IN THE MATTER OF THE PETITION OF NEW JERSEY NATURAL GAS COMPANY FOR APPROVAL AND AUTHORIZATION TO CONSTRUCT AND OPERATE THE SOUTHERN RELIABILITY LINK PURSUANT TO N.J.A.C. 14:7-1.4 (NEW JERSEY BOARD OF PUBLIC UTILITIES) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2876-15
IN THE MATTER OF THE
PETITION OF NEW JERSEY
NATURAL GAS COMPANY
FOR APPROVAL AND
AUTHORIZATION TO
CONSTRUCT AND OPERATE
THE SOUTHERN RELIABILITY
LINK PURSUANT TO N.J.A.C.
14:7-1.4.
____________________________
Argued April 13, 2021 – Decided April 29, 2021
Before Judges Yannotti, Haas and Natali.
On appeal from the New Jersey Board of Public
Utilities, No. GE15040402.
Paul Leodori argued the cause for appellant Pinelands
Preservation Alliance (Paul Leodori, PC, attorneys;
Todd M. Parisi, on the briefs).
Geoffrey R. Gersten, Deputy Attorney General, argued
the cause for respondent New Jersey Board of Public
Utilities (Gurbir S. Grewal, Attorney General, attorney;
Melissa H. Raksa, Assistant Attorney General, of
counsel; Andrew M. Kuntz, Deputy Attorney General,
and Geoffrey R. Gersten, on the brief).
James C. Meyer argued the cause for respondent New
Jersey Natural Gas Company (Riker Danzig Scherer
Hyland & Perretti, LLP, attorneys; Kevin H. Marino
and John A. Boyle, on the brief).
Maura A. Caroselli, Assistant Deputy Rate Counsel,
argued the cause for respondent New Jersey Division of
Rate Counsel (Stephanie A. Brand, Director, attorney;
Maura A. Caroselli, on the brief).
PER CURIAM
This appeal arises from a petition filed by respondent New Jersey Natural
Gas Company (NJNG) for a permit needed to construct a natural gas pipeline
through several municipalities and a portion of the Pinelands Area. On August
19, 2015, the Board of Public Utilities (Board) denied appellant Pinelands
Preservation Alliance's (PPA's) motion to require the Board to conduct an
adjudicatory hearing on the petition and to grant PPA intervenor or participant
status in the Board's review process. On January 28, 2016, the Board granted
NJNG's petition for the required permit.
PPA appeals from the Board's decisions. Having reviewed PPA's
contentions in light of the record and applicable law, we affirm.
I.
The parties are familiar with the procedural facts and history of this
matter, which are also discussed in our decision today in PPA's companion
A-2876-15
2
appeal in Docket Nos. A-3666-15 and A-3752-15.1 To avoid repetition, we
incorporate that discussion here by reference. Therefore, we need only recite
the most salient history in this opinion.
NJNG is a New Jersey public utility engaged in the business of
purchasing, distributing, transporting, and selling natural gas in Morris,
Middlesex, Monmouth, and Ocean Counties, and the most southeastern portion
of Burlington County. While NJNG's northern service area was connected to
five interstate transmission feeds, three of which could independently supply
that entire region, NJNG's central and southern service areas were connected to
the Texas Eastern Transmission (TETCO) gas pipeline, a single interstate feed
located outside of NJNG's franchise area in Middlesex County.
On April 2, 2015, NJNG filed the MLUL petition with the Board
proposing the construction and operation of an interstate natural gas
transmission pipeline to be known as the Southern Reliability Link (SRL). As
explained in its MLUL petition, NJNG designed the SRL "to maintain system
1
In that appeal, PPA and the Sierra Club (SC) challenged the Board's March
18, 2016 decision granting NJNG's petition for a ruling that the Municipal Land
Use Law (MLUL), N.J.S.A. 40:55D-1 to -163, and any local governmental
development regulations adopted pursuant to the MLUL, would not apply to the
construction of the pipeline. In our opinion in that matter, we affirm the Board's
approval of NJNG's MLUL petition.
