East Tennessee Group v. FERC

Court of Appeals for the D.C. Circuit·Decided August 28, 2026·No. 24-1253·Published

Opinion

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 18, 2025 Decided August 28, 2026

No. 24-1253

EAST TENNESSEE GROUP,

PETITIONER

v.

FEDERAL ENERGY REGULATORY COMMISSION, RESPONDENT

EAST TENNESSEE NATURAL GAS, LLC, INTERVENOR

Consolidated with 25-1072

On Petitions for Review of Orders of the Federal Energy Regulatory Commission

Ryan J. Regula argued the cause for petitioner. With him on the briefs was Kelly A. Daly.

Scott R. Ediger, Attorney, Federal Energy Regulatory Commission, argued the cause for respondent. With him on the brief were David L. Morenoff, Deputy General Counsel, and Robert H. Solomon, Solicitor.

Joshua S. Johnson argued the cause for respondentintervenor . With him on the brief were Jeremy C. Marwell, Andrew N. Beach, and James D. Seegers.

Before: MILLETT, KATSAS and CHILDS, Circuit Judges.

Opinion for the Court filed by Circuit Judge CHILDS.

CHILDS, Circuit Judge: Symbols of our nation’s interconnectivity come in many forms. One of these is our energy system, embodied in the copious pipelines and grids crisscrossing these United States. When it works well, our energy system is a Möbius strip, seamlessly connected and fluidly running between cities and states. The success of these grids and lines results from a daily exercise in public and private collaboration, led in part by the work of the Federal Energy Regulatory Commission. Our role today is to smooth a dispute between these participants about the procedure that was used to approve some improvements to this unified system.

A natural gas company, East Tennessee Natural Gas, LLC, sought permission from the Federal Energy Regulatory Commission to improve its pipeline services and facilities and increase its customer service rates to account for these improvements. A collective of the company’s customers, known as East Tennessee Group, protested. When the agency granted East Tennessee Natural Gas’s requests, the customers came to us to challenge the lawfulness of the agency proceedings. In particular, they challenge the adequacy of the Federal Energy Regulatory Commission’s responses to their requests for data. The heartbeat of East Tennessee Group’s challenge is that, despite receiving the data they requested, the agency’s tardiness in providing that data still violated their procedural due process rights in the agency proceeding. On

that basis, and others, East Tennessee Group petitions for vacatur of the agency’s resulting orders. We deny the petitions.

I.

A.

Congress enacted the Natural Gas Act, Pub. L. No. 75–688, 52 Stat. 821 (1938) (codified as amended at 15 U.S.C. §§ 717– 717z), to regulate the transportation and sale of natural gas in interstate commerce. PennEast Pipeline Co., LLC v. New Jersey, 594 U.S. 482, 489 (2021). Congress vested the Federal Energy Regulatory Commission (FERC or Commission) with a connected authority to regulate the “construction, extension, or abandonment of” natural gas facilities under Section 7 of the Natural Gas Act. 15 U.S.C. § 717f. To obtain pipeline construction permissions, natural gas companies must initiate proceedings before FERC, and their applications are reviewed by the Commission. See id. § 717f(c), (d).

Before constructing facilities, a natural gas company must seek permission from FERC in the form of a Certificate of Public Convenience and Necessity (Certificate). Id. § 717f(c). The Commission may grant a “qualified applicant” a Certificate subject to certain conditions, including that the “proposed . . . construction . . . authorized by the certificate, is or will be required by the present or future public convenience and necessity.” Id. § 717f(e). Similarly, to abandon facilities they must also seek FERC’s permission, and it may be granted if “the present or future public convenience or necessity permit such abandonment.” Id. § 717f(b).

Although a natural gas company is obligated to include several exhibits for the Commission’s review, only one set of

exhibits is relevant to this dispute: the “Exhibit Gs.” 1 See 18 C.F.R. § 157.14(a)(8)–(10). These exhibits pertain to the flow data of the energy source involved in the certificate application, in this case natural gas. Like other natural gas data, the Exhibit Gs can contain what is known as “Critical Energy Infrastructure Information.” Id. § 388.113(c)(2). FERC regulation defines Critical Energy Infrastructure Information as national security sensitive information depicting “specific engineering, vulnerability, or detailed design information about proposed or existing critical infrastructure.” Id. FERC strictly controls public access to this information and provides it only upon request. See id. §§ 388.113(g). By FERC regulation, any such request must include a signed nondisclosure agreement, a detailed statement of need for the requested Critical Energy Infrastructure Information, and the requester’s contact information. Id. § 388.113(g)(5)(i). Following receipt of that request, FERC determines whether, and under what conditions, it will release the Critical Energy Infrastructure Information. Id. § 388.113(g)(5)(iii).

The undercurrent of the challenge before us is the timeliness of FERC’s provision of natural gas pipeline Critical Energy Infrastructure Information to a requester.

1 “Exhibit G” contains “[f]low diagrams” that show the daily capacity of the current facilities and their operation “with and without proposed facilities added.” 18 C.F.R. § 157.14(a)(8). “Exhibit G-I” contains additional flow diagrams depicting “the maximum deliveries” of the energy that the “applicant’s existing and proposed facilities” can achieve under favorable operating conditions. Id. § 157.14(a)(9). “Exhibit G-II” is “a statement of engineering design data in explanation and support of the diagrams and the proposed project.” Id. § 157.14(a)(10).

B.

1.

East Tennessee Natural Gas (Pipeline) is a “natural gas company” that is “engaged in the transportation of natural gas in interstate commerce.” 15 U.S.C. § 717a(1), (6). It is the owner and operator of a natural gas pipeline that crosses several states, including Georgia, North Carolina, Tennessee, and Virginia. In the spring of 2023, the Pipeline submitted to FERC an application for permission under Section 7 of the Natural Gas Act for both a Certificate of Public Convenience and Necessity and also for permission to abandon facilities (certificate proceedings). Id. § 717f(b), (c); J.A. 33, 37. The Pipeline’s application sought to construct and then operate miles of new cross-county natural gas pipeline and facilities; it also sought to test, upgrade, and replace its current facilities (System Alignment Program).

The Pipeline contended that the System Alignment Program meets FERC’s statutory and policy requirements for a Certificate. The Pipeline reported that construction was necessary to address the changes in its customers’ usage of natural gas, which had resulted in shortfalls in the natural gas available in certain parts of its system, and the Pipeline further represented that ordinary alternative methods were no longer effective to serve those changed needs. To further bolster the necessity of the System Alignment Program, the Pipeline’s application contained representations of energy flow data, including all the Exhibit Gs. The entire volume of the Pipeline’s application that contained the Exhibit Gs was withheld from the public certificate proceeding docket, as it contained Critical Energy Infrastructure Information.

Of course, the System Alignment Program and all its benefits have a price tag, and because the Pipeline proposed

that the System Alignment Program was one “designed” to benefit “existing customers,” its customers would help foot the bill. J.A. 38. The Pipeline thus asked the Commission for a “pre-determination” to roll the costs of the System Alignment Program into its service rate, with the rate to be determined in a future proceeding.

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