IN THE MATTER OF THE PETITION OF NEW JERSEY NATURAL GAS COMPANY FOR A DETERMINATION CONCERNING THE SOUTHERN RELIABILITY LINK PURSUANT TO N.J.S.A. 40:55D-19 AND N.J.S.A. 48:9-25.4 (NEW JERSEY BOARD OF PUBLIC UTILITIES) (CONSOLIDATED) ( 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NOT FOR PUBLICATION WITHOUT THE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 NOS. A-3666-15
A-3752-15
IN THE MATTER OF THE
PETITION OF NEW JERSEY
NATURAL GAS COMPANY FOR
A DETERMINATION
CONCERNING THE SOUTHERN
RELIABILITY LINK PURSUANT
TO N.J.S.A. 40:55D-19 AND
N.J.S.A. 48:9-25.4.
______________________________
Argued January 20, 2021 – Decided April 29, 2021
Before Judges Yannotti, Haas and Natali.
On appeal from the New Jersey Board of Public
Utilities, No. GO15040403.
Paul Leodori argued the cause for appellant Pinelands
Preservation Alliance (Paul Leodori, PC, attorney;
Todd M. Parisi, on the brief).
Daniel A. Greenhouse argued the cause for appellant
Sierra Club (Eastern Environmental Law Center,
attorneys; Aaron Kleinbaum, of counsel; Raghu
Murthy, 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 briefs).
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 briefs).
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 briefs).
PER CURIAM
These two appeals, argued back-to-back and consolidated for purposes of
this opinion, arise from a proposal by respondent New Jersey Natural Gas
Company (NJNG) to construct a natural gas pipeline through several
municipalities and a portion of the Pinelands Area. On March 18, 2016, the
Board of Public Utilities (Board) granted a petition by NJNG pursuant to
N.J.S.A. 40:55D-19, and determined 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.1
1
We will refer to this petition as the MLUL petition.
A-3666-15
2
Appellants Pinelands Preservation Alliance (PPA) and Sierra Club (SC)
appeal from the Board's decision. Having reviewed appellants' contentions in
light of the record and applicable law, we affirm.
I.
The procedural history and facts of this matter are fully set forth in the
Board's thorough written opinion and, therefore, we need only summarize the
most salient facts here. NJNG is a New Jersey public utility engaged in the
business of purchasing, distributing, transporting, and selling natural gas to
approximately 510,000 customers 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 2 with the Board
proposing the construction and operation of an interstate natural gas
2
In addition to the MLUL petition, NJNG filed a "safety petition" seeking,
among other things, the Board's approval to install the pipeline "within 100 feet
A-3666-15
3
transmission pipeline to be known as the Southern Reliability Link (SRL). As
explained in its MLUL petition, NJNG designed the SRL "to maintain system
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 petition
incorporating a new route through Upper Freehold Township on June 5, 2015.
In its MLUL petition, NJNG asked the Board to: (1) determine that the
project was reasonably necessary for the service, convenience, and welfare of
the public; (2) designate the pipeline's route through North Hanover and
of any building intended for human occupancy." The Board granted the safety
petition. PPA filed a separate appeal challenging the Board's approval of the
safety petition. Docket No. A-2876-15. In an opinion filed on this date in that
appeal, we affirm the Board's decision granting the safety petition.
A-3666-15
4
Chesterfield; and (3) determine that all of the zoning and local land ordinance s
and regulations promulgated under the MLUL by Burlington, Monmouth and
Ocean Counties, and Chesterfield, North Hanover, Upper Freehold, Plumsted,
Jackson, and Manchester Townships would not apply to the project. The Board
retained the MLUL petition for hearing and designated Commissioner Dianne
Solomon to conduct the case.
Commissioner Solomon denied PPA's motion to intervene in the hearing,
but granted its motion to participate in the proceeding, "limited to the right to
argue orally and file a statement or brief as set out in N.J.A.C. 1:1-16.6(c)(1)
and (2)." SC did not seek to intervene or participate in the matter. However,
Commissioner Solomon conducted three public hearings on the petition and both
PPA and SC presented testimony opposing the SRL project at the public hearing
held on July 28, 2015.
Commissioner Solomon conducted an evidentiary hearing on December
5, 2015. NJNG and the affected local municipalities presented pre-filed and live
testimony. Craig A. Lynch, NJNG's Senior Vice President of Energy Delivery,
testified that he had thirty years of experience designing and operating NJNG's
system. Lynch stated that the SRL project was needed to support the reliability
and integrity of NJNG's intrastate transmission system by providing a redundant
A-3666-15
5
major transmission feed to its Central and Ocean Divisions, which serve its
customers in Ocean, Burlington, and Monmouth Counties.
Lynch explained that over 85% of NJNG's winter peak-day gas supply for
its Central and Ocean Divisions was provided by a single interstate connection
operated by TETCO. The remaining 15% of NJNG's winter peak-day gas supply
was provided by two smaller connections. Thus, unlike NJNG's Northern
Division with its five major interstate feeds, NJNG's customers in its Central
and Ocean Divisions were most vulnerable to a TETCO supply chain failure.
The SRL project would provide "a major supply of natural gas from a second
interstate supply (Transco), reducing dependency on a single primary source
(TETCO)." According to Lynch, "[t]he aspirational goal of NJNG [was] to be
able to maintain service to the entire Monmouth/Ocean/Burlington region
should one of these sources of supply be interrupted, or experience a prolonged
loss of use of existing NJNG transmission facility along its internal backbone
system."
