FERC can’t regulate City’s gas sales to Guthrie
U.S. Court of Appeals rules in favor of Clarksville
CLARKSVILLE, Tenn. – The U.S. Court of Appeals in Washington, D.C., has ruled in favor of the City of Clarksville, agreeing that the City is exempt under the Natural Gas Act from having gas sales to Guthrie, Ky., regulated by the Federal Energy Regulatory Commission.
"We believed we had the proper jurisdiction to sell natural gas to the City of Guthrie," Mayor Kim McMillan said. "This is a big victory for Clarksville and other municipal gas utilities across the country. A ruling against the city would have meant greater regulatory burdens on our gas utility and possibly higher costs for our gas customers."
In a ruling issued April 24, the three-judge panel noted that Guthrie's pipelines cross the state line to accept Clarksville's gas, meaning Clarksville's pipeline isn't an interstate pipeline subject to FERC jurisdiction.
FERC issued its order on Clarksville's gas sales in 2014 and rejected the city's bid for reconsideration in 2016. However, FERC allowed the sales to continue. On appeal, FERC argued that Clarksville didn't have standing to challenge the order.
In a note to the Mayor and City Council, City Attorney Lance Baker called the ruling “a truly historic and complete victory” and “a decision that limits federal government overreach.”
“This decision is important to the City because it will prevent us from becoming subject to much more intensive regulation by FERC,” he said.
Baker also noted that It is possible, but unlikely, that FERC would appeal the ruling to the U.S. Supreme Court.
Clarksville was represented by Joshua L. Menter and others at McCarter & English LLP, which has offices in Washington.