Posted by: Patricia Salkin | December 7, 2013

Fed. Dist. Court in NY Finds Local Regulations Preempted by FERC Noise Limitations

This case is the latest installment of ongoing litigation over the Town of Wales’ attempts to regulate via permit a natural gas compression station owned by National Fuel Gas Supply Corp. proposed as part of the company’s Northern Access Project, under review before the Federal Energy Regulatory Commission (FERC). In order to comply with local zoning during the FERC review, National Fuel Gas submitted a Special Use Permit application and an environmental assessment form to the Town of Wales. While local reviews were under way, FERC issued the company’s required Certificate, but included noise limitations and a provision requiring that the company obtain local permits “consistent with the conditions” of the FERC certificate, but noting that “this does not mean that state and local agencies may prohibit or unreasonably delay the construction or operation of facilities approved by this Commission.”

When the Town eventually issued the permit, National Fuel Gas claimed the permit was inconsistent with its FERC Certificate because it created stricter noise restrictions than FERC’s Certificate, and because it stated that noise from the compressor station shall not cause noise standard exceedences at nearby Noise Sensitive Areas, which National Fuel Gas argued was a more stringent requirement than the FERC Certificates “shall make all reasonable efforts” to ensure such noise levels were not exceeded. After attempting to negotiate the permit conditions with the Town, National Fuel Gas was still unhappy with the terms. The company moved forward with construction in April 2012 after filing this compliant in January 2012 and amending it in May 2012.

In this case, National Fuel Gas claims that the Town’s attempts to regulate are preempted by federal law, and in this case seeks injunctive and declaratory relief not addressed in prior suits. Here, National Fuel Gas moves for summary judgment on those causes of action, which the Town opposes.

As an initial matter, the Court held that because the FERC Certificate set a specific noise limitation for the compressor station, federal regulation on that issue preempted the Town’s local restrictions, which attempted to regulate aspects of the project already regulated by the federal government via FERC. Further, the restrictions placed by the Town on noise standard exceedence at nearby Noise Sensitive Areas, and the consequences for failure to meet those standards, were more severe than anything imposed by FERC. Ultimately, the Court held that the Town’s permit was inconsistent and in conflict with, and thus preempted by, the FERC Certificate. Thus, the Court granted summary judgment in favor of National Fuel Gas, declaring void the portions of the Town permit which conflict with and are preempted by federal law.

National Fuel Gas Supply Corporation v. Town of Wales, NY, 2013 WL 5739033 (W.D.N.Y. 10/22/13)

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