A-2876-15
3
integrity and reliability by creating a new, redundant major feed of natural gas
supplies from a second interstate transmission system." The SRL would connect
NJNG's existing natural gas system to a new interstate supply point located in
Chesterfield and operated by the Transcontinental Pipe Line Company
(Transco). The SRL would run from that supply point through six townships:
Chesterfield, North Hanover, Upper Freehold, Plumsted, Jackson, and
Manchester. A 12.1 mile portion in Ocean County, which included right-of-way
(ROW) areas located within and alongside the Joint Base McGuire-Dix-
Lakehurst (Joint Base), would cross the State-designated Pinelands Preservation
Area, N.J.S.A. 13:18A-2, -9, and -11(b). NJNG filed an amended MLUL
petition incorporating a new route through Upper Freehold Township on June 5,
2015.2
Simultaneously with its MLUL petition, NJNG filed a "safety petition"
with the Board in accordance with N.J.A.C. 14:7-1.4. That regulation requires:
(1) Board approval prior to the construction or operation of a natural gas pipeline
2
Because the pipeline would cross the Pinelands Preservation Area, NJNG also
filed an application with the Pinelands Commission (Commission) for approval
to construct the pipeline in the Pinelands. The Commission granted NJNG's
application on September 14, 2017. PPA and SC later filed separate appeals
challenging the Commission's decision. Docket Nos. A-925-17 and A-1004-17.
In an opinion also filed on this date, we affirm the Commission's approval of the
application.
A-2876-15
4
that is intended to be operated in excess of 250 psig (pound-force per square
inch gauge pressure), and is located within 100 feet of any building intended for
human occupancy; and (2) the pipeline to satisfy the federal requirements set
forth in chapter 49 C.F.R. 192, which "prescribes minimum requirements for the
design and installation of pipeline components and facilities" and "prescribes
requirements relating to protection against accidental overpressuring," 49 C.F.R.
§ 192.141.
Specifically, the SRL would operate at "an MAOP [(maximum allowable
operating pressure)] of 722 psig" in the six municipalities it crossed and be
located within 100 feet of 141 structures intended for human occupancy, of
which 130 were residential and 11 were commercial. NJNG's petition which,
like the MLUL petition, was amended in June 2015, further stated in technical
terms:
The Project's proposed transmission line will be
constructed of 30-inch outside diameter steel pipe with
a 0.500 inch wall thickness. It will be manufactured in
accordance with the applicable American Petroleum
Institute ("API") Standard 5L with specified minimum
yield strength of 60,000 psi and minimum tensile
strength of 75,000 psi. The Project will be constructed
in full accordance with N.J.A.C. 14:7 and the Federal
Regulations for the Transportation of Natural and Other
Gas By Pipeline, Part 192, Title 49 of the Code of
Federal Regulations ("49 CFR 192"). It is designed for
Class 4 Location and will be designed to accommodate
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5
future in-line inspection ("ILI") devices, in accordance
with the requirements for passage of internal inspection
devices at 49 CFR 192.150. Additionally, as required
in 49 CFR 192.901 through 192.951 (Subpart O), NJNG
has an Integrity Management Program in place.
The Project's proposed transmission line will be
subjected to 100% non-destructive testing on all welds
and a minimum of 1,500 psig of hydrostatic test
pressure for 24 hours. As part of this test, it will be
subjected to a strength test pressure of approximately
1,800 psig for no greater than one hour, intended to
produce 90% of its Specified Minimum Yield Strength.
As a result, the MAOP of this section of 30-inch main
will be rated at 722 psig, an equivalent MAOP to that
of NJNG's existing transmission system. The
engineering specifications are detailed on the "Pipeline
Engineering Data Sheet" attached to the April 2, 2015
Petition as Exhibit C.
Route studies were performed to determine a
route that will minimize and balance the impact to the
natural environment and the built environment, taking
into consideration the feasibility of constructing the
Project. Of the feasible buildable alternatives, the route
selected by NJNG, as reflected in the April 2, 2015
Petition, represents that alternative with the least
impacts. The Alternatives Analysis is attached to the
April 2, 2015 Petition as Exhibit E.
The [SRL] Project was developed as a redundant
supply line to an existing system in which additional
growth of the system was not taken into account during
its design, so no Smart Growth impact is anticipated.
A-2876-15
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In June 2015, PPA filed a motion for leave to intervene in the Board's
review of NJNG's safety petition pursuant to N.J.A.C. 1:1-16.2 or, in the
alternative, for leave to participate pursuant to N.J.A.C. 1:1-16.6.
