Transcontinental Gas Pipe Line Company, LLC, Garden State Expansion Project, Docket No. CP

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March 15, 2016 Federal Energy Regulatory Commission 888 First Street, N.E., Room 1A Washington, DC 20426 Attention: Kimberly D.

Bose, The undersigned organizations and individuals are writing to submit evidence and set out some of the reasons the Federal Energy Regulatory Commission (FERC) should deny the above-referenced

1 March 15, 2016 Federal Energy Regulatory Commission 888 First Street, N.E., Room 1A Washington, DC Attention: Kimberly D. Bose, Secretary Re: Transcontinental Gas Pipe Line Company, LLC, Garden State Expansion Project, Docket No. CP Dear Ms. Bose, The undersigned organizations and individuals are writing to submit evidence and set out some of the reasons the Federal Energy Regulatory Commission (FERC) should deny the above-referenced application of Transcontinental Pipeline Company (Transco) for approval to build the Garden State Expansion (GSE) project in New Jersey. New Jersey Conservation Foundation and the individuals listed are intervenors in this proceeding. One basic element of GSE is the construction of interconnection facilities in Chesterfield Township whose sole purpose is to connect a proposed intrastate transmission line, the so-called Southern Reliability Link (SRL) for which New Jersey Natural Gas (NJNG) is currently seeking state regulatory approvals, to Transco s existing interstate pipeline adjacent to the New Jersey Turnpike. This letter specifically addresses the reasons for concluding that SRL is unlawful, unnecessary and not in the public interest. Without SRL, there is no purpose to the Chesterfield element of GSE. Therefore, if SRL is itself unlawful, unnecessary and not in the public interest, then GSE itself cannot be found lawful, necessary or in the public interest. Moreover, in evaluating the environmental and community impacts of GSE, FERC must evaluate the environmental and community impacts of SRL. We are attaching an expert report by Skipping Stone, an energy market consulting firm, to this letter, and simultaneously filing additional materials submitted to the NJ Board of Public Utilities (BPU) in a contested case proceeding instituted as part of its regulatory review of the SRL pipeline. These additional materials include submissions and discovery responses by NJNG in the evidentiary hearing held by BPU on this matter. (As of today, BPU has not ruled on the petition at issue in the material we are submitting, but may do so shortly.) We ask that this letter and the materials submitted with it be included in the Commission s record of decision and its deliberations on the merits of the pending application. A. SRL is not reasonably necessary to serve the public and is not in the public interest NJNG s sole justification for building SRL is to provide a redundant transmission line for its existing transmission network serving Monmouth and Ocean Counties in New Jersey. (See Petition Pursuant to N.J.S.A. 40:55D-19 and N.J.S.A. 48:9-25.4, p. 6; see also Prepared Direct 1

