00:
Yeah, thank you very much.

[00:29:08] Speaker 06:
Thank you.

[00:29:10] Speaker 06:
All right, council for the commission.

[00:29:25] Speaker 08:
Thank you, Your Honors.

[00:29:26] Speaker 08:
Ross Fulton for the Commission.

[00:29:28] Speaker 08:
Your Honors, after a careful balancing here and a thorough environmental review, the Commission approved the project to issue because they found a public need for increased natural gas supplies in the Southeast, enhanced competition of protection against supply disruptions, and the fact that much of the natural gas from the projects would be offsetting the burning of higher emissions coal.

[00:29:48] Speaker 06:
So what do you do about these environmental justice communities which are inconvenient to the purpose?

[00:29:57] Speaker 08:
The commissions certainly did not find that they were inconvenient or a problem, Your Honor.

[00:30:02] Speaker 08:
Instead, the commission, in its discretion, decided to identify and assess the project's impacts on environmental justice.

[00:30:09] Speaker 06:
But you heard the discussion with Petitioners' Council.

[00:30:12] Speaker 06:
So how do you respond?

[00:30:14] Speaker 08:
I think there was a couple of issues there.

[00:30:16] Speaker 08:
So I'll start with, for instance, the comparison to alternatives.

[00:30:20] Speaker 08:
The commission's finding here was that, again, going to the standard of the executive order, it's disproportionately high in adverse effects.

[00:30:28] Speaker 08:
The commission found that this project would not have high adverse effects on environmental justice communities because it would not meet the extent or intensity criteria.

[00:30:37] Speaker 09:
What if it had moderate effect, but everywhere it was routed, it went through African-American communities?

[00:30:44] Speaker 09:
It's a hypothetical, I know, but how would you read the law then?

[00:30:50] Speaker 08:
So I think there's indication in the executive order itself at J1359 that if the project doesn't have high adverse effects, it therefore cannot have disproportionately high adverse effects.

[00:31:01] Speaker 09:
Okay, so in my hypothetical, it has moderate effects everywhere it goes.

[00:31:06] Speaker 09:
But the only place it goes are through black neighborhoods or Latino neighborhoods.

[00:31:11] Speaker 09:
Not a problem?

[00:31:13] Speaker 09:
Yes or no?

[00:31:13] Speaker 09:
Is that a problem or not?

[00:31:14] Speaker 09:
I think the commission, yes or no, is that a problem or not?

[00:31:17] Speaker 08:
Not under the standard of disproportionately adverse.

[00:31:20] Speaker 08:
Now, I think if I may explain a little bit, Your Honor, I think in that situation, what the executive order

[00:31:26] Speaker 08:
is seeking to do, and what the commission did here is identifying a set, so if that situation was presented to the commission, I presume the commission would do similar to what it did here with Dougherty County, which was most of the route was put within existing right-of-ways to minimize impacts on environmental justice communities, but in Dougherty, the commission found that

[00:31:47] Speaker 08:
doing so would actually put it near residential areas.

[00:31:50] Speaker 08:
So the route was actually changed from existing right-of-ways to minimize impacts on residential communities.

[00:31:56] Speaker 08:
As the commission talks about at 450 of the environmental impact study at J967, the compressor station originally was going to be in an environmental justice track.

[00:32:08] Speaker 08:
But based on collaboration between the pipeline and Sierra Club and others, the compressor station was actually moved out of the environmental justice track.

[00:32:16] Speaker 08:
which is now the situation that Sierra Club points to.

[00:32:20] Speaker 08:
But nonetheless, the commission did in fact study the effects of the compressor station and other aspects of the pipeline on Dougherty County and found that it would be within air and noise requirements and not have other impacts would rise to a high and adverse level.

[00:32:37] Speaker 06:
So what would you have to show in order to meet FERC standards?

[00:32:43] Speaker 08:
According to the commission, and I should note that the executive order and the EPA guidance provides discretion to the agencies to exercise informed... No question about it.

[00:32:53] Speaker 06:
The question is, how do you meet your burden?

[00:32:56] Speaker 06:
under the agency's standard?

[00:32:58] Speaker 08:
If you look at 3-217-837 of the record, the commission has a chart.

[00:33:05] Speaker 08:
To have a high inverse is particularly under the extended intensity.

[00:33:10] Speaker 08:
There needs to be a substantial change to the resource and have a region-wide impact.

[00:33:15] Speaker 06:
So if the community is suffering from asthma with 80% of its population, then it has to go up to 95%?

[00:33:23] Speaker 08:
I don't think that the commission put such sort of quantification on it.

[00:33:27] Speaker 06:
Well, that's why I'm trying to understand.

[00:33:28] Speaker 06:
How do you meet the burden to show an impact where, as you point out, the commission prefers to run the new pipelines alongside the old pipelines.

[00:33:40] Speaker 06:
So the old pipelines are already an adverse impact.

[00:33:47] Speaker 06:
So now we put another pipeline there.

[00:33:50] Speaker 06:
I'm just trying to understand I've never quite understood despite all the words what has to be shown once it's established that South Florida needs natural gas.

[00:34:06] Speaker 08:
Under NEPA your honor.

[00:34:08] Speaker 06:
Or at least it needs some alternative to fossil fuels not necessarily natural gas.

[00:34:16] Speaker 06:
but it's proposing natural gas.

[00:34:18] Speaker 08:
That's correct, Your Honor, and obviously the Commission does not control those decisions, but underneath... What decisions?

[00:34:24] Speaker 08:
...that Florida has made as terms of what types of energy supplies it needs and where to cite its utilities.

[00:34:30] Speaker 06:
Well, it could.

[00:34:32] Speaker 06:
Depending on other findings, it could deny the applications.

[00:34:37] Speaker 08:
It could, in your honor, the commission considered that in the no action and found that it would either not meet the purpose of the project or would have uncertain effects because the commission recognizes Florida wants to increase its natural gas supply.

[00:34:51] Speaker 08:
So there could be other things done that have comparable environmental impacts.

[00:34:55] Speaker 06:
But how about taking Judge Griffith's hypothetical and saying, not moderate, but great effect.

[00:35:05] Speaker 06:
And the only place the pipeline goes is through these environmental justice communities.

[00:35:12] Speaker 06:
And even though the EPA guidance suggests various things, the commission has decided in its discretion not to use the measurements that would be most direct.

[00:35:29] Speaker 06:
And here, the measurement was specifically proposed to the commission.

[00:35:34] Speaker 06:
So it could just say, well, we're not going to do it, because no one's proposed anything to us.

[00:35:41] Speaker 08:
I'm sorry.

[00:35:41] Speaker 08:
Could you repeat that, Your Honor?

[00:35:45] Speaker 06:
I guess I don't understand.

[00:35:46] Speaker 06:
I mean, you tell me they have discretion.

[00:35:50] Speaker 06:
Of course they have discretion.

[00:35:51] Speaker 06:
South Florida needs some new energy source, and it wants natural gas.

[00:35:58] Speaker 06:
And so it's inconvenient.

[00:36:01] Speaker 06:
that there are these environmental justice communities.

[00:36:05] Speaker 06:
And the fact that they are suffering health impacts at high rates isn't enough.