After considering PPA's contentions at an agenda meeting on August 19,
2015, the Board concluded in a thorough written decision that PPA did not have
a constitutional or statutory right to an adjudicatory hearing on NJNG's safety
petition, and had not demonstrated its entitlement to either intervenor or
participant status in the permit review process. However, the Board granted
PPA participant status at the evidentiary hearing conducted by Board
Commissioner Dianne Solomon on NJNG's MLUL petition. In addition, PPA
participated at public hearings held by Commissioner Solomon on both the
safety petition and the MLUL petition.
The public hearings were well attended, and the Board received over 1000
written comments concerning the SRL project. With particular reference to
NJNG's safety petition, Michael Stonack, Chief of the Board's Bureau of
Pipeline Safety, stated that pursuant to State and federal regulations, NJNG was
required to install remote controlled valves on the SRL for emergency shutdown.
NJNG also had to develop a comprehensive transmission pipeline integrity
management program that included performing inline inspections with devices
A-2876-15
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known as "smart pigs." In addition, NJNG was required to provide full-time
inspectors, qualified by training and experience, to oversee the construction and
ensure State and federal regulatory compliance.
Stonack further reported that the Board's staff had determined the
proposed SRL was "in compliance with State and [f]ederal pipeline safety
regulations." The staff had reviewed NJNG's design and construction plans and
had performed field inspections of the entire proposed pipeline route and various
alternative routes. "Board staff are charged with making recommendations to
the Board." Stonack also stated that the staff intended to conduct pipeline safety
compliance inspections during the construction, as well as perform future
operating and maintenance inspections as part of the Board's ongoing "Pipeline
Safety Program."
Jaclyn Rhoads, PPA's Assistant Executive Director, along with PPA's
legal counsel, objected to the SRL, claiming that NJNG had provided conflicting
statements about the project's purpose, had not demonstrated the pipeline was
necessary for maintaining or safeguarding the region's natural gas supply, and
had not provided clear justification showing the Joint Base's need to have or use
the pipeline in association with the function of that federal installation. They
further asserted that NJNG had not addressed ecological disruptions and impacts
A-2876-15
8
on endangered species during construction, and claimed that the Board could
not waive compliance with the requirements of the Pinelands Protection Act
(Pinelands Act), N.J.S.A. 13:18A-1 to -29, and the Pinelands Comprehensive
Management Plan (CMP) during any evaluations of NJNG's petitions. Counsel
also asserted that NJNG was constructing the pipeline for profitability, not
reliability, and that its cost should not be passed onto ratepayers.
On January 27, 2016, the Board considered NJNG's safety petition at an
agenda meeting. Stonack advised the Commissioners on the petition, answered
their questions about alternative routes, and summarized the objections received
at the public hearings. He also reported that, because "one of our major
objectives was [to] try and mitigate the number of structures within 100 feet" of
the pipeline, the Board's staff had reviewed all of the possible alternative routes
and found that NJNG's proposed route was "the least impactful and, therefore,
[was] deemed to be the best alternative." Stonack explained:
Board staff worked with [NJNG] on the pipeline
alignment to mitigate the number of human-occupied
structures within 100 feet of the pipeline. The proposed
route proved to be the most viable upon reviewing a
number of factors, including impacts to the public,
structures, existing infrastructure, and the natural
environment, in addition to engineering and
construction considerations.
A-2876-15
9
I might mention that there were certain cases
where we weren't satisfied with the location of the
pipeline, [and] the amended route as it was originally
proposed, and we had asked the company to move the
pipeline slightly to be further away from structures and
they agreed to do so. But those changes don't mean that
there were considerable alignment changes relative to
where the pipeline is located along the routes, the
county roads that are part of the proposed alignment.
So in certain cases -- an example is we asked
them to move the pipeline further into the road so that
it was further away from structures. We had situations
where we talked about moving the pipelines to the
opposite side of the road -- those kinds of things.
Thus, based on NJNG's inspection protocols and safety measures, the
pipeline's proposed wall thickness and installation depth, and a record indicating
the SRL would meet or exceed State and federal standards, the staff found
NJNG's safety petition "reasonable" and recommended Board approval. At the
end of the meeting, the Board unanimously voted to accept the staff's
recommendation.