Lynch explained that Superstorm Sandy had revealed NJNG's critical need
for system redundancy in its Central and Ocean Divisions, especially after
31,000 of its customers had gas service curtailed during and after the stor m.
Lynch stated that these service curtailments were related to NJNG's decision to
A-3666-15
6
depressurize the local transmission system for safety reasons, and not to a total
interruption of the interstate supply. Nevertheless, this storm event
demonstrated to NJNG the tremendous cost of a potential widespread intrastate
curtailment, together with "other implications like making customer homes
inhabitable due to a lack of heat and hot water." Lynch stated that "each location
damaged [by the storm] also had substantial areas downstream that were viable,"
so "[i]f additional feeds were available to those systems, the outages could have
been minimized because [NJNG] would have isolated the damaged areas and
kept gas flowing to the undamaged areas."
Lynch then identified the significant difficulties, costs, and delays that
would arise in connection with restoring service after a widespread interruption
in the absence of a redundant feed:
[T]he pipeline would need to be brought back into
service either by repair or replacement. Once the
pipeline was restored, each affected distribution system
would need to be restored, and each customer's service
would need to be individually restored. After the
curtailment, technicians would have to visit every
customer, door to door, multiple times (to turn off,
reenergize, and turn on appliances) to restore service.
For example, after Superstorm Sandy, it took two
months to restore service to approximately 31,000
customers on Long Beach Island and the Seaside
Peninsula area of NJNG's service territory. Restoring
service to a larger population of customers could take
much longer.
A-3666-15
7
Lynch also described two events involving TETCO's interstate feed during
which the SRL would have affected NJNG's transmission and distribution
system and demonstrated the need for the SRL. First, TETCO's
Entriken/Chambersburg compressor stations had reduced the capacity of gas
flowing to NJNG due to a system failure that lasted from January 7 to January
15, 2015. "TETCO declared the outages a force majeure event," and NJNG
estimated that a similar outage would affect approximately 350,000 to 400,000
of its customers, cost between $170 million to $190 million, and take a minimum
of four months to restore service once adequate supply became available.
Second, during the 2014 Polar Vortex, an unplanned outage at TETCO's
Delmont compressor station decreased the availability of natural gas to NJNG.
This resulted in decreased line pressure and required NJNG to run its liquified
natural gas (LNG) plants for thirty-six hours to maintain system integrity and
replace lost supply. Lynch stated that a lengthier or more intense TETCO outage
"could have resulted in significant customer interruptions because LNG supply
and send[-]out capacities are limited." He explained that LNG plants cannot
replace a lost supply of more than 160,000 dekatherms 3 per day (Dth/day).
3
A "dekatherm" is a unit of energy used primarily to measure natural gas.
A-3666-15
8
Lynch asserted that with the SRL in place, there would have been no risk
to customer interruptions during either of these events since gas service would
have been provided via the SRL's connection to Transco. Because NJNG
currently relied on a single interstate feed for nearly all of its gas supply to its
Central and Ocean Divisions, Lynch testified it would be "bad planning and
irresponsible" for NJNG to wait for a catastrophic event resulting in widespread
service loss before taking steps to avoid or mitigate such an event.
Lynch also testified that the New Jersey Reinvestment in System
Enhancement (NJ RISE) Program, approved by the Board in 2014, would not
render the SRL unnecessary. NJ RISE was "the name of a group of six NJNG
projects approved by the [Board] in 2014 providing system enhancements that
improve NJNG's distribution system through storm hardening investments."
Lynch explained that because four of those projects served as secondary feeds
to large single-feed distribution systems along the coast, the NJ RISE project
would not render the SRL unnecessary.
Lynch testified that the SRL project was intended exclusively for
reliability and not expansion or addition of services. "[T]he planning and design
of this [p]roject [was] exclusively a reliability project, providing an alternate
source of natural gas for our customers." However, he agreed that expansion or
A-3666-15
9
addition of services was "not out of the question," and that more customers
would increase NJNG's profits.
Respondent Division of Rate Counsel presented the testimony of Edward
A. McGee of McGee Consulting, LLC. McGee believed that only a portion of
the cost of the proposed line should be borne by ratepayers, since the proposed
pipeline was oversized for the current contract that NJNG had negotiated with
the interstate pipeline transporting gas to the SRL. He explained that since the
entire amount of gas set forth in the contract could be supplied to NJNG's system
through a smaller-diameter line, only the cost of a smaller-diameter line should
be borne by ratepayers. However, McGee made clear that he did not mean to
suggest that NJNG should install a twenty-four-inch pipeline instead of its
planned thirty-inch pipeline. Instead, he explained that while NJNG could
choose the size of the line, ratepayers should not be expected to pay the cost of
an oversized line.
In response, Lynch testified it would be a mistake to equate the diameter
of the pipeline with the contract NJNG had signed for the gas supply, and to
conclude this volume was best delivered only with a twenty-four-inch pipe.
According to Lynch, contract volume did not equal reliability requirements.
That is, contract volume was limited by the infrastructure of the interstate
A-3666-15
10
pipelines and did not reflect NJNG's full reliability requirement. Lynch
explained that "NJNG's primary existing backbone is [thirty]-inch pipeline" and
a similarly-sized pipeline for the SRL project was "required to feed the entire
system once upgrades are made to [the] backbone to provide for a fully looped
system."
Lynch stated that without a "looped backbone," the SRL could not provide
gas to the entire southern portion of NJNG's service area. In the event there was
a reduction of supply from TETCO, the SRL's design would ensure transmission
system integrity. Also, in the absence of a thirty-inch pipeline, the additional
capacity transacted for in the event of an interruption could not flow prop erly
without an unacceptable pressure drop.