[00:36:13] Speaker 06:
I mean, I just wonder, have we written a lot of words, or the executive branch written a lot of words, but they have no real meaning?

[00:36:24] Speaker 08:
So I think a couple of points here, Your Honor.

[00:36:27] Speaker 08:
The Commission, again, to start with, the Commission undertook an extensive look at the environmental resources potentially affected by the project.

[00:36:38] Speaker 08:
The Commission found, for example, on water quality, groundwater, socioeconomic status, air and noise, the Commission found with its required mitigation, minimization, and avoidance techniques, those would not rise to significant impacts under NEPA.

[00:36:51] Speaker 08:
The commission then put that in the rubric of high and adverse.

[00:36:55] Speaker 08:
And the commission similarly found that those would not rise to the level of, to the intensity or extent.

[00:37:02] Speaker 08:
Now, in terms of, as your honor recognized, this is in areas the commission saw all the various alternatives all impacted a fair number of environmental justice communities.

[00:37:16] Speaker 08:
And the commission was sensitive to that.

[00:37:17] Speaker 08:
But in fact, contrary to what Sierra Club said,

[00:37:21] Speaker 08:
the commission considered with the Gulf of Mexico route, for instance, the impacts on environmental justice committees.

[00:37:29] Speaker 08:
So if you look for example,

[00:37:32] Speaker 08:
It's 412 J929.

[00:37:34] Speaker 06:
Did it consider the no action alternative?

[00:37:39] Speaker 08:
It did, Your Honor.

[00:37:40] Speaker 08:
In 4-3 J920, the Commission said that the no action would self-evidently impact less environmental resources, and that includes environmental justice communities.

[00:37:51] Speaker 08:
The commission, with the Gulf route noted, this route would affect nearly 300 miles less of environmental justice communities.

[00:37:58] Speaker 08:
So the commission's cognizant of the route's effects.

[00:38:02] Speaker 08:
But as with all alternatives, the commission has to balance those choices.

[00:38:08] Speaker 08:
And the commission found here, given A, that the impacts in the commission's understanding would not rise to the level of high and inverse.

[00:38:16] Speaker 08:
And the fact that the Gulf of Mexico route would not only cost 2.2 billion more, but bring in a whole host of marine effects that would not have been present.

[00:38:25] Speaker 06:
So I guess the question is, if the commission had used the data track, the census track data, would that have provided it with information that might have caused the commission to

[00:38:46] Speaker 06:
decide to grant the applications, but to add additional conditions of mitigation.

[00:38:53] Speaker 08:
I don't believe so here, Your Honor, because with respect to the specific area of Dougherty that Sierra Club points to, as I noted, the Commission recognized although it wasn't an environmental justice tract, the environmental impact statement nonetheless considered the effects in Dougherty County.

[00:39:09] Speaker 08:
It changed the route of the pipeline there so as to minimize the effects on residents, including environmental justice communities in that area, and it moved the compressor station.

[00:39:20] Speaker 08:
So the ultimate purpose of this executive order and the guidance is so that agencies are cognizant of the potential effects of a project on environmental justice communities.

[00:39:32] Speaker 08:
and ultimately here by using its discretion to consider the issue and address it where necessary to try to minimize those impacts.

[00:39:39] Speaker 08:
That's why the commission reasonably concluded that it would not be disproportionately high and adverse or significant.

[00:39:55] Speaker 08:
With respect to greenhouse gas, Your Honor, the Commission did in fact consider the downstream effects of the project.

[00:40:05] Speaker 08:
It found that it would lead to the distribution and consumption of about one million decotherms a day.

[00:40:10] Speaker 08:
And the Commission also recognized that greenhouse gas emissions are the primary source of climate change.

[00:40:18] Speaker 08:
But the Commission found that it would not meaningfully inform the Commission's decision to try to go further

[00:40:24] Speaker 08:
estimate the physical effects from power plants, not the pipeline, but from power plants burning the natural gas delivered at issue.

[00:40:32] Speaker 06:
And why?

[00:40:33] Speaker 08:
Two reasons, I think, Your Honor.

[00:40:35] Speaker 08:
A, based on this court's decision and Earth reports.

[00:40:38] Speaker 06:
Okay, so that's totally different, and we know why, and you know why.

[00:40:44] Speaker 06:
So here FERC has complete authority, all right?

[00:40:47] Speaker 06:
It knows precisely where the pipeline is going.

[00:40:50] Speaker 06:
It knows how much is being transmitted daily.

[00:40:53] Speaker 06:
It knows that on the two major, I don't know if they're pipelines, but the companies,

[00:41:00] Speaker 06:
that they have contracts, firm contracts for 95% of the natural gas and what is it, 83%, I mean very high percentages.

[00:41:11] Speaker 06:
So they know how it's going to be used, they know Florida, the Commission of Florida has told them and they have these contracts that are ready to roll and it has complete authority.

[00:41:23] Speaker 06:
And EPA wrote it and said,

[00:41:27] Speaker 06:
Burke, why aren't you looking at these options for measuring these emissions?

[00:41:32] Speaker 06:
And in reconsideration, the petitioners suggested some tools that were available.

[00:41:39] Speaker 06:
And Burke said we're just not going to do anything.

[00:41:45] Speaker 08:
So I think that there's

[00:41:47] Speaker 08:
not quite the direct linkage between the pipeline and power plants there are.

[00:41:53] Speaker 08:
For instance, the project is building a central hub for trading in natural gas.

[00:41:56] Speaker 08:
There's uncertainty regarding how much

[00:42:00] Speaker 08:
gas, the power plants that are proposed.

[00:42:02] Speaker 06:
But in the record, it tells me, FERC has told me exactly how much is going to be transmitted daily, and it's told me that the contracts are already signed, all right, for 95% or 83%, two contracts.

[00:42:19] Speaker 09:
It wouldn't have been hard to do, would it?

[00:42:23] Speaker 08:
I think it would not have been hard to do.

[00:42:25] Speaker 09:
With all that information readily available.

[00:42:28] Speaker 08:
It would not have been hard to do, but it would have been hard to do in a meaningfully informative way for this reason.

[00:42:34] Speaker 08:
The commission could have said X tons or X amount is going to these two proposed power plants.

[00:42:40] Speaker 08:
That will lead to the emission of X amount.

[00:42:43] Speaker 08:
But the problem is there is also a significant amount of that new gas is going to be offsetting coal.

[00:42:48] Speaker 06:
Oh, but there's a lot of carbon that's going to be emitted anyway.

[00:42:52] Speaker 06:
The offset is not 100%.

[00:42:54] Speaker 08:
But if we assume that it's 0%, that would not lead to a meaningfully informative number.

[00:43:01] Speaker 06:
But they couldn't say zero, because they know it's not 100% set off.

[00:43:06] Speaker 06:
So they could measure the difference.

[00:43:09] Speaker 08:
The Commission, in theory, could have provided with a wide range of caveats that we believe... What caveats?

[00:43:16] Speaker 08:
Well, there would be a big difference if natural gas was 30%, 40%, 50%, 60% on and on, offsetting the use of coal.