On January 28, 2016, the Board issued a written decision and order
approving NJNG's safety petition. The Board stated that its staff had: (1)
reviewed NJNG's proposal including "the Project design, construction plans and
specifications, [and] the listing of structures within one hundred (100) feet of
the Pipeline and their distances from the Pipeline alignment"; (2) "conducted a
A-2876-15
10
full field inspection of the entire Pipeline route"; and (3) considered all of the
possible and alternate routes. Additionally, Board staff had "worked with"
NJNG
on the Pipeline alignment to mitigate the number of
human-occupied structures within one hundred (100)
feet of the Pipeline. Several changes were agreed upon
that do not change the overall route of the Pipeline, but
have resulted in moving the Pipeline further away from
certain buildings intended for human occupancy, where
appropriate.
Based on that review, the Board determined that NJNG's proposed SRL
project met the safety requirements of N.J.A.C. 14:7 and satisfied even more
stringent standards than required by many federal pipeline regulations. The
Board explained:
For additional safety, during the pipeline construction,
seven (7) remote controlled valves for emergency
shutdown will be installed by NJNG. In accordance
with the requirements of N.J.A.C. 14:7-1.12, NJNG
will comply with a minimum four (4) feet depth of
cover over the Pipeline [ ] and Board Staff is requiring
the installation of two (2) twelve (12) inch wide
warning tapes [ ], side by side, over the Pipeline as an
additional damage prevention measure for the Pipeline.
Also, the Pipeline will be constructed using higher
strength steel pipe with yield strength equal to 60,000
pounds per square inch ("psi"). In addition, Board Staff
is requiring NJNG to complete an initial integrity
assessment of the Pipeline using inline inspection
devices within five (5) years from the date the Pipeline
is installed and placed into operation [ ].
A-2876-15
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[NJNG] will have full-time inspectors, qualified by
training and experience, overseeing the Pipeline
construction to ensure that the Pipeline is constructed
and installed in accordance with State and Federal
requirements. All Pipeline welders will be qualified by
testing in accordance with the weld procedure qualified
for 60,000 psi yield strength pipe and all welds
completed during the Pipeline construction will be x-
rayed to ensure the integrity of the welds. In addition,
Board Staff will conduct Pipeline safety compliance
inspections during the construction of this Pipeline, as
well as perform future operating and maintenance
inspections on it as part of the Board’s ongoing Pipeline
Safety Program. In accordance with N.J.A.C. 14:7-
1.20, NJNG will perform inspection patrols at least
once per month to observe surface conditions on and
adjacent to the Pipeline right of way [sic] for
indications of leaks, construction activity and other
factors affecting safety and operation [ ]. NJNG shall
maintain with the Board a valve assessment and
emergency closure plan for the Pipeline and shall assess
each Pipeline valve on an annual basis. In addition, as
required by N.J.A.C. 14:7-1.22, NJNG will provide on-
site inspection oversight immediately prior to and
during any excavation and backfilling, and for bored or
horizontally directional drilled installations performed
by other excavators in the vicinity of the Pipeline.
NJNG will provide the pressure testing certification and
documentation required by N.J.A.C. 14:7-1.14 prior to
placing the Pipeline in operation.
[(footnotes omitted).]
The Board determined that, "[t]aken together, all of these safety and
preventative measures ensure[d] the integrity of the Pipeline and enhance[d]
public safety." Accordingly, it concluded that NJNG's request to construct and
A-2876-15
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operate the SRL was "reasonable and . . . in compliance with all relevant
[f]ederal and State requirements." The Board therefore approved NJNG's safety
petition to construct the SRL pipeline pursuant to N.J.A.C. 14:7-1.4,
subject to the approval of all environmental permits
required by the New Jersey Department of
Environmental Protection, approval of road opening
permits from the affected counties and municipalities,
all other permits and approvals, if any, the approval of
traffic control and detour plans with the affected
jurisdictions, the installation of two (2) twelve (12) inch
wide warning tapes, side by side, over the Pipeline, the
pressure testing requirements of N.J.A.C. 14:7-1.14
prior to placing the Pipeline into operation, and
completion of an initial integrity assessment of the
Pipeline using inline inspection devices within five (5)
years from the date the Pipeline is installed and placed
into operation . . . .
Thereafter, PPA filed a notice of appeal from the Board's August 19, 2015
order denying its motion to intervene or participate, and the Board's January 28,
2016 order approving NJNG's safety petition. We consider each of these orders
in turn.
