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Federal Register / Vol. 86, No. 91 / Thursday, May 13, 2021 / Rules and Regulations
APA.60 Specifically, Kinder Morgan argues that the Commission erred by relying on the APAs exception to notice-and-comment rulemaking for rules of agency organization, procedure, or practice to promulgate the rule because, it contends, the rule substantially affects the rights and interests of project proponents and their customers.61 INGAA advances a similar argument, stating that the changes adopted in Order No. 871 are not technical matters of procedure, but rather entail substantive alterations of substantial rights subject to the APAs notice-and-comment procedures. 62
33. Even if the rule appears procedural on its face, Kinder Morgan and INGAA argue, the rules substantive effect on the natural gas pipeline industry is significant and sufficiently grave so that notice and comment are needed to safeguard the policies underlying the APA. 63 In so positing, INGAA and Kinder Morgan note that of the 1,000 certificates of public convenience and necessity issued by the Commission since 1999, parties sought rehearing in 240 cases approximately 24 percent.64
34. Kinder Morgan and INGAA also contend that the Commission failed to consider the rules impact on the natural gas pipeline industrys business models, which developed in reliance on the Commissions prior practice of authorizing construction prior to acting on applications for rehearing.65 INGAA
stresses that the timing of approvals, construction initiation, and placement of projects into natural gas service are among a pipeline companys most important practical and commercial considerations. 66 Kinder Morgan and INGAA argue that the Commission failed to assess whether there were reliance interests, determine whether they were significant, and weigh any 60 Kinder
Morgan Rehearing at 612; INGAA
Rehearing at 2732.
61 Kinder Morgan Rehearing at 8.
62 INGAA Rehearing at 28.
63 See Kinder Morgan Rehearing at 1112
quoting Mendoza v. Perez, 754 F.3d 1002, 1023
D.C. Cir. 2014 citations omitted; INGAA
Rehearing at 3031 same.
64 Kinder Morgan Rehearing at 12; INGAA
Rehearing at 31.
65 Kinder Morgan Rehearing at 10 citing Dept of Homeland Sec. v. Regents of the Univ. of Cal., 140
S. Ct. 1891, 19131915 2020 in rescinding the Deferred Action for Childhood Arrivals program, the Department of Homeland Security should have assessed whether there were reliance interests, determined the significance of any such interests, and weighed those interests against competing policy concerns; INGAA Rehearing at 3234
same.
66 INGAA Rehearing at 33.

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such interests against competing policy concerns. 67
2. Order No. 871 Was Properly Issued as a Final Rule 35. Because the rule neither substantially alters the rights or interests of regulated natural gas companies nor changes the agencys substantive outcomes, the APAs notice and comment procedures were not required.68 Nothing in Order No. 871, as revised here, changes the standards the Commission applies, or the ultimate result, on rehearing of NGA section 7
certificate orders. Moreover, the timing of when to permit construction to begin is a matter entirely within the Commissions existing discretion and not a matter of right. Nothing in the NGA or the Commissions regulations, prior to Order No. 871, addresses the timing of authorizations to commence construction. And nothing in the NGA
or the Commissions regulations prevents the Commission from acting on rehearing prior to issuing an authorization to proceed with construction. Staff, or the Commission itself, could validly have established the same policy, either generally or on a case-by-case adjudicatory basis, without any announcement at all. Given the absence of a right to obtain authorization to proceed with construction at any particular time, Kinder Morgan and INGAA have not demonstrated that Order No. 871 is anything more than a procedural rule. In addition, an otherwise procedural rule, such as this, does not becomes a substantive one, for notice-andcomment purposes, simply because it imposes a burden on regulated parties. 69
36. Neither Kinder Morgan nor INGAA sets forth with any specificity the significant and sufficiently grave impacts they contend will befall the 67 Kinder Morgan Rehearing at 10 quoting Regents of the Univ. of Cal., 140 S. Ct. at 1915;
INGAA Rehearing at 34 same.
68 See Am. Hosp. Assn v. Bowen, 834 F.2d 1037, 1047 D.C. Cir. 1987 quoting Batterton v. Marshall, 648 F.2d 694, 707 D.C. Cir. 1980; id. at 1048. In determining whether a rule is substantive, we must look at its effect on those interests ultimately at stake in the agency proceeding. Neighborhood TV
Co. v. FCC, 742 F.2d 629, 637 D.C. Cir. 1984
holding that a decision to freeze applications for television licenses on some frequencies affected an applicants interest only incidentally and was therefore procedural citing Pickus v. U.S. Board of Parole, 507 F.2d 1107 D.C. Cir. 1974 holding that parole board guidelines were substantive because they were the kind calculated to have a substantial effect on the ultimate parole decisions.
69 James V. Hurson Assocs., Inc. v. Glickman, 229
F.3d 277, 281 D.C. Cir. 2000 Appellant has cited no case in which this Court has required noticeand-comment rulemaking for an especially burdensome procedural rule. Nor could it . . . ..

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natural gas pipeline industry as a result of Order No. 871. They merely note that of the over 1,000 certificates of public convenience and necessity issued since 1999, parties sought rehearing 24
percent of the time. But both entities fail to mention that the timing of an initial Commission decision on a project proposed under NGA sections 7 or 3 has always been undefined. While a project proponent may identify in its application a requested approval and/or in-service date, these dates are requests that do not control the timing of the Commissions decision. Rather, the Commissions timeline for processing project applications is dictated by factors such as the complexity of proposed projects, the quality of information provided by the applicant and the applicants timeliness in responding to staff information requests, changes made by the applicant to its proposal, and the nature of the issues in each case. Neither the public nor the project proponent is privy to the date on which the Commission may act on a project application filed under NGA
section 3 or 7. This means that, even prior to Order No. 871, project development timelines had to account for some uncertainty in when the Commission might issue its decision on an NGA section 7 or 3 application and, if appropriate, subsequently authorize commencement of construction. Any incremental delay or uncertainty created by Order No. 871 is acceptable given the benefits that the rule provides.
37. Further, in many, if not most, instances, construction cannot begin immediately upon issuance of an initial order under NGA sections 3 or 7.
Typically, construction of natural gas facilities cannot commence without the certificate or authorization holder first filing documentation demonstrating either that it has received all applicable authorizations required under federal law or that such authorizations have been waived. Often this involves finalizing the pipeline route, completing Endangered Species Act or National Historic Preservation Act consultation, and/or obtaining state certifications under the Clean Water Act or the Coastal Zone Management Act. Based on data maintained by Commission staff for the five calendar years preceding Order No. 871 i.e., 20152019, an average of 85 days elapsed between issuance of an initial order and issuance of an authorization to proceed with construction. Put another way, prior to Order No. 871, on average, natural gas companies should not have expected to receive authorization to proceed with
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