[00:43:24] Speaker 06:
The other thing I should point out is that... The Florida Commission has told the Commission, our fossil fuel plants are exhausted.

[00:43:35] Speaker 06:
The demand is growing.

[00:43:37] Speaker 06:
We need natural gas.

[00:43:39] Speaker 06:
So approve this pipeline.

[00:43:43] Speaker 06:
So not only did FERC know all that, I mean, what more did FERC have to know?

[00:43:50] Speaker 06:
All these other cases, there's been some excuse.

[00:43:52] Speaker 06:
We don't have the authority to make the final decisions.

[00:43:56] Speaker 06:
We don't know what's going to happen to the gases flowing through this pipeline.

[00:44:03] Speaker 06:
All those uncertainties are gone here.

[00:44:05] Speaker 08:
I think your Honor's point regarding the role of Florida here is an independent intervening actor, such as in Sierra Club or Public Citizen, because— Public Citizen, the agency didn't have the authority, all right?

[00:44:19] Speaker 06:
Here, the agency has the authority.

[00:44:21] Speaker 08:
The agency does, just like the FERC did in Sierra Club, but where there, there was the Department of Energy, a federal agency— We don't have that issue here.

[00:44:29] Speaker 08:
We have a state agency.

[00:44:30] Speaker 06:
The Florida Public— Florida can't overrule.

[00:44:33] Speaker 06:
Florida is asking.

[00:44:35] Speaker 06:
the commission to support these applications.

[00:44:38] Speaker 06:
It's not intervening as a cause.

[00:44:41] Speaker 08:
It's instructed the pipelines it's approving to obtain natural gas supplies and to burn natural gas.

[00:44:49] Speaker 06:
In other words, Council, what I'm trying to understand is when would FERC ever have enough information and enough certainty to think that it was required

[00:45:02] Speaker 06:
to use these tools to measure carbon dioxide emissions.

[00:45:08] Speaker 08:
I should distinguish, Your Honor, that the claim brought by Sierra Club is not to the emissions, it's brought to Sierra Club wants the Commission to go the further step and measure the physical effects on the environment.

[00:45:19] Speaker 06:
But first they have to measure.

[00:45:21] Speaker 08:
They'd have to measure emissions.

[00:45:23] Speaker 06:
So you can't even get there?

[00:45:25] Speaker 08:
Correct.

[00:45:25] Speaker 08:
But Sierra Club didn't say just measure emissions.

[00:45:27] Speaker 08:
They said, we want you to go to the next step and measure physical effects on the environment.

[00:45:31] Speaker 08:
What do you think that meant?

[00:45:34] Speaker 08:
I think that meant using a tool such as a social cost of carbon.

[00:45:38] Speaker 06:
And why couldn't the commission use that?

[00:45:40] Speaker 08:
Well, as the commission explained, it was upheld in Earth Reports.

[00:45:45] Speaker 06:
Totally different case, all right?

[00:45:46] Speaker 06:
The Department of Energy was in charge.

[00:45:49] Speaker 06:
Here, FERC is in charge.

[00:45:50] Speaker 08:
It's different in that sense, Your Honor, but the Commission there still provided a rationale for why it believed the social cost of carbon tore.

[00:45:57] Speaker 09:
And I thought, I shouldn't speak for Sierra Club, but I thought they asked for both.

[00:46:01] Speaker 09:
And I thought that was the question that I asked your opposing counsel.

[00:46:06] Speaker 09:
And set up the question of what, if we disagree with you, that there are links to specific climate change events,

[00:46:15] Speaker 09:
Is there still a reason for FERC to do the calculation and tell the world, with the caveats that you identified, what the emissions will be?

[00:46:28] Speaker 09:
And you're saying no.

[00:46:29] Speaker 09:
Yes, Your Honor, because the Commission... And let's say, I agree with you that you can't make the link between specific climate events.

[00:46:39] Speaker 09:
Let's say I agree with you on that.

[00:46:40] Speaker 09:
Isn't there still a reason

[00:46:42] Speaker 09:
to do the calculation and let the public know, let the decision makers know what the emissions effect of greenhouse gas will be.

[00:46:51] Speaker 08:
The Commission did not believe there was because they did not believe there was a standard methodology.

[00:46:56] Speaker 06:
The Commission thought that the Commission's baseline determination is... That's what they said in Earth reports, but since then,

[00:47:04] Speaker 06:
the Department of Energy report has come out.

[00:47:07] Speaker 06:
And that's what was twice referred to the commission by EPA, saying, look at this report.

[00:47:13] Speaker 06:
Read this report.

[00:47:15] Speaker 06:
This tells you how to go about the measurements.

[00:47:19] Speaker 06:
And FERC didn't do it.

[00:47:20] Speaker 08:
The draft guidance, which was what was before the commission at the time, provides discretion to agencies to make reasonable determinations as to what would meaningfully inform the decision and be

[00:47:34] Speaker 08:
The commission here's baseline determination was that this project would not substantially contribute to greenhouse gas.

[00:47:41] Speaker 06:
But it didn't know.

[00:47:44] Speaker 08:
It did, Your Honor.

[00:47:45] Speaker 08:
It took an qualitative basis.

[00:47:47] Speaker 08:
It determined.

[00:47:48] Speaker 06:
It said, well, Florida won't be burning coal anymore.

[00:47:53] Speaker 06:
All right.

[00:47:56] Speaker 06:
End of discussion.

[00:47:58] Speaker 08:
In addition to the fact that for the two plants that the commission knew about, yes, the citrus and Okeechobee, those plants are going to be replacing coal.

[00:48:06] Speaker 08:
As the DOE study site to your honor says, that cuts emissions in over half.

[00:48:12] Speaker 06:
And there's 50% left.

[00:48:15] Speaker 08:
And for any future plants that may be using the project, those are going to be subject to federal and state permitting to meet certain emission standards.

[00:48:25] Speaker 06:
So FERC just doesn't have to do its

[00:48:28] Speaker 06:
because it thinks somebody else will.

[00:48:31] Speaker 08:
Not quite, Your Honor.

[00:48:32] Speaker 08:
The Commission, at this point in time, just doesn't know what these future plans would look like in terms of how they would actually use the gas, let alone what they would be.

[00:48:44] Speaker 06:
It would just be speculative to... They're not going to sign contracts.

[00:48:47] Speaker 06:
95%.

[00:48:48] Speaker 08:
But this is referring to the actual plants that FPL or Duke would choose to build, not just the fact that they've agreed to accept the natural gas.

[00:48:58] Speaker 08:
Again, NEPA is not going to the outcomes.

[00:49:01] Speaker 08:
It's just trying to bring in the filial form here.

[00:49:03] Speaker 08:
And here, the commission believes that because it's natural gas replacing coal, it is not.

[00:49:09] Speaker 06:
Because it's going to be 50% better, we don't need to worry about the residual 50%.

[00:49:16] Speaker 08:
I think the commission is worrying about it.

[00:49:18] Speaker 08:
I think that's why the commission is looking, does an extensive review of the type of consumption and distribution that the project will cause and the effects of global warming in the region.

[00:49:30] Speaker 08:
It just isn't taking the further step.