NJNG also presented the testimony of Barry A. Baker, manager of the
Impact Assessment and Permitting Department at AECOM Technology Corp.,
who testified as an expert on siting utility transmission facilities. NJNG retained
AECOM and Baker to assist in the evaluation and development of an alternate
routes study in order to select a route for the SRL that would best minimize
impacts to local communities and the natural environment while maintaining
constructability.
A-3666-15
11
Baker's alternatives analysis consisted of four fundamental phases: define
the project study area, generate alternative routes, evaluate the alternatives, and
determine the selected route using a quantitative and qualitative assessment. In
the first phase, Baker found that a new service feed was required to accomplish
NJNG's project objectives of developing an independent gate station capable of
delivering large volumes of gas, supporting the southern end of NJNG's
transmission system, and not needing supply from TETCO.
Baker next split the proposed pipeline into two geographical sections
because the eastern portion of the study area was located within the Pinelands
and any route through that area would need to combine the impacts to the built
and natural environments while maintaining a feasible engineering design.
Section One began in Chesterfield at the Transco compressor station connector
point and extended easterly to the Pinelands Area boundary. Section Two
bordered the western edge of the Pinelands Area and extended eastward to
NJNG's existing facilities in Manchester Township.
Baker then employed a detailed siting analysis to determine the different
alternative routes that would best balance social, environmental, engineering,
and economic considerations. He also considered siting the SRL within or
parallel to existing pipeline and utility ROWs, and crossing undeveloped land.
A-3666-15
12
Baker identified five alternative routes for Section One, and four
alternatives for Section Two. Baker explained the methodology used to generate
each of the alternative routes:
The goal of the [a]lternatives [a]nalysis was to
identify a route that minimizes the impact to the built
and natural environments to the maximum extent
practicable, while still maintaining the technical and
economic viability of the [p]roject. The [a]lternatives
[a]nalysis was used to determine the most suitable route
for a 30-inch underground transmission main
connecting the Transco compressor station in
Chesterfield Township and transmission system in
Manchester Township.
Baker's alternatives analysis considered potential impacts of each
alternative route from three perspectives: (1) protection of the built
environment, which addressed human and cultural resources, including
residential neighborhoods, other community-valued buildings, and historic sites;
(2) protection of the natural environment, which addressed plants, animals,
aquatic resources, ecological resources, and natural habitat; and (3) engineering
considerations, which addressed maximizing co-location and minimizing cost
and schedule challenges for the SRL by seeking the shortest path or using
existing ROWs, while also avoiding areas that posed significant construction
obstacles.
A-3666-15
13
Baker then evaluated the alternative routes based on quantitative and
qualitative assessments, and determined the advantages and disadvantages of
each. Following this analysis, Baker stated that various alternative routes were
not selected because of "their relative lengths through sections of the Pinelands
Management areas where such development [was] not considered a permissible
use." He explained that two of these routes were too close in proximity to the
highest number of schools and churches.
Two other proposed alternative routes, one that followed the Jersey
Central Power and Light ROW (JCP&L ROW) and one that entered and crossed
through the Joint Base were also not feasible. The JCP&L ROW route passed
through preserved farmland parcels where pipeline development was prohibited,
and that route had cumulative environmental impacts higher than any other
alternative. The route that entered and crossed through the operational areas and
firing ranges on the Joint Base was not selected because it would present various
undesirable impacts, such as the dangers inherent in crossing a military range
and possibly encountering unexploded ordnance.
Ultimately, Baker and AECOM selected Route B for Section One, and
Route D for Section Two. Section One, Route B was approximately 16.7 miles,
and would require the acquisition of approximately 1.1 miles of easements on
A-3666-15
14
private property and would run underneath approximately 15.6 miles of roads.
Section Two, Route D was approximately 11.7 miles, and would require the
acquisition of 1.0 mile of private easements outside of the Joint Base, and the
following easements within the Joint Base: 3.8 miles along the fence line of a
side road; 3.8 miles under other Joint Base roads; 1.5 miles adjacent to an unused
runway; and 1.4 miles along the side of other roads or undeveloped areas. 4
Baker concluded that these two routes would result in the least combined
impacts to the built environment and natural environment while still offering a
feasible engineering design and practicable construction.
John B. Wyckoff, P.E., NJNG's Director of Engineering, testified that the
SRL pipeline would consist of approximately twenty-eight miles of a new thirty-
inch diameter, one-half inch wall thickness, transmission line. Each
construction site would be approximately one-quarter mile long, and horizontal
directional drilling would be used to pass under most creeks or streams. Traffic
control, road closings, detour routes, and the need for night work would be
coordinated with local officials.
4
Baker also cited to a letter from the Joint Base Commander to Assemblyman
Ronald Dancer on November 6, 2015, which stated that Route D had been
"developed in close coordination with Air Force engineering, environmental,
and legal experts and remains the best available on-base route."
A-3666-15
15
Wyckoff further stated that the SRL was expected to provide 180,000
Dth/day, or more than 25% of NJNG's winter design day capacity. In NJNG's
responses to discovery requests, it explained that on its "Peak Day" in winter of
February 2015, "a volume of 180,000 Dth would represent approximately 33%
of [NJNG's] pipeline supply into Monmouth/Ocean county service territory, and
32% of total customer demand including LNG production," while during the
Polar Vortex, "a volume of 180,000 Dth would represent approximately 43% of
[NJNG's] pipeline supply into Monmouth/Ocean county service territory, and
31% of total customer demand including LNG production."