II.
PPA first contends that the Board's August 19, 2015 order deciding that
NJNG's safety petition was an uncontested case and, therefore, denying PPA's
motion for intervenor or participant status was arbitrary and capricious. We
disagree.
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Generally, an administrative agency has discretion in choosing the
"procedural mode of action" it will perform within the agency in the exercise of
its decision-making functions; but this "procedural mode" is "valid only when
there is compliance with the provisions of the Administrative Procedure Act
(APA), N.J.S.A. 52:14B-1 to -15, and due process." In re Provision of Basic
Generation Serv. for Period Beginning June 1, 2008, 205 N.J. 339, 347 (2011).
"The APA provides a road map for navigating administrative proceedings." In
re License of Fanelli, 174 N.J. 165, 172 (2002).
Under the APA, "all interested persons are afforded reasonable
opportunity to submit data, views or arguments, orally or in writing, during any
proceedings involving a permit decision." N.J.S.A. 52:14B-3.1(a). Due process
also requires "notice and opportunity to be heard." In re Proposed Quest Acad.
Charter Sch. of Montclair Founders Grp., 216 N.J. 370, 384 (2013). However,
a formal or evidentiary hearing is clearly not required in every administrative matter.
Wolff v. McDonnell, 418 U.S. 539, 557 (1974) (discussing due process); In re
Request for Solid Waste Util. Customer Lists, 106 N.J. 508, 520 (1987) (discussing
APA). "[A]gencies enjoy a great deal of flexibility in selecting the proceedings
most suitable to achieving their regulatory aims." Bally Mfg. Corp. v. N.J.
Casino Control Comm'n, 85 N.J. 325, 338 (1981). See Texter v. Dep't of Hum.
A-2876-15
14
Servs., 88 N.J. 376, 385 (1982) (stating agency has discretion "to select those
procedures most appropriate to enable the agency to implement legislative
policy").
In this regard, our review of an agency's decision is limited. In re Carter,
191 N.J. 474, 482 (2007). "Normally courts defer to the procedure chosen by
the agency in discharging its statutory duty." Customer Lists, 106 N.J. at 519.
Nevertheless, "[a]n appellate court may reverse an agency decision if it is
arbitrary, capricious, or unreasonable." Montclair Founders Grp., 216 N.J. at
385. As our Supreme Court has explained:
Although sometimes phrased in terms of a search for
arbitrary or unreasonable agency action, the judicial
role [in reviewing an agency action] is generally
restricted to three inquiries: (1) whether the agency's
action violates express or implied legislative policies,
that is, did the agency follow the law; (2) whether the
record contains substantial evidence to support the
findings on which the agency based its action; and (3)
whether in applying the legislative policies to the facts,
the agency clearly erred in reaching a conclusion that
could not reasonably have been made on a showing of
the relevant factors.
[Id. at 385-86 (quoting Mazza v. Bd. of Trs., 143 N.J.
22, 25 (1995)).]
See also N.J.S.A. 48:2-46 (stating that "[n]o [Board] order shall be set aside in
whole or in part for any irregularity or informality in the proceedings of the
A-2876-15
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board unless the irregularity or informality tends to defeat or impair the
substantial right or interest of the appellant").
In addition, we usually "defer to an agency's interpretation of both a
statute and implementing regulation, within the sphere of the agency's authority,
unless the interpretation is plainly unreasonable." Ardan v. Bd. of Rev., 231
N.J. 589, 604 (2018) (quoting In re Election Law Enf't Comm'n Advisory Op.
No. 01-2008, 201 N.J. 254, 262 (2010)). However, we are "in no way bound by
the agency's interpretation . . . or its determination of a strictly legal issue." Ibid.(quoting US Bank, N.A. v. Hough, 210 N.J. 187, 200 (2012)). Accord In re
Implementation of L. 2018, C. 16 Regarding Establishment of Zero Emission
Certificate Program for Eligible Nuclear Power Plants, ___ N.J. Super. ___ (slip
op. at 42) (App. Div. 2021).