[00:49:35] Speaker 09:
Can I ask you a question about the capital structure issue?

[00:49:39] Speaker 09:
Is it your position that you can justify a particular capital structure on the grounds that it was already approved elsewhere?

[00:49:47] Speaker 09:
It's already been used before?

[00:49:48] Speaker 08:
The commission's position is that the commission has established a policy for the 14% with at least 50% debt, and that's basically based on two

[00:49:58] Speaker 08:
Ultimately, this is a market-based decision.

[00:50:02] Speaker 08:
But the commission's looking at past new pipelines and asking itself, what have investors required to get a sufficient rate of return in those cases, but at the same time, keeping a reasonable rate for customers?

[00:50:15] Speaker 08:
And the commission in previous is building upon its past precedent.

[00:50:19] Speaker 08:
So in previous cases.

[00:50:20] Speaker 09:
So what I hear you saying then is that in a particular case in front of it, it doesn't have to justify

[00:50:27] Speaker 09:
that rate structure based on the circumstances presented before it.

[00:50:35] Speaker 08:
So for new Greenfield pipelines, the Commission has set a general policy and has determined it doesn't for that particular pipeline, doesn't necessarily need to get into the

[00:50:44] Speaker 08:
particulars.

[00:50:45] Speaker 09:
Yeah, how much the authority for that?

[00:50:47] Speaker 09:
Because I thought each case was supposed to be taken on its own.

[00:50:51] Speaker 08:
Well, that's the reason the commission's established a policy.

[00:50:54] Speaker 08:
So for example, in Constitution, which is 149 FERC 61999, the commission notes that its new pipeline policy is based upon the regulatory contractual construction risks that new pipelines face.

[00:51:07] Speaker 08:
namely the uncertainty with obtaining approval.

[00:51:11] Speaker 09:
Without any regard to the particular case in front of it, the unique circumstances of this particular pipeline, you don't have to, your first position is we don't have to look at that.

[00:51:22] Speaker 08:
I don't think that's the position.

[00:51:24] Speaker 08:
I think the position is as a base.

[00:51:25] Speaker 09:
Well, that's what happened here, right?

[00:51:26] Speaker 08:
Well, I think the baseline, Your Honor, is the Commission's sort of default, is that the policy applies.

[00:51:33] Speaker 08:
Now, if there were particular facts brought to their attention, then they may deviate from the policy or come to an alternative here.

[00:51:41] Speaker 08:
So it's the burden.

[00:51:44] Speaker 06:
It's a rebuttable presumption.

[00:51:46] Speaker 06:
Everybody gets 14.5%.

[00:51:50] Speaker 08:
That is essentially how I read it, Your Honor.

[00:51:52] Speaker 08:
And that is, again, that's just at the initial Section 7 stage, and that's subject to review for adjusting reasonable rates.

[00:52:00] Speaker 08:
So at this point, we don't have a lot of evidence, since it's a new pipeline without any sort of actual capital returns or

[00:52:09] Speaker 08:
it's not even, you know, the gas is not flowing.

[00:52:12] Speaker 08:
So once that is happening, the Commission obtains a lot more information and evidence about what would actually be necessary for this particular case.

[00:52:20] Speaker 08:
And so that's why it works off a baseline assumption.

[00:52:22] Speaker 06:
So somebody has to file a complaint or the Commission's responde has to act?

[00:52:28] Speaker 08:
Both.

[00:52:28] Speaker 08:
So the commission has to sue a sponte act within three years.

[00:52:32] Speaker 08:
But in that time, anyone can file a complaint.

[00:52:36] Speaker 06:
Right.

[00:52:37] Speaker 06:
So I'm a rate payer.

[00:52:38] Speaker 06:
And for three years, I've been paying these rates based on this 14.5% ROE.

[00:52:44] Speaker 06:
And then another two years will pass and another three years by the time the appeals are resolved.

[00:52:51] Speaker 06:
And of course, no full retroactive refund process.

[00:52:58] Speaker 06:
So, you know, I'm a corporation, and I set up another corporation that's going to be the owner of this pipeline, and everything's new, because I know I'm going to get 14.5%.

[00:53:12] Speaker 06:
Is that the way you read the cases?

[00:53:17] Speaker 08:
I read the cases as having established that a 14% return with at least 50% debt is, at least as a sort of

[00:53:27] Speaker 08:
Beginning step, the commission has determined through its adjudication of numerous pipelines that this creates a reasonable rate of return to attract new investors to a new pipeline, but at the same time... So we don't care really anything about the parent company, says Burke.

[00:53:46] Speaker 08:
The commission has determined that it can use a hypothetical capital structure here, because the parents, as an existing entity, isn't necessarily, it's not an apples to apples comparison to a new pipeline.

[00:53:59] Speaker 06:
The commission could... So it would be impossible to rebut the 14%, would it?

[00:54:06] Speaker 06:
I mean, what could you rebut it with?

[00:54:09] Speaker 08:
I think, for instance, you could, so to my point about what was said in the Constitution case, if you introduce evidence that something about the, for instance, contractual or construction risks that are with a general pipeline in a specific case, perhaps those don't exist for any number of reasons, you know, large locked-in contracts, construction is

[00:54:34] Speaker 08:
is easier for whatever reason.

[00:54:37] Speaker 08:
But I guess my ultimate point would be before the commission here, that argument was never raised.

[00:54:42] Speaker 08:
And it's not raised on appeal either that the commission lacks substantial evidence.

[00:54:46] Speaker 08:
There's complaints about how the commission followed its policy here, but there's not complaints about that the commission's determination was not supported by substantial evidence or that the commission should have.

[00:54:57] Speaker 06:
No, but did it give a reasoned basis?

[00:54:59] Speaker 06:
It said we've done it before.

[00:55:03] Speaker 08:
Well, the commission says that while citing an extensive amount.

[00:55:08] Speaker 08:
And the commission didn't just approve it here, I should note.

[00:55:10] Speaker 08:
The commission, in fact, reduced the proposal by Sable Trail to lower rates for consumers.

[00:55:18] Speaker 06:
All right.

[00:55:18] Speaker 06:
Anything further, Council?

[00:55:25] Speaker 08:
Only, I guess, with respect to notational voting here,

[00:55:29] Speaker 08:
The commissions gave an extensive opportunity for parties to participate.

[00:55:35] Speaker 08:
It held dozens of public hearings.

[00:55:37] Speaker 08:
It gave no disinterested parties.

[00:55:39] Speaker 08:
And this, in fact, GBA, as an active participant, had the route, in fact, altered in response to its concerns.

[00:55:48] Speaker 09:
Did you agree with their reading of our precedent?

[00:55:51] Speaker 08:
I do not, Your Honor, now.

[00:55:52] Speaker 08:
I read Texas Railroad Commission as stating that notational voting is acceptable under the Sunshine Act, and there's no distinction between quote unquote controversial and non-controversial cases, but it's instead an acceptable policy.

[00:56:06] Speaker 06:
All right.

[00:56:07] Speaker 06:
Thank you.

[00:56:07] Speaker 06:
Thank you, Your Honor.

[00:56:12] Speaker 06:
Council for Intervene.