Based upon the evidence presented at the hearing and at the three public
hearings, the Board rendered a unanimous written decision and order approving
NJNG's MLUL petition. As to the public's need for the SRL project, the Board
concluded that NJNG "ha[d] met its burden of proof, and ha[d] shown that the
Project 'is reasonably necessary for the service, convenience or welfare of the
public' pursuant to N.J.S.A. 40:55D-19." Reviewing that evidence, the Board
explained that NJNG's current transmission system unnecessarily left customers
in its southern territory vulnerable, since those customers in parts of Ocean,
Burlington, and Monmouth Counties were most defenseless to an interruption
of supply from TETCO.
A-3666-15
16
The Board found:
In the event of a disruption in TETCO['s] supply, it is
evident that NJNG's existing two remaining
interconnections with Transco, which are also at the
northern end of NJNG's transmission system servicing
the Counties, lack the ability to maintain adequate
pressure at the southern end of the system. These two
Transco interconnections have an approximate capacity
of 76,500 and 124,500 Dth/day and are [sic] their
expansion is limited by the existing Transco
transportation capacity available. NJNG's LNG
facilities can also be utilized to help maintain system
pressures. However, the LNG facilities have a
maximum send-out of 170,000 Dth/day. At maximum
send-out with a full tank, current LNG supplies will last
approximately seven (7) to ten (10) days.
Any supply disruption that outstrips the capacity of the
existing Transco interconnection and LNG's ability to
maintain adequate system pressure will result in the
loss of service to customers in the southern portion of
the [c]ompany's service territory. Should this happen,
NJNG would need to isolate portions of the distribution
system by shutting line valves and go house-to-house
in the isolated areas to shut valves at each meter. The
extent of the areas isolated depends on the extent of the
supply interruption. Once supply issues are resolved,
the isolated sections would need to be reenergized and
each individual customer would need to be turned back
on and their appliances re-lit.
Thus, the Board concluded that NJNG's current interconnection with TETCO's
Texas Eastern Transmission Pipeline, which was located at the northern end of
NJNG's transmission system servicing the counties, equated to "a single point
A-3666-15
17
of failure," and that the SRL's design and the fact that it would provide an
alternate interstate supply source to the southern portion of NJNG's transmission
system would mitigate the potential impact of this failure point.
The Board further found that NJNG had considered alternatives to its SRL
project, but had correctly rejected them because they did not meet the three
criteria required for NJNG to reinforce its current transmission system: (1)
"there must be an independent gate station capable of delivering large volu mes
of gas"; (2) this gate station "must support the southern end of NJNG's
transmission system"; and (3) "it must not provide supply from TETCO."
The Board also rejected McGee's testimony on behalf of the Rate Counsel
that the full capacity of a thirty-inch pipeline was not necessary for redundancy
purposes. Relying on Lynch's testimony, the Board agreed that the 180,000
Dth/day contract was not an appropriate tool to determine the correct size of the
pipe for the project.
The Board further concluded that the SRL project would serve the goals
of the State’s 2011 Energy Master Plan (EMP) because the pipeline would "add
a significant, diverse source of natural gas, while also increasing overall system
reliability and reinforcement in NJNG’s service area." The Board explained:
The EMP was released in 2011 and sets forth the
strategic vision for the use, management and
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development of energy in New Jersey, with the
overarching goal of saving money while stimulating the
economy and protecting the environment. One of the
five (5) major goals of the EMP is to expand in-state
electricity resources by promoting the "expansion of
the existing [natural gas] pipeline network that serves
gas utilities and power plants throughout New Jersey."
An [u]pdate to the EMP ("EMP Update") was released
in 2015. The EMP Update recommended no changes to
the goals stated in the 2011 EMP and further
recommended the continued advocacy "for enhanced
intrastate [pipeline] capacity at local levels." The
actions, decisions, determinations and rulings of State
government entities with respect to energy "shall to the
maximum extent practicable and reasonable and
feasible conform" with the provisions of the EMP.
N.J.S.A. 52:27F-15(b). In implementing its regulatory
powers and its responsibilities, the Board considers the
directives of the EMP.
Thus, pursuant to N.J.S.A. 40:55D-19, the Board concluded that NJNG
had "demonstrated the need to address its risk of a supply interruption to its gas
transmission system." The Board explained that "the pipeline was selected to
provide appropriate flows, in the case of curtailments in excess of 180,000
Dth/day," and that the "SRL will provide a significant, diverse feed to NJNG's
transmission system and support the integrity of such, while minimizing the risk
of an interstate supply interruption."
The Board next found that the evidence supported NJNG's review and
analysis of the alternative intrastate routes for its project, and that its chosen
A-3666-15
19
route for the SRL "[was] the most appropriate, primarily because NJNG and
AECOM have demonstrated that its alignment minimizes the overall potential
impacts to the environment and the community." The Board, therefore,
concluded there was "no reasonable practicable alternative which would have
less adverse impact upon the environment or upon the land use and zoning
ordinances of the respective counties and municipalities."
The Board rejected the objectors' claims that there were more feasible
alternatives for routing the SRL than NJNG's preferred route, such as routes that
traversed through the Joint Base or followed the JCP&L ROW. With respect to
the Joint Base, the Board found the evidence supported NJNG's assertion that
this alternative "would present undesirable operational impacts" since crossing
a military range complex and other operational areas would result in the
possibility of encountering unexploded ordnance. The Board also noted that the
Base Commander concurred that NJNG’s proposed route was "developed in
close coordination with Air Force engineering, environmental, and legal experts
and remains the best available on-base route."