A motion to intervene in an administrative proceeding is governed by
N.J.A.C. 1:1-16.1(a) (emphasis added), which states that "[a]ny person or entity not
initially a party, who has a statutory right to intervene or who will be substantially,
specifically and directly affected by the outcome of a contested case, may on motion,
seek leave to intervene." The regulations further provide:
(a) In ruling upon a motion to intervene, the [agency]
shall take into consideration the nature and extent of the
movant's interest in the outcome of the case, whether or
not the movant's interest is sufficiently different from
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that of any party so as to add measurably and
constructively to the scope of the case, the prospect of
confusion or undue delay arising from the movant's
inclusion, and other appropriate matters.
(b) In cases where one of the parties is a State agency
authorized by law to represent the public interest in a
case, no movant shall be denied intervention solely
because the movant's interest may be represented in
part by said State agency.
(c) Notwithstanding (a) above, persons statutorily
permitted to intervene shall be granted intervention.
[N.J.A.C. 1:1-16.3.]
By contrast, a motion to participate may be made by any entity "with a
significant interest in the outcome of a case." N.J.A.C. 1:1-16.6(a) (emphasis
added). "In deciding whether to permit participation, the [agency] shall consider
whether the participant's interest is likely to add constructively to the case
without causing undue delay or confusion." N.J.A.C. 1:1-16.6(b).
An important difference between the two statuses is: intervenors in a
contested case are non-parties who "obtain all rights and obligations of a party,"
N.J.A.C. 1:1-2.1, including direct involvement in any required hearing. However,
participation is limited to: (1) oral argument; (2) filing a statement or brief;
and/or (3) filing exceptions to an initial decision with the agency head. N.J.A.C.
1:1-16.6(c).
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Thus, as a threshold issue before deciding an intervention motion, the
agency head must determine whether the matter before the agency is classified
as a contested case within the intent of the APA. See Sloan ex rel. Sloan v.
Klagholtz, 342 N.J. Super. 385, 392 (App. Div. 2001) (stating "agency head has
exclusive authority to determine whether an administrative matter is a 'contested
case' within the intent of the APA") (citing N.J.S.A. 52:14F-7(a)). This is a
"discretionary decision." Quad Enters. v. Borough of Paramus, 250 N.J. Super.
256, 263 (App. Div. 1991).
The term "contested case" "does not merely refer to whether sufficient
adversity exists between the parties . . . . [A] matter is a contested case where,
by virtue of statute or constitutional requirement, a hearing is required before a
State agency to determine rights, duties, obligations, privileges, benefits or other
legal relations of specific parties." 37 N.J. Practice, Administrative Law &
Practice § 4.7, at 185 (Steven L. Lefelt, Anthony Miragliotta, and Patricia
Prunty) (2d ed. 2000). The APA defines "contested case" as
a proceeding, including any licensing proceeding, in
which the legal rights, duties, obligations, privileges,
benefits or other legal relations of specific parties are
required by constitutional right or by statute to be
determined by an agency by decisions, determinations,
or orders, addressed to them or disposing of their
interests, after opportunity for an agency hearing . . . .
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[N.J.S.A. 52:14B-2.]
This statutory definition is mirrored in N.J.A.C. 1:1-2.1, which also adds
that a contested case "means an adversary proceeding," and that
[t]he required hearing must be designed to result in an
adjudication concerning the rights, duties, obligations,
privileges, benefits or other legal relations of specific
parties over which there exist disputed questions of
fact, law or disposition relating to past, current or
proposed activities or interests. Contested cases are not
informational nor intended to provide a forum for the
expression of public sentiment on proposed agency
action or broad policy issues affecting entire industries
or large, undefined classes of people.
[N.J.A.C. 1:1-2.1 (emphasis added).]
By contrast, the term "'[u]ncontested case' means any hearing offered by an
agency for reasons not requiring a contested case proceeding under the statutory
definition of contested case." N.J.A.C. 1:1-2.1.
We have adopted the following test for agencies to use in determining
whether a matter is contested or an uncontested case within the intendment of
these regulatory definitions:
[T]o determine whether a dispute is a contested case,
there are three questions which must be answered
affirmatively. First, is a hearing required by statute or
constitutional provision; second, will the hearing result
in an adjudication concerning rights, duties,
obligations, privileges, benefits or other legal relations;
A-2876-15
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and third, does the hearing involve specific parties
rather than a large segment of the public?
[Bd. of Educ. of Upper Freehold Reg'l Sch. Dist. v.