[00:56:24] Speaker 03:
If I could start with the greenhouse gas issues and focus on the question of causation.

[00:56:32] Speaker 03:
I think that the causal arrow here runs the opposite direction.

[00:56:35] Speaker 03:
The cause of these power plants and emissions associated with that is economic and population growth in Florida, decision by the Florida Public Service Commission to choose a certain kind of fuel to fuel power plants.

[00:56:48] Speaker 03:
and decisions by the relevant federal and state agencies about how those power plants will be built and operated.

[00:56:55] Speaker 03:
And if you look at JA 910 to 911, it discusses the Duke Citrus plant and talks about the authorizations from the Public Service Commission and the other federal agencies, not the commission, that have authority over the licensing and operation of the power plant.

[00:57:11] Speaker 06:
So the EPA was just wrong when it told FERC to go ahead and measure this.

[00:57:18] Speaker 03:
Well, I think it's important to differentiate between EPA's comments on the draft environmental impact statement.

[00:57:24] Speaker 06:
But it came back a second time.

[00:57:26] Speaker 03:
They did.

[00:57:27] Speaker 03:
But they also acknowledged that the commission took into account the EPA comments.

[00:57:32] Speaker 03:
And that, I would submit, is all that NEPA requires.

[00:57:35] Speaker 03:
NEPA doesn't require the commission to comply with everything that EPA asks for.

[00:57:40] Speaker 06:
Of course not.

[00:57:41] Speaker 06:
But the question is, why didn't it do it?

[00:57:44] Speaker 06:
It can point to 5,000 other causes.

[00:57:48] Speaker 06:
It's raining, it's hot in Florida, things like that.

[00:57:54] Speaker 06:
Question here is you've got these pipelines that South Florida wants.

[00:58:00] Speaker 06:
You've got contracts lined up for nearly all the capacity.

[00:58:07] Speaker 06:
FERC has full authority as to whether or not to grant or deny these applications.

[00:58:14] Speaker 03:
And all of that was true in Earth reports.

[00:58:17] Speaker 03:
FERC had the authority to grant or deny the export facility.

[00:58:21] Speaker 06:
Ah, but we held that DOE was the final decision maker on authorizing imports and exports, all right, so that FERC didn't have the authority.

[00:58:35] Speaker 03:
And I would respectfully submit the same is true here.

[00:58:37] Speaker 03:
FERC has no authority over the power plants.

[00:58:39] Speaker 03:
And Florida Power and Light and Duke.

[00:58:42] Speaker 06:
It can shut down the pipeline.

[00:58:43] Speaker 03:
Well, it could deny the certificate, I suppose.

[00:58:46] Speaker 06:
So what do you suppose?

[00:58:47] Speaker 06:
That's what's before the commission, the application for the certificates of convenience and necessity.

[00:58:55] Speaker 06:
FERC could deny them.

[00:58:56] Speaker 03:
As FERC could have done in Earth reports, it could have denied authorization to build the physical facilities required to actually do it.

[00:59:02] Speaker 06:
If you're going to rely on Earth reports, you know what I'm going to say about reliance on that case.

[00:59:07] Speaker 06:
All I'm saying is FERC

[00:59:10] Speaker 06:
It's not in the same situation vis-a-vis another federal agency.

[00:59:15] Speaker 03:
Well, JA 910-911 talks about the other federal agencies, EPA, the Fish and Wildlife Service, the Army Corps, that have permitting authority over the power plants.

[00:59:25] Speaker 03:
And so I would submit that if your concern is other federal agencies being involved,

[00:59:31] Speaker 03:
And I won't push the point too hard, but I don't take Earth reports for the causation analysis to depend on the identity of the other actor to say that it has to always be better.

[00:59:40] Speaker 09:
You're just saying in this case it was Florida.

[00:59:42] Speaker 09:
Florida was the DOE.

[00:59:43] Speaker 03:
That's right.

[00:59:43] Speaker 03:
And frankly, Florida Power and Light and Duke are going to keep the lights on whether or not this pipeline gets built.

[00:59:49] Speaker 03:
And you see in the alternatives analysis that FERC did in its environmental assessment that there are alternatives.

[00:59:56] Speaker 06:
Why would it do that?

[00:59:59] Speaker 03:
I'm sorry, why would it?

[01:00:01] Speaker 06:
You said regardless of whether FERC approves these applications or not, Duke is going to keep the lights on in Florida.

[01:00:07] Speaker 03:
Because it is a utility charged with doing so, with serving its customers.

[01:00:15] Speaker 03:
Under what laws?

[01:00:16] Speaker 03:
Well, under the relevant state laws that govern utilities.

[01:00:20] Speaker 03:
I mean, this is why I think this is in some ways the tail wagging the dog.

[01:00:25] Speaker 06:
But Council, that's what we've heard about.

[01:00:29] Speaker 06:
argument here as to where somebody has tried to identify a responsibility that FERC has, and FERC has a major role to play.

[01:00:39] Speaker 06:
It can't be denied.

[01:00:41] Speaker 06:
If FERC was unimportant, you would not have sought its approval of these applications.

[01:00:47] Speaker 03:
That is true.

[01:00:48] Speaker 03:
I guess if you're not satisfied with the causation analysis, I would just point out that I think the obligation under NEPA is to analyze effects, impacts on the environment.

[01:00:58] Speaker 06:
And so there is an obligation to get the information that it needs and the public needs, right?

[01:01:08] Speaker 06:
So it can make it.

[01:01:10] Speaker 06:
So the agency involved can make an informed decision, right?

[01:01:14] Speaker 03:
And I would submit that's what the commission did here.

[01:01:16] Speaker 03:
In Earth reports, this court upheld the proposition that there was no generally accepted methodology to connect marginal emissions with specific climate impacts.

[01:01:27] Speaker 06:
But we're talking not marginal here, and we're talking after

[01:01:32] Speaker 06:
The DOE report of 2014 is available.

[01:01:35] Speaker 06:
And EPA has pointed this out not once, but twice to FERC.

[01:01:42] Speaker 06:
And the petitioners in their petition for reconsideration pointed out these tools.

[01:01:48] Speaker 06:
And so this is not a case where they don't know if there are tools available.

[01:01:53] Speaker 06:
And I thought Judge Griffith's question was right on.

[01:01:56] Speaker 06:
I mean, is it difficult to do?

[01:02:00] Speaker 03:
So FERC did cite the life cycle analysis, and it cited the key quantitative conclusion from that life cycle analysis at JA917.

[01:02:09] Speaker 03:
So it's not like FERC ignored that.

[01:02:11] Speaker 03:
The question was, is it within the deferential standard review and the substantial leeway that the agency has in choosing the methodology about how to consider these effects,

[01:02:24] Speaker 03:
Did FERC, was FERC arbitrary and capricious?

[01:02:26] Speaker 03:
Was it outside the bounds of DEFREC?

[01:02:28] Speaker 09:
I don't understand the resistance to this.

[01:02:30] Speaker 09:
Again, would it create some horrible precedent if you were to say to FERC, you've got all this information together, not just in the calculations and let the public know what the greenhouse gas emissions will be from

[01:02:43] Speaker 09:
the plant when it's up and running.