2 Testimony of Craig A. Lynch, p. 1:23-24). But NJNG has not provided a rational basis for the claim that such a redundant transmission line is necessary or appropriate in this situation. In fact, NJNG s existing sources and network are already highly redundant, and, even if they weren t, there is no evidence or showing that an entirely new pipeline is an appropriate response to reasonable failure scenarios in the existing transmission system. The only basis NJNG has provided for the premise that a redundant pipeline is necessary or appropriate is the judgment of Craig A. Lynch, VP of Energy Delivery for NJNG. The project relies exclusively on the experience of Mr. Lynch. Mr. Lynch s testimony confirms that NJNG has no basis for the need for a redundant transmission line beyond his judgment. NJNG has neither an independent analysis nor even an internal analysis of the need for such a redundant transmission line. (See Transcript of December 7, 2015 BPU hearing at T52-3 to T58-8 and T57-4 to T58-7; see also NJNG Response to RCR-POL-5). A review of the proposed SRL route within the context of NJNG s existing transmission network demonstrates that SRL will not in fact provide the claimed redundancy because the existing network upstream of SRL s end point in Ocean County is already redundant. (See NJNG Response to RCR-ENG-12, -13, -26.) This point is fully explained in the attached report by Greg Lander of Skipping Stone. (See Skipping Stone Report submitted with this letter). NJNG s map of its existing network shows that there are at least three north-south pipelines and several east-west connections in its existing backbone system. SRL obviously does not improve the resiliency of the system south of SRL s end point, which would remain a single feed with or without the SRL. Finally, NJNG concedes that it already has multiple suppliers and delivery points for its existing system. In fact, one of those sources is the very same Transco supply that SRL would draw upon, a source that NJNG has previously shown it can draw upon for any needed extra supply in case of a failure elsewhere in its supply and transmission system. (See, e.g., NJNG Responses to RCR-ENG-1, -3, -29, -30; see also Skipping Stone Report, pp ) NJNG concedes that it can point neither to an independent analysis, nor even to any internal studies, to demonstrate the need for a redundant transmission line. Indeed, it asserts that its existing system provides safe and reliable service to all its customers throughout the year. (See Prepared Direct Testimony of Craig A. Lynch T3:12-17; T9:7-22; NJNG Responses to RCR-POL-7 and -8.) NJNG has not incurred a full system failure in at least the past twenty (20) years. (See NJNG Response to RCR-ENG-2h). Nor does NJNG attempt to model full system failures. (See NJNG Response RCR-ENG-2h, i-k). Risks and responses can be quantified and analyzed, but NJNG has failed to put forth any analysis of real-world failure scenarios and options for anticipating and avoiding each such scenario. The only real events NJNG has put forth in support of the SRL are Hurricane Sandy and the Polar Vortex. However, neither Hurricane Sandy nor the Polar Vortex harmed or threatened the natural gas transmission lines serving any part of New Jersey. B. The only credible purpose of SRL is to artificially inflate NJNG s rate base at the expense of its ratepayers The only reasonable conclusion to be drawn is that the SRL is part of a larger corporate business plan to benefit NJNG and its parent company which has nothing to do with serving its customers. SRL would incur massive construction costs, which NJNG has already petitioned the Board of Public Utilities to include in its rate base, thus obtaining both reimbursement for its costs and profit on those costs. Moreover, NJNG s parent company, New Jersey Resources, and 2

3 its affiliates are partners in the PennEast interstate pipeline project, also currently undergoing review by FERC. GSE includes access to the portion of Transco s system proximate to where the connection from PennEast to Transco s existing interstate pipeline would occur, and from that area of Transco s pipeline to the SRL in Chesterfield Township. PennEast has committed to supply NJNG 180,000 Dth/day capacity for gas to the Transco pipeline, and NJNG has signed a precedent agreement to buy 180,000 Dth/day of capacity for gas from Transco to move gas from the portion of Transco s system proximate to its interconnection with PennEast (i.e., through the capacity created by the GSE) that is, the same volume of gas to be fed into the system by New Jersey Resources and its partners in PennEast for NJNG. The SRL pipeline, therefore, serves not only to increase NJNG s rate base, but also to create an artificial purchase of unneeded natural gas capacity, the investment in which benefits NJNG s parent company as a partner in PennEast. C. The proposed pipeline violates the Pinelands Comprehensive Management Plan (CMP) The protection of the New Jersey Pinelands represents an important federal interest which FERC must respect. The Pinelands Comprehensive Management Plan (CMP) is established pursuant to both federal law, Section 502 of the National Parks and Recreation Act of 1978, and state law, the Pinelands Protection Act of Under the terms of the federal statute, the Pinelands Comprehensive Management Plan required and received the formal approval of the U.S. Secretary of the Interior. The Secretary of the Interior is represented on the Pinelands Commission, the independent agency that is designated by both the federal and the state statutes as the lead agency for creating and enforcing the Pinelands Comprehensive Plan in order to implement the mandates of the federal and state acts. 16 U.S.C.A. 471i; N.J.S.A. 13:18A-1 et seq. The SRL is proposed to run through Joint Base McGuire-Dix-Lakehurst (Joint Base), which lies entirely within the Pinelands. The Pinelands CMP permits development in the Joint Base if it is associated with the function of the Federal installation and to the extent possible avoids the Pinelands Preservation Area under N.J.A.C. 7: (a). As proposed, however, SRL violates both these standards for the following reasons: SRL does not connect to the Joint Base. While the pipeline would travel through the Joint Base, the project as proposed to the Pinelands Commission and BPU has no interconnection with the Joint Base. This is not surprising, given the fact that a route through the Joint Base was an afterthought devised to ease the way through the Pinelands. (See s dated May 12, 2014, June 9, 2014, and October 15, 2014, attached as Exhibits D - H to PPA s post-hearing brief to BPU). The absence of an interconnection precludes any determination that the development is associated with the function of the base. This point is discussed in greater detail in post-hearing briefs in the BPU proceeding, which we submit with this letter, and is not contested by NJNG. NJNG only serves the Lakehurst section of the Joint Base (about one-third of the base), while another utility, PSE&G, serves the majority of the base. The size and capacity of the proposed pipeline would meet the gas supply needs of over 1 million homes, which vastly dwarfs the requirements of the Lakehurst section of the Joint Base. Thus, even if the pipeline did connect to the Joint Base, the project itself cannot be considered to be associated with the function of the base given its overwhelming size and the tiny portion of its capacity that could go to the base even if it were connected. The base is plainly just 3