Rejecting the JCP&L ROW route, the Board found the evidence supported
NJNG's assertion that this alternative would require the pipeline to cross
preserved farmland, which was prohibited by the New Jersey Farmland
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20
Preservation Program, known as the Agriculture Retention and Development
Act (ARDA). N.J.S.A. 4:1C-11 to -48, and the State Agricultural Development
Committee (SADC) regulations, N.J.A.C. 2:76-1.1 to -27.10. The Board also
explained that this alternate route posed great environmental risks:
[T]he utilization of the JCP&L ROW would require
extensive clearing and cross environmentally sensitive
areas containing extensive wetlands as well as
threatened and endangered species, resulting in a higher
overall impact to the interests being balanced in the
alternatives analysis. As reflected in the [a]lternatives
[a]nalysis, AECOM found that Route D crossed the
most streams, most wetlands, most floodplains and the
most landscape-identified threatened and endangered
("T&E") species habitat areas. Route D was also
assigned the highest special permit value (five (5))
because this alignment would cross the most streams,
most wetlands, most floodplains and the most
landscape-identified T&E species habitat areas.
Therefore, the Board concluded that the route involving the utilization of
the JCP&L ROW not only had the greatest environmental concerns, but also
required NJNG to cross preserved farmland in contravention of state law.
Accordingly, the Board found that a proposed route other than the one NJNG
selected was "not feasible."
The Board further found that the cost estimates reflected in the record for
the SRL project ranged from approximately $150 million to $180 million.
However, in determining whether the SRL project was "reasonably necessary
A-3666-15
21
for the service, convenience or welfare of the public" under N.J.S.A. 40:55D -
19, the Board also considered "the cost that New Jersey electricity customers
[would] bear in connection with the Project."
Consequently, the Board examined NJNG's review of alternative project
proposals, that is, ones that extended interstate pipelines from multiple interstate
suppliers through New Jersey to NJNG's service territory. According to NJNG's
review, construction of an interstate pipeline extension to its service territory
would cost approximately $10 million per mile. Based on this cost and the
estimated rates of return authorized by the Federal Energy Regulatory
Commission, NJNG found, and the Board agreed, that it would be more costly
to pursue an interstate pipeline extension. "Since the Project is thirty (30) miles
long, the costs of an interstate pipeline would be approximately $300 million,
compared with the current intrastate pipeline estimate of $150-180 million."
But the Board determined from the evidence that a number of other factors
could influence and add to NJNG's proposed cost of an intrastate pipeline, such
as overall length, road restoration, easement acquisition, site clearing,
environmental mitigation, site access, and requirements to cross wetlands and
streams. Thus, the Board found that, at the very least, the cost of a pipeline
A-3666-15
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alignment following the various alternative routes evaluated in NJNG's analysis
could be considered comparable.
Nevertheless, the Board took a further step in its analysis based on the fact
that the SRL was reasonably necessary since a single interstate supply from
TETCO currently provided the majority of gas for NJNG's territory in question.
That is, from the evidence presented, the Board reasoned:
If the [c]ompany experiences a loss of this TETCO
supply, this would ultimately result in interruptions to
approximately 350,000 to 400,000 customers during
peak send-out periods in winter. Restoration of service
to these customers would take a minimum of four (4)
months and result in direct expenses to the company
ranging from approximately $170 to $190 million, not
including losses related to the loss of social services or
economic activity.
Thus, the Board found: (1) "the cost of building an intrastate pipeline,
owned and operated by NJNG and supplied by Transco, [was] reasonable as
compared to the alternative of building a pipeline owned and operated by an
interstate supplier"; (2) there was "sufficient evidence in the record to conclude
that the estimated cost of the line [was] reasonable to prevent the loss of service
to NJNG customers and as compared to intrastate and interstate route
alternatives"; and (3) the SRL project was "reasonably necessary for the service,
convenience or welfare of the public" pursuant to N.J.S.A. 40:55D-19. Further,
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because this matter was not a rate proceeding, the Board stated it did not have
to "determine the recoverability of the cost of this Project, including the
incremental cost difference between a twenty-four (24) and thirty (30) inch
pipeline."
In sum, the Board determined in accordance with N.J.S.A. 40:55D-19 that:
(1) the SRL project was "reasonably necessary for the service, convenience, or
welfare of the public" to enable NJNG to continue to provide safe, adequate, and
reliable service to its customers; (2) NJNG should be able to construct and begin
operation of the pipeline as proposed; and (3) the local land use and zoning
ordinances, and any other ordinance, rule or regulation promulgated under the
auspices of the MLUL would not apply to the construction, installation, and
operation of the project.
Accordingly, the Board ordered that "neither N.J.S.A. 40:55D-1 et seq.,
nor any other government ordinances or regulations, permits or license
requirements made under the authority of N.J.S.A. 40:55D-1 et seq. shall apply
to the siting, installation, construction, or operation of the [p]roject." The Board
expressly made its order "subject to the approval of any pending road opening
permits from the affected municipalities and the New Jersey Department of
Transportation, all other pending permits and approvals, if any, and the pressure
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24
testing requirements of N.J.A.C. 14:7-1.14 prior to placing the Pipeline in
operation." (emphasis added).
These appeals followed.
II.
PPA argues that the SRL project violates the Pinelands Protection Act
(Pinelands Act), N.J.S.A. 13:18A-1 to -29, the Pinelands Comprehensive
Management Plan (CMP), and local municipal Pinelands ordinances. It also
claims that the Pinelands Commission's (Commission's) Certificate of Filing
(COF) did not constitute a proper review of the merits of the project through the
Pinelands.