[01:02:45] Speaker 09:
With all the caveats, we understand, it's not, we're forecasting.

[01:02:49] Speaker 09:
Speculation plays, can play a role in the forecasting, right?

[01:02:53] Speaker 09:
Can't be too wild.

[01:02:54] Speaker 09:
But what's the, there must be something that I'm not understanding that maybe you can help me understand, because there's such resistance to this,

[01:03:04] Speaker 09:
on something that seems fairly easy to do.

[01:03:07] Speaker 09:
So what am I missing?

[01:03:09] Speaker 03:
Well, if I could respond in two ways.

[01:03:10] Speaker 03:
One is, I don't think it's as easy as everyone suggests.

[01:03:13] Speaker 03:
And two, you have a... What I'm saying is...

[01:03:19] Speaker 09:
You're saying it's difficult for them to estimate what the greenhouse gas emissions will be from the operable plant?

[01:03:28] Speaker 03:
Well, I would suggest that- Burning the natural gas?

[01:03:30] Speaker 03:
Is that- I think the relevant question is- Coming out of a smoke stack.

[01:03:34] Speaker 03:
Yeah, right.

[01:03:35] Speaker 03:
I think the relevant question is, what are the emissions caused by and reasonably foreseeable result of the action the commission is taking, which is approving the pipeline and its associated facility?

[01:03:45] Speaker 09:
And I'm asking something far more modest.

[01:03:47] Speaker 09:
Here's the plant.

[01:03:49] Speaker 09:
There's the smoke.

[01:03:50] Speaker 09:
What are the emissions?

[01:03:51] Speaker 09:
And that seems to me that's an indirect effect of granting the license, and it's not hard to figure out or let people know that there's resistance to it.

[01:04:03] Speaker 03:
Well, so one, I think those are the kinds of determinations that the air permit and the agencies that have responsibility for licensing the plant would do.

[01:04:12] Speaker 03:
I think with respect to authorizing the pipeline, there is a somewhat reductionist view of what the purpose of this project is.

[01:04:19] Speaker 03:
The purpose is not just to provide gas to serve these power plants.

[01:04:23] Speaker 03:
This is a project that provides access to a more diverse array of gas, and it provides protection against supply disruptions, and it creates a new central Florida hub, which allows additional trading.

[01:04:35] Speaker 06:
More gas for southern Florida.

[01:04:38] Speaker 06:
That's what this pipeline is all about.

[01:04:40] Speaker 03:
That's correct, because there was a decision made by other agencies and the Florida Public Service Commission to do that.

[01:04:47] Speaker 03:
I think I'm not aware of a decision of this court that requires an agency to quantify a particular omission for its own sake.

[01:04:55] Speaker 03:
And the question is, what are the impacts?

[01:04:57] Speaker 03:
And I think it would be a divergence from Earth Reports to say that FERC was required to try to make that causal connection here.

[01:05:04] Speaker 03:
On the question, Judge Griffith, of why resist, I mean, we have multiple hundreds pages environmental impact statement.

[01:05:12] Speaker 03:
We have a process that's been going on in front of the commission for years and years with extensive engagement with relevant communities.

[01:05:19] Speaker 03:
And there is a concern to those who have to finance and develop projects that if NEPA becomes sort of a fly-specking exercise, there is always something you can find.

[01:05:28] Speaker 06:
This is not fly-specking, Council.

[01:05:30] Speaker 06:
50% per Council acknowledged.

[01:05:34] Speaker 06:
All right?

[01:05:36] Speaker 06:
Anyway, tell us about the 14 and a half percent of you.

[01:05:41] Speaker 03:
So I think the key point is that what FERC is trying to do is have a policy that looks to the relevant market to provide a return on equity, or to use a return on equity in the calculation of relevant rates that provides a sufficient return to investors.

[01:05:59] Speaker 03:
And at paragraph 117 of the certificate order, FERC specifically noted that this was a Greenfield pipeline.

[01:06:06] Speaker 03:
And the precedence it cited, and I think you can fairly say incorporated by reference,

[01:06:11] Speaker 03:
I would submit, view that as the relevant feature of this project.

[01:06:15] Speaker 03:
And there are many risks associated with financing and developing of high finance we see here today.

[01:06:22] Speaker 03:
And so I think this is not a point, this is not a question of the commission just sort of blindly pointing to old precedents, incorporating the key rationale.

[01:06:34] Speaker 03:
there is a benefit in providing this stability and predictability with respect to a market-based approach.

[01:06:41] Speaker 06:
So I can understand how your client could come to FERC and say, look, this is so risky.

[01:06:47] Speaker 06:
There are all kinds of problems with the economy.

[01:06:50] Speaker 06:
I need a 20% return on equity.

[01:06:53] Speaker 06:
I get that.

[01:06:54] Speaker 06:
I don't understand how you ever get below 14% under your analysis.

[01:07:03] Speaker 03:
Well, the commission's policy, if I understand it, is 14% with 50-50 debt and equity.

[01:07:10] Speaker 03:
And debt is generally understood to be less expensive for rate payers, in part because the interest on debt payments is deductible.

[01:07:18] Speaker 03:
So FERC's policy, and there are cases cited that involve a higher debt ratio, which I think could result in a lower net return on equity, since it's a multi-factor.

[01:07:31] Speaker 03:
part equity, part debt.

[01:07:33] Speaker 06:
So you read our precedent as endorsing this type of approach?

[01:07:39] Speaker 03:
I guess a few things.

[01:07:40] Speaker 03:
One, this is an arbitrary and capricious standard of review, so the commission has some leeway in this very, very technical area of setting rates.

[01:07:49] Speaker 06:
Arbitrary and capricious or contrary to law?

[01:07:54] Speaker 03:
That's, I guess, that's correct.

[01:07:57] Speaker 06:
I'm not sure what the... The law is, what does our precedent require?

[01:08:01] Speaker 03:
So I take North Carolina to be the key case from this court.

[01:08:07] Speaker 03:
And that case involved an existing pipeline, not a new pipeline, and specifically, I think, carved out the approach that the commission took in this case.

[01:08:15] Speaker 03:
So I think it's a fair application of North Carolina.

[01:08:19] Speaker 06:
So there, it had a lot of data.

[01:08:22] Speaker 06:
All right.

[01:08:23] Speaker 06:
Here it has none.

[01:08:25] Speaker 06:
I'm just trying to contrast.

[01:08:28] Speaker 06:
So it can make a determination where it has a lot of data.

[01:08:34] Speaker 06:
And so it says, even though we don't have any data, you get the same.

[01:08:39] Speaker 03:
Well, you have the data.

[01:08:41] Speaker 03:
The reason you don't have data is that North Carolina was a case involving an operating pipeline, and these are cost-based rates.

[01:08:47] Speaker 03:
We don't have any of that because the pipeline hasn't entered service.

[01:08:49] Speaker 06:
That's why I didn't think North Carolina was particularly helpful.

[01:08:52] Speaker 09:
Right.

[01:08:53] Speaker 09:
Well, I guess it's helpful.

[01:08:54] Speaker 09:
Is there a need for substantial evidence, though, to support?

