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49 Colum. J. Env't L. 1 (2024)

handle is hein.journals/cjel49 and id is 1 raw text is: Regional Planning for Just and Reasonable Rates: Reforming Gas Pipeline Review Libby Dimenstein & Burgin Unell Natural gas-a fuel used for electricity generation, heating, and transportation-plays an outsized role in the U.S. economy. Under the Natural Gas Act, the Federal Energy Regulatory Commission (FERC or the Commission) is responsible for overseeing the orderly development of interstate natural gas pipelines, which facilitate the transmission of natural gas throughout the country. Before a developer can construct or expand an interstate pipeline, it must apply to FERC for authoriza- tion; FERC can approve the pipeline only if it finds that it is required by the public convenience and necessity. Although FERC should consid- er a range of factors to determine whether a pipeline will serve the public interest, in practice, it looks primarily to the existence of prece- dent agreements, i.e., contracts between a developer and its customers for the purchase of pipeline capacity. If a developer can demonstrate that there is a party willing to pay to use its pipeline, FERC rarely asks questions and almost always finds public need. In this way, the natu- ral gas transmission network has developed through a system of ad hoc decisionmaking organized around the needs of private companies that earn a hefty return on their capital investments. This pipeline-by-pipeline approach to natural gas transmission build-out leads to the construction of unnecessary, underused pipe- lines, which in turn increases ratepayer costs and decreases consumer welfare. Climate change further increases the risk that pipelines will become obsolete as cities and states move toward electrification. Fur- thermore, the gas transmission planning process-or lack thereof- stands in stark contrast to electric transmission planning, an activity that FERC also regulates but that is conducted by centralized entities 1. Libby Dimenstein is a law clerk on the U.S. Court of Appeals for the Third Circuit and a former legal fellow at the Institute for Policy Integrity at NYU School of Law. Burgin Unel is the Executive Director of the Institute for Policy Integrity. We are thankful to Sarah Ladin for help- ing to conceive of the idea for this paper. We are also grateful to Jennifer Danis, Elizabeth Stein, and participants in the Society for Environmental Law and Economics for insightful comments, questions, and suggestions, and to Alec Peters for helpful research assistance. 1

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