In June 2020, Kinder Morgan announced its plan to for the East 300 Upgrade Project, a $246 million expansion of the Tennessee Gas Pipeline (TGP) system. The Project, which involves the construction of a compressor station in New Jersey, as well as upgrades to two existing compressor stations (in New Jersey and Pennsylvania, respectively). This expansion would increase the TGP system firm capacity by 115,000 dekatherms per day to meet the demands of Consolidated Edison (serving New York City and suburbs). In 2022, the Project was approved by the Federal Energy Regulatory Commission (FERC).
The Project is highly controversial and has met with considerable citizen opposition. In New Jersey, in particular, environmental activists and organizations (including Food & Water Watch and Sierra Club), as well as affected residents were concerned about the Project’s negative impacts. These include climate impacts (as a time when a transition from fossil fuels is essential to avoid dangerous climate change), as well as threats to water supply and risk of fire.
A portion of the Upgrade Project is within the environmentally-sensitive Highlands Preservation Area in New Jersey. TGP obtained an exemption from the New Jersey Department of Environmental Protection (DEP) to the Highlands Act, which allows for “routine” work by public utilities in the Highlands. Eastern Environmental Law Centre partnered with three environmental organizations (Food & Water Watch, Sierra Club and New Jersey Highlands Coalition) and challenged the DEP’s decision to issue the exemption. On August 31, 2023, the Superior Court of New Jersey issued an opinion that invalidated the Project’s exemption by the DEP and remanded the matter back to the DEP for further review, particularly concerning the question of whether the Project consists of a routine upgrade. Project opponents viewed the ruling as a significant victory. Following the Superior Court’s ruling, the DEP sought public comment during its review to determine if the Project should be exempt from the Highlands Act.
On October 25, 2023, Ian Goodman and Brigid Rowan of TGG provided an Expert Opinion for submission to the DEP on behalf of Food & Water Watch, Sierra Club and New Jersey Highlands Coalition, regarding the following issues:
- whether the portion of Tennessee Gas Pipeline, LLC (Tennessee) East 300 Upgrade Project within the Highlands Preservation Area qualifies for Exemption #11 from the Highlands Water Protection and Planning Act (Highlands Act), N.J.S.A. 13:20–1 et seq. This exemption authorizes “the routine maintenance and operations, rehabilitation, preservation, reconstruction, repair, or upgrade of public utility lines, rights of way, or systems, by a public utility, provided that the activity is consistent with the goals and purposes of the [Highlands Act].”
- more specifically, whether construction of a Compressor Station (CS 327) and related facilities (including a 69 kV electrical substation) within the Highlands Preservation Area in West Milford, NJ is a “routine upgrade” to Tennessee’s utility system, which qualifies for Exemption #11.
This Expert Opinion offers an energy economics and regulatory perspective based on TGG’s extensive technical experience and expertise regarding natural gas pipelines (as described in Appendix 1).
This opinion:
- outlines the guidance from the New Jersey Superior Court Decision relevant to the applicability of Exemption #11 to the CS 327 Project;
- summarizes Tennessee’s claims that the CS 327 Project is a “routine upgrade,” qualifying for Exemption #11;
- rebuts Tennessee’s claims, provides a meaningful definition of routine upgrade, and demonstrates why CS 327 Project is not a routine upgrade; and
- concludes the CS 327 Project is not a routine upgrade and does not qualify for Exemption #11.
On October 31, 2023, the DEP determined that the Project was a routine upgrade and TGP was given permission put the Project in operation on November 1, 2023.