[01:08:58] Speaker 09:
the determination here?

[01:09:00] Speaker 09:
And if so, where is the substantial evidence?

[01:09:02] Speaker 03:
So, I mean, obviously, the relevant certificate applicants provided in their application requested a certain return on equity.

[01:09:11] Speaker 03:
I think, I'm not sure there's a substantial evidence claim properly before this Court, but that's your...

[01:09:17] Speaker 03:
I won't push it further than that.

[01:09:19] Speaker 09:
Why don't you push that?

[01:09:21] Speaker 09:
Why don't you think it's safe?

[01:09:23] Speaker 03:
I don't read the opening brief as raising that.

[01:09:26] Speaker 03:
You took the reply brief.

[01:09:27] Speaker 03:
Right.

[01:09:27] Speaker 03:
But you typically don't consider claims raised for the first time on reply.

[01:09:31] Speaker 03:
But I guess I would submit that in a new pipeline case where you do not have any cost-based data, the relevant fact or evidence is that it is a new greenfield pipeline.

[01:09:43] Speaker 03:
the commission can rely on that in fact and rely on its precedent in the sports on the discretion that is at least until now available so when it identifies greenfield pipeline what is it telling us uh... means telling you that it's a new pipeline that doesn't exist and so there's a certain

[01:10:03] Speaker 03:
lengthy process as you now can see involved in getting from application we'd like to build this to the pipeline actually enter service so that revenue starts coming back from the shippers who have signed a contract for the pipeline.

[01:10:19] Speaker 06:
I know, but you understand what I'm getting at.

[01:10:21] Speaker 06:
Okay, so where does that take me?

[01:10:24] Speaker 03:
I guess it takes you to the market, which is what have investors required in other projects that involve, I mean there are certain similarities when you're building a linear infrastructure project like this and certain issues.

[01:10:35] Speaker 06:
So you look at what the return has been on these operating pipelines?

[01:10:40] Speaker 03:
No, so in this case, FERC cited other FERC precedents that involved greenfield pipelines and what the return was needed in those cases as the Constitution, a case that Mr. Fulton cited.

[01:10:52] Speaker 06:
So does it matter at all what the status of the economy is?

[01:11:01] Speaker 03:
I think that is built into citing recent decisions by the Commission building other.

[01:11:06] Speaker 06:
Well, but you know, 2008 was a very different year.

[01:11:10] Speaker 06:
That's all I'm trying to understand.

[01:11:17] Speaker 03:
Go ahead.

[01:11:18] Speaker 03:
No, I think the answer is it's built into what I mean, the best evidence is what other investors have required it to make.

[01:11:25] Speaker 03:
I mean, this is not buying one share of GE stock.

[01:11:28] Speaker 03:
I mean, these are risky investments, more so than that.

[01:11:31] Speaker 06:
Nice return.

[01:11:32] Speaker 03:
Well, I mean, I think it's important to remember that

[01:11:40] Speaker 03:
This is a consistent commission policy.

[01:11:43] Speaker 03:
There's usually a virtue in taking a consistent approach.

[01:11:45] Speaker 06:
So when we say what other investors have required, we're talking about what the lending institutions charge?

[01:11:54] Speaker 03:
Well, I guess lending would be the debt component of the return on equity.

[01:11:58] Speaker 06:
So tell me what we're talking about.

[01:11:59] Speaker 03:
Well, we're talking about other investors who take an equity interest in a new pipeline and the risks that are associated.

[01:12:07] Speaker 06:
It's not Ma and Paul Jones buying a couple

[01:12:10] Speaker 06:
shares of Duke Energy.

[01:12:12] Speaker 03:
Who is it?

[01:12:13] Speaker 03:
I mean, the owners of this project include Duke and Florida Power and Light and other companies.

[01:12:22] Speaker 03:
That's correct.

[01:12:23] Speaker 03:
But these are billion dollar projects.

[01:12:25] Speaker 06:
That's my point.

[01:12:26] Speaker 06:
So it's not an incestuous situation.

[01:12:31] Speaker 06:
But clearly, if the three of us are pipeline companies, we're looking out for each other.

[01:12:40] Speaker 06:
Well, these are... That's all I'm trying to understand what's going on here.

[01:12:46] Speaker 06:
I guess... I mean, you say, what other investors have required?

[01:12:51] Speaker 06:
Well, the Griffin plant requires no less than 16%.

[01:12:55] Speaker 06:
Brown plant requires no less than 16%.

[01:13:00] Speaker 06:
So I want 16%.

[01:13:01] Speaker 06:
I mean, isn't that what's going on here?

[01:13:05] Speaker 03:
I think what's going on is the commission is charged with making these determinations.

[01:13:10] Speaker 06:
It doesn't give us much to go on, does it?

[01:13:13] Speaker 06:
So it's 50% 14 ROE.

[01:13:20] Speaker 03:
If I could make two quick points about the environmental justice component.

[01:13:28] Speaker 03:
I think it's important to remember this is a NEPA claim.

[01:13:31] Speaker 03:
They are not raising a claim under the executive order or the guidance.

[01:13:34] Speaker 03:
And Judge Griffith, your question, what if there were moderate effects all along the pipeline route?

[01:13:39] Speaker 03:
I don't believe that would be a violation of NEPA.

[01:13:42] Speaker 03:
So long as the agency acknowledged those effects,

[01:13:45] Speaker 03:
and disclosed them in its NEPA analysis.

[01:13:48] Speaker 03:
I mean, it is true with respect to environmental effects.

[01:13:51] Speaker 03:
An agency can choose the most environmentally impactful route, as long as it has considered all the effects.

[01:13:58] Speaker 03:
The commission looked in great detail at the effects on the communities within a one-mile radius of the Albany compressor station.

[01:14:06] Speaker 03:
And you can see that, Pat.

[01:14:09] Speaker 03:
Well, you could see it in a couple of places.

[01:14:15] Speaker 03:
There's maps in the environmental impact statement, and they specifically looked this number of feet to this particular mobile home park, this number of miles to this church, and they acknowledged at JAA 837 a relatively high degree of minority and low-income communities crossed or within one mile.

[01:14:32] Speaker 03:
of the route or compressor station.

[01:14:34] Speaker 03:
And the commission walked through every possible impact at those distances.

[01:14:39] Speaker 03:
So put aside anything about census tracks or census blocks.

[01:14:42] Speaker 03:
This is actual physical distance from the compressor station.

[01:14:45] Speaker 03:
And it looked at air emissions, including the higher incidence of asthma on African-American communities, and said that there would be no significant effects and no violations of any of the relevant air quality standards.

[01:14:56] Speaker 06:
What do you think significant effects mean?

[01:14:59] Speaker 03:
Well, the CEQ regulations provide sort of a laundry list of significant factors.

[01:15:05] Speaker 06:
I know, but 85% of the community is suffering from asthma because of this other facility that it's causing.

[01:15:11] Speaker 03:
Well, so the commission did a few things.

[01:15:13] Speaker 03:
One was it acknowledged that the relevant ambient air quality standards by law are required to be protective of human health and welfare with a margin for safety.