In addition, PPA asserts that the SRL project is not "associated with the
function" of the Joint Base "as required by the CMP." PPA further asserts that
the Board should have concluded that the project violated the remediation
process of natural restoration previously approved by the United States
Environmental Protection Agency (USEPA) and other environmental standards
established by the New Jersey Department of Environmental Protection
(NJDEP). These contentions all lack merit because none of these issues were
before the Board in this MLUL petition matter and, therefore, could only be
considered by the agencies having jurisdiction over them.
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25
"Generally speaking, the [Board]'s power to regulate utilities is broad." In
re Centex Homes, LLC, 411 N.J. Super. 244, 254 (App. Div. 2009). The
Legislature vested the Board with the "general supervision and regulation of and
jurisdiction and control over, all public utilities . . . and their property, property
rights, equipment, facilities and franchises so far as may be necessary for the
purpose of carrying out the provisions of [Title 48]." N.J.S.A. 48:2-13(a).
N.J.S.A. 48:2-23 empowers the Board to ensure that regulated public utilities
provide safe, adequate and proper service to the citizens of New Jersey. In re
Public Service Electric & Gas Co. (PSE&G), 35 N.J. 358, 371 (1961). N.J.S.A.
48:2-19 states that the Board may "[i]nvestigate, upon its own initiative or upon
complaint in writing any matter concerning any public utility." Those
provisions must be construed liberally. Twp. of Deptford v. Woodbury Terrace
Sewerage Corp., 54 N.J. 418, 424 (1969); PSE&G, 35 N.J. at 371.
The specific standard applied by the Board when considering a petition
filed by a utility company is reflected in N.J.S.A. 40:55D-19, which states in
part:
This act [(the MLUL)] or any ordinance or
regulation made under authority thereof, shall not apply
to a development proposed by a public utility for
installation in more than one municipality for the
furnishing of service, if upon a petition of the public
utility, the Board of Public Utilities shall after hearing,
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26
of which any municipalities affected shall have notice,
decide the proposed installation of the development in
question is reasonably necessary for the service,
convenience or welfare of the public.
Nothing in this act shall be construed to restrict
the right of any interested party to obtain a review of
the action of the municipal agency or of the Board of
Public Utilities by any court of competent jurisdiction
according to law.
[(emphasis added).]
N.J.S.A. 48:9-25.4 further permits the Board to designate "a practicable
route" for a public utility transmitting natural gas service if the local
municipality fails or refuses to make such a designation or designates an
impracticable route. That statute provides:
Any gas company organized under the laws of
this State in addition to but not in limitation of the
powers conferred by the laws under which it was
organized may construct, lay, maintain and use
facilities, conductors, mains and pipes, with the
appurtenances thereto, in, through and beyond any
municipality or municipalities, for the purpose of
transmitting through the same natural gas or any
mixture of gas or gases of any other type or types for
use in its business; provided, that in each case such
corporation shall first have obtained a designation by
the governing body or official having control thereof,
of the public street, road, highway or place, which may
be occupied by such corporation for such purpose. If
any governing body or official having control of any
public street, road, highway or place, after having
received from such corporation a request to designate
A-3666-15
27
such public street, road, highway or place, for
occupancy by such corporation for such purpose, shall
fail or refuse to make such designation or to designate
a practicable route, the Board of Public Utility
Commissioners, upon application by the corporation,
and after hearing on notice to such governing body or
official, shall make such designation.
[N.J.S.A. 48:9-25.4 (emphasis added).]
These two statutes do not invalidate the specific laws governing the
Pinelands, wetlands, or Superfund sites. An agency cannot issue or deny a
permit "absent satisfaction of the applicable statutory criteria." In re
Authorization for Freshwater Wetlands Gen. Permits, 372 N.J. Super. 578, 596
n.8 (App. Div. 2004).
However, "[w]hile the [Board] was 'intended by the Legislature to have
the widest range of regulatory power over public utilities,' that power has never
been cast in environmental terms." Centex Homes, 411 N.J. Super. at 265-66(citation omitted). The language of N.J.S.A. 48:2-23 does not give the Board
power to decide a public utility's compliance with environmental or land use
requirements, or give those issues "overriding consideration" in its decision to
extend service. Id. at 264.
Thus, the Board had no statutory authority to review NJNG's proposed
construction for compliance with the Pinelands Act, the CMP Rules, the
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USEPA's or NJDEP's decisions or orders, or with any other environmental
statutory scheme. Indeed, as we recently held in another case involving the
approval of a natural gas pipeline, only the Commission has the expertise and
exclusive legislative authority to decide whether a pipeline project compli es
with the Pinelands Act and CMP Rules in the coordinated permitting process.
In re Petition of S. Jersey Gas Co. (SJG), 447 N.J. Super. 459, 482 (App. Div.
2016).
In SJG, this court addressed the Board's grant of a petition under N.J.S.A.
40:55D-19 for South Jersey Gas's proposed construction of a similar natural gas
pipeline within the Pinelands. Id. at 471-72. We noted that a provision of the
Pinelands Act, N.J.S.A. 13:18A-10(c), stated that "no State . . . permit . . . for
the construction of any structure or the disturbance of any land within [the
Pinelands] shall be granted unless such approval or grant conforms to the
provisions of [the CMP]." Id. at 478. (alteration in original). However, we made
clear that the decision as to whether the project conformed to the CMP had to
be made by the full Commission and not by the Board. We stated:
[I]n deciding whether to grant a petition brought under
N.J.S.A. 40:55D-19, the Board determines whether the
MLUL and local regulations adopted pursuant to the
MLUL should be waived. The Board's approval of any
MLUL petition must be consistent with the minimum
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29
standards of the CMP, but the Board is not empowered
to make that determination in the first instance. In this
matter, that decision must be made by the Commission,
pursuant to its authority under the Pinelands Act and
the CMP.