State Health Benefits Comm'n, 314 N.J. Super. 486,
494 (App. Div. 1998) (quoting 37 N.J. Practice,
Administrative Law & Practice § 119, at 137 (Steven
L. Lefelt) (1988)).3]
Here, the Board applied this test and determined that its review of NJNG's
safety petition was an uncontested case that did not require an administrative
hearing. In doing so, the Board first asked whether PPA had a statutory or
constitutional right to a hearing and concluded it clearly did not. In addition,
the Board found that N.J.A.C. 14:7-1.4 did not require it to weigh any factual
findings in reaching its decision on NJNG's petition. The Board explained:
N.J.A.C. 14:7-1.4 . . . only requires Board approval
prior to the installation and/or operation of a pipeline in
excess of two-hundred fifty (250) psig if the proposed
pipeline alignment is planned to pass within one-
hundred (100) feet of any building intended for human
occupancy, and does not require the Board to conduct
an evidentiary hearing. Therefore, the Board's review
of the petition is narrow in scope, and it is only tasked
with determining whether the Project is in conformity
with [S]tate and federal natural gas pipeline regulations
and ensuring that the number of habitable dwellings
within one-hundred (100) feet of the Project is
3
This quote is the same as found in the current version of the New Jersey
Practice. See 37 N.J. Practice, Administrative Law & Practice § 4.7, at 185
(Steven L. Lefelt, Anthony Miragliotta, and Patricia Prunty) (2d ed. 2000)
(footnotes omitted).
A-2876-15
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minimized. The Board is not tasked with making any
findings of fact or a determination as to whether the
Project is necessary.
Thus, without needing to address the other two questions set forth in the
Upper Freehold test, the Board classified NJNG's safety petition as an
uncontested case, which gave PPA no right to intervene or participate.
On appeal, PPA argues that the Board violated its constitutional due
process rights by classifying NJNG's safety petition as an uncontested case and
denying the motion to intervene. It claims a constitutional right to a hearing not
only to protect the Pinelands and its management program from inappropriate
development, but also to maintain a safe and secure environment for the
happiness of its own members. PPA relies on Article I, Paragraph 1 of the New
Jersey Constitution, which states that "[a]ll persons are by nature free and
independent, and have certain natural and unalienable rights," including
"enjoying and defending life and liberty, . . . protecting property, and . . .
pursuing and obtaining safety and happiness." N.J. Const. art. I, ¶ 1.
However, PPA's claim to a contested case classification for NJNG's safety
petition is critically undermined by its failure to raise a material issue of fact as
to the Board's actual review requirements in N.J.A.C. 14:7-1.4. "[I]t is the
presence of disputed adjudicative facts, not the vital interests at stake, that
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requires the protection of formal trial procedure" for due process. High
Horizons Dev. Co. v. State, Dep't of Transport., 120 N.J. 40, 53 (1990). See In
re NJPDES Permit No. NJ00025241, 185 N.J. 474, 486 (2006) ("There must
exist a dispute about adjudicative facts that affects the permit decision."). Our
Supreme Court has said that "[c]ontested cases are those in which the
Constitution or a statute requires an adjudicatory hearing" but "[i]t is only wh en
the proposed administrative action is based on disputed adjudicative facts that
an evidentiary hearing is mandated." Customer Lists, 106 N.J. at 517 (quoting
Texter, 88 N.J. at 384.)
N.J.A.C. 14:7 sets forth the "requirements that govern the construct ion,
operation and maintenance of intrastate transmission and distribution pipelines
for the transportation of natural gas by intrastate natural gas pipeline operators."
N.J.A.C. 14:7-1.1(a). The specific standard applied by the Board when
considering a petition filed by a utility company under N.J.A.C. 14:7-1.4 is
reflected in that regulation, which provides:
(a) No person shall install and/or operate a
natural gas pipeline with a maximum operating
pressure in excess of 250 psig within 100 feet of any
building intended for human occupancy . . . unless such
person has obtained prior Board approval of the
installation and/or operation of the pipeline.
....
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(c) A request for approval of the installation
and/or operation of a transmission pipeline shall be
subject to the requirements of 49 CFR 192, including
the requirements for passage of internal inspection
devices at 49 CFR 192.150, and for an integrity
management program in Subpart O, 49 CFR 192.901
through 192.951.