[01:15:21] Speaker 03:
So this is a statutory requirement, and it found that none of those went

[01:15:26] Speaker 03:
You can see the charts in the EIS.

[01:15:27] Speaker 03:
This is the amount of additions.

[01:15:29] Speaker 06:
So if you meet NAC, you're OK.

[01:15:32] Speaker 03:
I think FERC did addition.

[01:15:33] Speaker 03:
There was also air modeling that FERC undertook.

[01:15:36] Speaker 03:
And I think there is a distinction between some of the cases which say an agency can't just say, look, somebody else is dealing with that.

[01:15:45] Speaker 03:
And an agency says that, look, these are the standard.

[01:15:47] Speaker 06:
Well, you heard what FERC said earlier.

[01:15:49] Speaker 06:
Anyway, yes.

[01:15:50] Speaker 03:
I think there's a distinction, I don't think you have to worry about that risk here.

[01:15:54] Speaker 03:
The other thing, on the 83%, the share club relies heavily on that statistic.

[01:15:59] Speaker 03:
I think some context is important here.

[01:16:02] Speaker 03:
First, that the environmental justice analysis is not a one factor test, and you have to work through.

[01:16:07] Speaker 03:
Second, there are some socioeconomic realities associated with pipeline going from rural Alabama down to rural Georgia.

[01:16:14] Speaker 03:
This is, and you can see the statistics that R1925, that's the document number and the certified index to the record, D500 to D507, goes through each state, county, and census tract that the pipeline goes through.

[01:16:28] Speaker 03:
And remember, environmental justice effects are not just on minority communities, but also based on income.

[01:16:33] Speaker 03:
And any divergence from the state median income

[01:16:36] Speaker 03:
can qualify as an environmental justice community.

[01:16:38] Speaker 03:
And as the commission said, this is a process that took extensive account of environmental justice effects in Albany.

[01:16:46] Speaker 03:
They moved the compressor station out from where it would have been if the pipeline had been co-located.

[01:16:52] Speaker 03:
The commission then undertook an additional six alternatives, each one to the already backup location.

[01:17:01] Speaker 03:
Each one, they analyzed the potential environmental justice impacts.

[01:17:05] Speaker 06:
And the percentages were less.

[01:17:08] Speaker 03:
Well, they vary.

[01:17:10] Speaker 03:
Some of the alternative locations were in environmental justice tracks.

[01:17:14] Speaker 06:
But the impact was less.

[01:17:17] Speaker 06:
I mean, 83% is this track.

[01:17:20] Speaker 03:
Well, I think it's important.

[01:17:24] Speaker 06:
Those are Ferg's numbers, not mine.

[01:17:26] Speaker 03:
Yes, but what are the numbers?

[01:17:27] Speaker 03:
So 83% of the pipeline location in Georgia overall, I think, affected environmental justice communities.

[01:17:34] Speaker 03:
But that number is 30% in Dougherty County.

[01:17:36] Speaker 03:
They moved it specifically for this reason, to take account.

[01:17:39] Speaker 03:
And again, even if you thought this was a claim under the executive order, all the executive order required

[01:17:44] Speaker 03:
is that an agency take account as appropriate.

[01:17:48] Speaker 03:
So I think there was an extensive actual physically taking account and attempting to address these effects on potential environmental justice communities.

[01:17:58] Speaker 03:
If there are no further questions.

[01:18:05] Speaker 06:
Thank you.

[01:18:05] Speaker 06:
Council for Petitioners, Sierra Cone.

[01:18:12] Speaker 01:
I just like to make a few points on rebuttal.

[01:18:17] Speaker 01:
That is correct.

[01:18:17] Speaker 01:
This is a NEPA claim, and we're looking at whether it was arbitrary and capricious, and it is for the reasons that we've stated regarding the compressor station, refusing to acknowledge that that community exists, saying that 83.7% is not a disproportionate number.

[01:18:34] Speaker 01:
even though it's greater than all of the other alternatives, even though only a select few alternatives were chosen.

[01:18:40] Speaker 01:
And that percentage comparison did not include the Gulf of Mexico alternative or the no action alternative.

[01:18:50] Speaker 01:
This whole high and adverse rubric created by FERC, it is very confusing because it's not in the guidance, which we are not trying to enforce, but they did say that they're

[01:19:01] Speaker 01:
purporting to follow it.

[01:19:03] Speaker 01:
The test is whether there are disproportionately high and adverse impacts.

[01:19:09] Speaker 01:
The whole purpose of the environmental justice analysis is to determine if minority or low-income communities are being disproportionately impacted.

[01:19:18] Speaker 01:
The EPA guidance specifically says this does not mean a significant impact.

[01:19:22] Speaker 01:
It means are they particularly disproportionately or particularly severely impacted?

[01:19:27] Speaker 01:
Here they clearly are, and FERC refuses to acknowledge that.

[01:19:31] Speaker 01:
As to greenhouse gas emissions, FERC has shown that they do have a lot of information regarding the power plants this is going to, the size of those power plants, et cetera, and there's no reason to not engage in reasonable forecasting.

[01:19:45] Speaker 01:
The tools are available for them to calculate the greenhouse gas emissions.

[01:19:49] Speaker 01:
And finally, with the return on equity, this isn't a policy.

[01:19:52] Speaker 01:
They're just saying, we've done this before.

[01:19:54] Speaker 01:
gotten away with it.

[01:19:56] Speaker 01:
The Mark West opinion actually cites in the footnote where they discuss this rate.

[01:20:00] Speaker 01:
Two other cases where they've done 70% debt, 30% equity ratio, which makes a big difference for rates.

[01:20:06] Speaker 01:
And they don't explain why that's OK.

[01:20:09] Speaker 01:
So we would ask the court to vacate the certificate order and remand a FERC.

[01:20:13] Speaker 01:
Thank you.

[01:20:14] Speaker 06:
Thank you.

[01:20:22] Speaker 06:
All right.

[01:20:23] Speaker 06:
Counsel for petitioner, do you want a minute?

[01:20:35] Speaker 00:
If the standard reviewer is de novo, but if the Sunshine Act, if the government agencies here like FERC, they would never have to have a meeting.

[01:20:49] Speaker 00:
If the Sunshine Act didn't require them to, what I'm saying is you could conduct all your business of a federal agency through notational voting, and there's nothing anybody could do about it.

[01:21:03] Speaker 00:
unless the legislative intent was that if there were controversial matters that they would be brought forward and have a meeting about and that's that's the absurdity of the reverse is I think would

[01:21:18] Speaker 00:
is the key point in our argument, your honor, because you never have to have a meeting.

[01:21:23] Speaker 00:
And you can just do everything, pass these memos around, and business will be conducted in that matter.

[01:21:28] Speaker 00:
And you'd say, well, we did a lot of public meetings earlier on these things, and Burke administered those.

[01:21:34] Speaker 00:
But that's the central crux of our argument.

[01:21:36] Speaker 00:
You would never have to have a meeting.

[01:21:38] Speaker 06:
All right.

[01:21:38] Speaker 06:
Thank you.

[01:21:39] Speaker 00:
Thank you all very much.

[01:21:40] Speaker 06:
We'll take the case under advisement.