The Nickel Report

On August 29, 2025, the Secretary of Energy directed the Federal Energy Regulatory Commission (Commission or FERC) to consider rescinding the Updated Certificate Policy Statement pursuant to his authority under section 403 of the Department of Energy Organization Act (DOE Act).

Background

Section 7 of the Natural Gas Act (NGA) authorizes the Commission to regulate the interstate transportation and sale of natural gas. Under section 7, an entity seeking to construct or extend an interstate pipeline must obtain a certificate of public convenience and necessity, which the Commission will grant if it determines that the project is in the public interest. See 15 U.S.C. § 717f(c), (e).

Since 1999, the Commission has relied on the “1999 Certificate Policy Statement” for the criteria to determine whether a project is in the public interest. See Certification of New Interstate Nat. Gas Pipeline Facilities, 88 FERC ¶ 61,227 (Sep. 15, 1999), clarified, 90 FERC ¶ 61,128 (Feb. 9, 2000), further clarified, 92 FERC ¶ 61,094 (Jul. 28, 2000). Under the 1999 Certificate Policy Statement, the Commission first considers whether the project can proceed without subsidization from the applicant’s existing customers—in other words, whether there is “market need” for the project. The Commission has traditionally looked to precedent agreements as “significant evidence of demand” for a project. 88 FERC at 61,748. If that threshold requirement is satisfied, the Commission will proceed to balance the project’s public benefits with its adverse effects, which is essentially an economic test. If the benefits outweigh the adverse effects on economic interests, the Commission will then proceed to complete an environmental analysis.

In February 2022, the Commission issued an updated Certificate Policy Statement and an Interim GHG Policy Statement. See Certification of New Interstate Nat. Gas Facilities, 178 FERC ¶ 61,107 (2022) (2022 Certificate Policy Statement); Consideration of Greenhouse Gas Emissions in Nat. Gas Infrastructure Project Revs., 178 FERC ¶ 61,108 (2022). Among other things, the 2022 Certificate Policy Statement decreased the emphasis on precedent agreements as evidence of project need and provided for greater consideration of environmental impacts in making a public interest determination. The Interim GHG Policy Statement notably established a significance threshold of 100,000 tons per year of CO₂e under the National Environmental Policy Act (NEPA).  These actions were controversial and prompted dissents from FERC’s Republican Commissioners, multiple requests for rehearing by industry associations, and significant opposition from Congress.

In March 2022, the Commission, upon further consideration, made both statements draft and stated that it would not apply either to pending or new projects until it issued any final guidance after public comment. See Certification of New Interstate Nat. Gas Facilities, 178 FERC ¶ 61,197, at P 2 (2022).

In January 2025, the Commission issued an order terminating the draft Interim GHG Policy Statement. See Consideration of Greenhouse Gas Emissions in Nat. Gas Infrastructure Project Revs., 190 FERC ¶ 61,049 (2025). However, the Commission opted not to similarly terminate the draft 2022 Certificate Policy Statement.

The Secretary’s Directive

Section 403 of the DOE Act authorizes the Secretary of Energy to propose rules, regulations, and statements of policy of general applicability with respect to any function within the jurisdiction of the Commission. 42 U.S.C. § 7173(a). Pursuant to that authority, the Secretary directed the Commission to consider a proposed statement of policy of general applicability to rescind the 2022 Certificate Policy Statement. The Secretary asked the Commission to take final action by September 30.

The Secretary provided two bases for the directive—jurisdiction and uncertainty. The Secretary asserted that the 2022 Certificate Policy Statement exceeded the Commission’s statutory authority and advanced bad policy. Specifically, he argued that the definition of “public interest” under the NGA must be understood in light of the statute’s purpose, which he noted is to encourage the orderly development of plentiful supplies of natural gas at reasonable prices, and thus the Commission cannot narrow its jurisdiction based on policy considerations. The Secretary also argued that NEPA does not mandate any environmental results and therefore cannot affect the Commission’s certification authority under the NGA. With respect to uncertainty, the Secretary noted that, absent rescission, the policy could be resurrected from draft status and applied to a future project. Accordingly, recission would provide certainty to current and future project sponsors regarding the policy framework that would be applied to a project.

This directive is significant not because rescission would work any practical change in the Commission’s certificate analyses—the 2022 Certificate Policy Statement never actually went into effect—but rather because the submission of a proposal under section 403 is exceedingly rare and puts at the fore the relationship between DOE, as an executive agency, and the Commission, which has traditionally been viewed as an independent agency not subject to direct presidential control. Many expect that the DOE will make more use of its section 403 authority to advance the Trump administration’s natural gas and electricity policy priorities through Commission proceedings. 

The last submission under section 403 was in 2017 when Secretary Perry directed the Commission to consider requiring administrators of wholesale power markets to establish a tariff mechanism providing for the purchase of energy and cost recovery for certain “reliability and resilience resources,” effectively coal and nuclear plants. In that instance, the Commission unanimously rejected the proposal, finding that neither the proposed rule nor the record in the proceeding established that the transmission providers’ existing tariffs were unjust, unreasonable, unduly discriminatory, or preferential. See Grid Reliability and Resilience Pricing, 162 FERC ¶ 61,012, at P 15 (2018).

The Commission may be disinclined to take the same approach on the instant proposal. Since the 2022 Certificate Policy Statement is currently in draft status and never took effect, its recission would have no effect on the Commission’s analysis of certificates. Additionally, the Commission has already terminated its companion order—the Interim GHG Policy Statement. Given the low stakes of recission and the current uncertainty surrounding the status of independent agencies, the Commission may be inclined to adopt the proposal to, at least in part, avoid the appearance of rebuke to DOE.

On September 2, the Commission issued a notice seeking comments on the Secretary’s proposal.  The Commission allowed just one week, i.e., until September 9, for comments. That is unusually short and suggests that the Commission is aiming to meet the Secretary’s September 30 target for recission.