[Ibid. (emphasis added).]
Therefore, we reject PPA's argument that the Board's decision was
arbitrary or unreasonable because the Board did not make determinations on
environmental issues that were within the jurisdiction of the Commission and
other State and federal agencies.
PPA also argues that the COF prepared by the Commission's Executive
Director was insufficient to demonstrate that the SRL project met the standards
of the CMP. In SJG, this court held that only the full Commission could make
this determination and, because it did not, we remanded the matter to the
Commission so that it could review the Executive Director's action. Id. at 478-
79. PPA suggests that a similar remand is warranted here. We disagree.
First, the Board specifically stated in its final decision that its approval of
NJNG's petition was "subject to . . . all other pending permits and approvals."
This language sufficiently accounts for the need for prior approval by the
Commission. Moreover, our Supreme Court has emphasized the importance of
"comity and deference to sibling agencies" where the government oversees
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30
"complex and manifold activities that are also the appropriate statutory concern
of other governmental bodies." Hinfey v. Matawan Reg'l Bd. of Educ., 77 N.J.
514, 531 (1978). Thus, there is no merit to PPA's contention that the Board
waived compliance with the Pinelands Act and the CMP Rules, or with the
USEPA's orders or NJDEP's requirements by stating that its approval of the
MLUL petition was subject to action by its sibling agencies on other pending
permit applications.
Perhaps more importantly, the Commission adopted a resolution on
September 14, 2017 approving NJNG's application to construct the pipeline in
the Pinelands.5 Therefore, NJNG has satisfied the requirements for Commission
approval set forth in N.J.S.A. 13:18A-10(c) and no remand is necessary.
III.
In a related issue, SC argues that the Board lacked the authority under
N.J.S.A. 40:55D-19 to waive compliance with Pinelands protection ordinances
adopted by municipalities allegedly under the authority of the Pinelands Act
rather than the MLUL. Because we considered and rejected this identical
5
PPA and SC have filed separate appeals challenging the Commission's
approval of this application. 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.
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31
argument by SC in SJG, we discern no basis for reaching a different conclusion
here.
In SJG, SC argued
that the Board's decision waiving municipal approvals
was wrong as a matter of law. [SC] contends that
N.J.S.A. 40:55D-19 does not apply to Pinelands-based
reviews and ordinances, and that the Board had no
authority to override any local approval that is
otherwise required by the Pinelands Act and any
ordinances authorized and adopted under that Act.
[447 N.J. Super. at 483.]
In explaining why we were "not persuaded by this argument[,]" we stated:
By its plain language, N.J.S.A. 40:55D-19 gives the
Board the authority to waive the MLUL and any local
ordinance or regulation adopted pursuant to the MLUL.
The Board's authority under N.J.S.A. 40:55D-19
necessarily includes the power to waive any MLUL
review of approvals by municipalities in the Pinelands.
The Pinelands Act does not limit the exercise of this
power. However, as the Board recognized in its final
decision, any development project for which local
MLUL regulation is waived pursuant to N.J.S.A.
40:55D-19 remains subject to the Pinelands Act and the
minimum standards of the CMP.
[Ibid.]
Thus, the Board clearly had the authority to waive compliance with the
MLUL and any local ordinance or regulation adopted pursuant to the MLUL
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32
whether or not those ordinances were enacted by municipalities in the Pinelands
Preservation Area.
SC contends that some of the municipal ordinances involved in this case
were enacted pursuant to authority granted to the municipalities by the Pinelands
Act rather than by the MLUL. However, SC does not identify any ordinances
that meet this description. SC also argues that municipal ordinances adopted
pursuant to the MLUL which impose standards that exceed those established
under the Pinelands Act or the CMP should not be waivable under N.J.S.A.
40:55D-19. However, as we squarely held in SJG, "[t]he Board's authority under
N.J.S.A. 40:55D-19 necessarily includes the power to waive any MLUL review
of approvals by municipalities in the Pinelands." Ibid. (emphasis added).
Therefore, we reject SC's contention on this point.
IV.
As noted above, the Board granted PPA the opportunity to participate in
the MLUL petition proceeding by filing a post-hearing brief and presenting oral
argument. However, when PPA submitted its brief, it attached seventeen
exhibits that had not been presented at either the evidentiary hearing or the
public hearings. These exhibits included documents that had been filed with the
Commission concerning the pipeline, several emails, the transcript of an October
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33
2013 analyst meeting hosted by NJNG's parent, New Jersey Resources, a
memorandum criticizing NJNG's proposal prepared by a consultant "in the
mergers and acquisition arena with numerous clients within the energy
industry," and various environmental studies and economic analyses of the Joint
Base and of New Jersey Superfund Sites from 1999 to 2014. In presenting these
exhibits, PPA failed to submit an affidavit or certification authenticating the
documents or verifying the facts contained in them.
As a result, the Board declined to consider the seventeen exhibits as
evidence. The Board explained that although N.J.A.C. 1:1-15.2 allows an
agency to take official notice of its own documents and the existence of
documents issued by a sister agency, the exhibits that PPA offered with its brief
had no accompanying formal certifications and were never subject to a review
process by the Board or by the other parties. Thus, the Board concluded that
PPA was "attempting to import new evidence into the record, when the authoring
witnesses ha[d] not been qualified to testify nor been subject to cross-
examination." Nevertheless, the Board advised PPA that it would consider its
new submissions as public comments rather than as evidence.