4 a way to get from one point to another outside the base, a purpose precluded by the CMP. NJNG s alternative routes analysis does not even address routes that avoid the Pinelands and the Preservation Area, and is profoundly unreliable. (See PPA s opening post-hearing brief at pp for more detail on these points.) The Pinelands areas through which the pipeline would run are governed by the very stringent groundwater standards applicable to the Pinelands under the state Ground Water Quality Standards, N.J.A.C. 7:9C-1.5, especially -1.5(d)2 and Appendix Table 1. The proposed pipeline would violate these standards. At a minimum, NJNG has not demonstrated, and the Pinelands Commission has done nothing to establish, that the pipeline would meet these standards in the course of construction and operation of the pipeline. Of particular concern throughout the pipeline s route in the Pinelands is the fact that the pipeline will be immersed in the groundwater aquifer. Among other risks, the pipeline is bound to leak, and such leaks would contaminate the aquifer and connected surface waters. Publicly-available research shows that natural gas transmission lines do leak methane at an alarmingly high rate, both from valves and from joints between pipeline segments. Much of this research can be found via the Environmental Defense Fund s web site at The paper submitted by Dr. Emery Coppola to the Pinelands Commission, which we submit with this letter, demonstrates that methane leaks into the aquifer can be expected to contaminate groundwater (not simply float into the air). The evidence that transmission lines leak, and that such leaks can impact groundwater, at a minimum, create a presumption that the proposed SRL pipeline would violate applicable water protection standards. The proposed route also violates the CMP s water quality protections because it will run through multiple areas of groundwater contamination, including two Superfund sites with settled Records of Decision. The federal Environmental Protection Agency has determined that remediation of all these areas must meet stringent Pinelands standards. (The areas of groundwater contamination on the base can be found mapped by the Department of Environmental Protection in its Groundwater Classification Exception Areas shapefiles at Because the remediation plans for these sites do not include construction and maintenance of a natural gas transmission line, and such a line could alter the movement of contaminants in groundwater, the proposed pipeline violates the approved plans and likely violates additional Pinelands water quality and wetlands protection standards. Among other violations of federal and state standards, the failure to address this situation violates the CMP, including but not limited to requirements at N.J.A.C. 7:50-4.2(b)5.iii., iv., and ix, and federal and state water protection standards that are incorporated by reference into the CMP. (See N.J.A.C. 7: to 6.87;30 U.S.C. 185; National Environmental Policy Act and Air Force implementing regulations, 42 U.S.C et seq., 40 C.F.R et seq., 32 C.F.R. 989; Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C et seq.) 4

5 In light of these points, and others addressed or to be addressed in separate filings, we submit FERC should not approve the Transco application for the Garden State Expansion Project, and, at a minimum, should take no action until the SRL matter is fully resolved. Respectfully submitted, New Jersey Conservation Foundation Bamboo Brook 170 Longview Road Far Hills, NJ Pinelands Preservation Alliance 17 Pemberton Road Southampton, NJ Belinda Blazic 228 Bordentown-Chesterfield Road Chesterfield, NJ Caryl C. Dyckman 233 Carter Road Princeton, NJ Agnes Marsala 68 Old York Road Chesterfield, NJ Rita Romeu PO Box 552 Crosswicks, NJ Martha Veselka 34 Stell Road Chesterfield, NJ

Adopted Amendments: N.J.A.C. 7: , 7:50-5.1, 7: , 7: , 7: , 7: and 7:

PINELANDS COMMISSION Pinelands Comprehensive Management Plan Wetlands management Adopted Amendments: N.J.A.C. 7:50-2.11, 7:50-5.1, 7:50-5.22, 7:50-5.23, 7:50-5.24, 7:50-5.25 and 7:50-5.47 Adopted Repeal