N.J.A.C. 14:7-1.4 therefore required the Board to determine only whether
the SRL project was in conformity with State and federal natural gas pipeline
regulations and with ensuring that the number of habitable buildings within 100
feet was minimized. That is, during its review of NJNG's safety petition, the
Board was simply "receiving general facts which [would] help it decide," using
its specialized expertise, whether the SRL pipeline met the technical State and
federal standards governing pipeline construction, operation and maintenance,
and a contested case hearing was not required. In re Application of N. Jersey
Dist. Water Supply Comm'n, 175 N.J. Super. 167, 203-04 (App. Div. 1980)
(stating "a hearing is not required when an agency is receiving general facts
which will help it decide questions of law, policy and discretion") (citing
Cunningham v. Dep't of Civ. Serv., 69 N.J. 13, 22 (1975)). Thus, even without
examining the other two parts of the test established in Upper Freehold, the
Board did not err by concluding that NJNG's safety petition was not a contested
case.
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Contrary to PPA's arguments, there are no environmental or threatened or
endangered species concerns, alternative routes issues, or CMP-related
compliance questions compulsory to the Board's review of NJNG's safety
petition pursuant to N.J.A.C. 14:7-1.4. 49 C.F.R. §§ 192.1 to 192.1013
"prescribe[] minimum requirements for the design and installation of pipeline
components and facilities. In addition, [that chapter] prescribes requirements
relating to protection against accidental overpressuring." 49 C.F.R. § 192.141.
Thus, the Board did not err by concluding that PPA was not entitled to intervenor
status to challenge NJNG's safety petition and raise issues of the SRL 's
compliance with the Pinelands Act and CMP Rules. Also, because PPA's stated
Pinelands, CMP-related, and environmental "interest[s]" were not "likely to add
constructively to the case without causing undue delay or confusion," N.J.A.C.
1:1-16.6(b), the Board did not err by concluding that PPA was not entitled to
participant status to challenge NJNG's safety petition.
Accordingly, we are satisfied that the Board's August 19, 2015
determinations to treat NJNG's safety petition as an uncontested case and to deny
PPA's motion for intervenor or participant status were not arbitrary, capricious,
or unreasonable. Therefore, we reject PPA's contentions on this point.
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III.
PPA next challenges the Board's January 28, 2016 decision granting
NJNG's safety petition. As it did in its appeal from the Board's approval of
NJNG's MLUL petition, PPA asserts that the Board's failure to address whether
the SRL project complied with the Pinelands Act and related CMP Rules
rendered its decision arbitrary and capricious. Specifically, PPA argues that the
SRL's proposed route did not comply with those statutory and regulatory
Pinelands' requirements, and that the Board's alternative route analysis was
incomplete and unreliable because it never considered the fact that the SRL
would be crossing two federal superfund sites, a federal military installation,
and the State-designated Pinelands Preservation Area.
PPA's arguments on this point lack merit for the reasons discussed in our
opinion concerning PPA's similar challenge to NJNG's MLUL petition. 4 Simply
stated, the Board had no authority to review NJNG's proposed construction for
compliance with the Pinelands Act, the CMP Rules, or with any other
environmental statutory scheme. Indeed, as we recently held in In re Petition of
S. Jersey Gas Co., 447 N.J. Super. 459, 482 (App. Div. 2016), only the
Commission has the expertise and exclusive legislative authority to decide
4
Docket Nos. A-3666-15 and A-3752-15.
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whether a pipeline project complies with the Pinelands Act and CMP Rules.
Therefore, we reject PPA's argument that the Board's decision on NJNG's safety
petition was arbitrary or unreasonable because the Board did not make
determinations on environmental issues that were within the Commission's
jurisdiction.
Moreover, the Board specifically stated in its January 28, 2016 opinion
that its decision to grant the safety petition "was subject to the approval of . . .
all other permits and approvals . . . ." This language sufficiently accounts for
the need for prior approval by the Commission. Just as importantly , the
Commission adopted a resolution on September 14, 2017 approving NJNG's
application to construct the pipeline in the Pinelands. Thus, there is no merit to
PPA's contention that the Board waived compliance with the Pinelands Act and
the CMP Rules.
All other arguments raised in this appeal, to the extent we have not
addressed them are with sufficient merit to be discussed. R. 2:11-3(e)(1)(E).
Affirmed.
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