WASHINGTON, DC – On Friday, the U.S. Court of Appeals for the District of Columbia handed the Liquid Energy Pipeline Association (LEPA) a win in a case challenging a 2022 FERC action to change the method for calculating indexed pipeline rates without proper public comment.
LEPA Welcomes Court Win in FERC Case
WASHINGTON, DC – On Friday, the U.S. Court of Appeals for the District of Columbia handed the Liquid Energy Pipeline Association (LEPA) a win in a case challenging a 2022 FERC action to change the method for calculating indexed pipeline rates without proper public comment.
“LEPA appreciates the court’s recognition that FERC like any other government agency must abide by public notice and comment requirements when it wants to make major changes to its orders,” said Andy Black, LEPA President and CEO.
The case arose out of FERC’s periodic process for reviewing and updating indexed rates. The oil pipeline index governs the rates many pipeline operators may charge to deliver products like crude oil, refined products and natural gas liquids. In 2020, after undertaking a traditional process including public notice and comment to review and reset the Index, FERC published an Order in the Federal Register setting the new Index with an effective date of February 16, 2021.
However, in January 2022, with a change in the FERC Chair and makeup of Commissioners, FERC took the unprecedented step of issuing a Rehearing Order resetting its previously established Index at a lower level. LEPA challenged FERC’s subsequent action in court, and explained FERC did not follow federal requirements under the Administrative Procedure Act (APA) to provide notice and comment prior to issuance of FERC’s 2022 Rehearing Order resetting the Index.
The DC Circuit agreed with LEPA’s legal challenge that FERC failed to comply with the APA when it modified the Index in the 2022 Rehearing Order without adhering to notice and comment procedures. As a result, the court vacated the Rehearing Order and its modified Index. The original Index FERC adopted in 2020 will now become legally effective.
LEPA promotes responsible policies, safety excellence, and public support for liquids pipelines. Its diverse membership of pipeline owners and operators includes large and small pipelines carrying crude oil, refined petroleum products, NGLs and other liquids.
The DC Circuit agreed with LEPA’s legal challenge that FERC failed to comply with the APA when it modified the Index in the 2022 Rehearing Order without adhering to notice and comment procedures. As a result, the court vacated the Rehearing Order and its modified Index. The original Index FERC adopted in 2020 will now become legally effective.
LEPA promotes responsible policies, safety excellence, and public support for liquids pipelines. Its diverse membership of pipeline owners and operators includes large and small pipelines carrying crude oil, refined petroleum products, NGLs and other liquids.
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