PPA now argues that the Board erred by failing to consider the documents
as evidence. Again, we disagree.
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34
PPA was not a party to the MLUL petition proceeding and, as a
participant, it only had the right to file a brief and present oral argument.
N.J.A.C. 1:1-16.6(c). Thus, PPA did not have the right to submit evidence
during the evidentiary hearing or in a post-hearing brief.
Moreover, PPA improperly attached the exhibits to its brief without
providing the required affidavit or certification authenticating the exhibits or
attesting to the accuracy of the facts contained in the documents. As we stated
almost thirty-five years ago,
[t]he function of [a] brief is a written presentation of
legal argument. Facts intended to be relied on which
do not already appear of record and which are not
judicially noticeable are required to be submitted to the
[trier of fact] by way of affidavit or testimony. See R.
1:6-6 . . . . These are not merely formal requirements.
They go to the heart of procedural due process.
[Celino v. Gen. Accident Ins., 211 N.J. Super. 538, 544
(App. Div. 1986).]
As noted, the Board stated it would consider PPA's submissions as public
comment along with all of the other non-evidentiary public comments it received
from other participants. Under these circumstances, there is no basis for
disturbing the Board's decision on this issue.
V.
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35
In the remaining points of their briefs, PPA and SC argue that the Board's
decision to grant NJNG's MLUL petition was arbitrary and capricious because
the pipeline was not necessary to solve the "single point of failure" catastrophic
scenario, which they assert could be better addressed with alternative routes that
would avoid the Pinelands. They also allege that NJNG intends to use the SRL
to maximize its profits rather than the reliability of its natural gas delivery
system. These arguments lack merit.
Our scope of review of an administrative agency's decision is limited. In
re Carter, 191 N.J. 474, 482 (2007). "An appellate court may reverse an agency
decision if it is arbitrary, capricious, or unreasonable." In re Proposed Quest
Acad. Charter Sch. of Montclair Founders Grp., 216 N.J. 370, 385 (2013). As
the 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.
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36
[Id. at 385-86 (quoting Mazza v. Bd. of Trs., 143 N.J.
22, 25 (1995)).]
Our review of Board decisions is further limited by N.J.S.A. 48:2-46,
which states in pertinent part that the Appellate Division has "jurisdiction to
review any order of the [B]oard [of Public Utilities] and to set aside such order
in whole or in part when it clearly appears that there was no evidence before the
board to support the same reasonably . . . ." (emphasis added). This statute
follows the general principle that our courts will not reverse an agency decision
just "'because of doubts as to its wisdom or because the record may support more
than one result,' but [are] 'obliged to give due deference to the view of those
charged with the responsibility of implementing legislative programs.'" In re
Adoption of Amendments to N.E., Upper Raritan, Sussex Cnty. & Upper Del.
Water Quality Mgmt. Plans, 435 N.J. Super. 571, 583-84 (App. Div. 2014)
(alteration in original) (quoting In re N.J. Pinelands Comm'n Resol. PC4-00-89,
356 N.J. Super. 363, 372 (App. Div. 2003)).
A reviewing court "will not weigh the evidence, determine the credibility
of witnesses, draw inferences and conclusions from the evidence, or resolve
conflicts therein." De Vitis v. N.J. Racing Comm'n, 202 N.J. Super. 484, 489-
90 (App. Div. 1985). "[W]here there is substantial evidence in the record to
support more than one regulatory conclusion, it is the agency's choice which
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37
governs." Adoption of Amendments, 435 N.J. Super. at 583 (quoting Murray v.
State Health Benefits Comm'n, 337 N.J. Super. 435, 442 (App. Div. 2001)
(citation and internal quotation marks omitted)).
"[J]udicial deference to administrative agencies stems from the
recognition that agencies have the specialized expertise necessary to . . . deal[]
with technical matters that are 'particularly well equipped to read and understand
the massive documents and to evaluate the factual and technical issues. . . .'"
Ibid. (quoting N.J. State League of Muns. v. Dep't of Cmty. Affs., 158 N.J. 211,
222 (1999)) (alteration in original). The burden of demonstrating that the
agency's action is reversible "rests upon the [party] challenging the
administrative action." Ibid. (alteration in original).
Applying these well-established principles, we discern no basis for
disturbing the Board's decision to grant NJNG's MLUL petition because it was
reasonably necessary for the service, convenience, or welfare of the public and
there was "no reasonable practicable alternative which would have less adverse
impact upon the environment or upon the land use and zoning ordinances of the
respective counties and municipalities." We therefore reject appellants'
arguments on this point substantially for the reasons set forth by the Board in its
comprehensive opinion and add the following comments.
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38
In order to be successful on its petition for an exemption from all MLUL
provisions and all local regulations and ordinances made pursuant to the
MLUL's authority, NJNG had to demonstrate that its SRL project was
"reasonably necessary for the service, convenience or welfare of the public,"
N.J.S.A. 40:55D-19, and that the route designated was "practicable," N.J.S.A.
48:9-25.4.
Construing the language in N.J.S.A. 40:55-50, the predecessor to N.J.S.A.
40:55D-19, the Supreme Court stated:
1. The statutory phrase, "for the service,
convenience and welfare of the public" refers to the
whole "public" served by the utility and not the limited
local group benefited by the zoning ordinance.
2. The utility must show that the proposed use is
reasonably, not absolutely or indispensably, necessary
for public service, convenience and welfare at some
location.
3. It is the "situation", i.e., the particular site or
location . . . which must be found "reasonably
necessary," so the Board must consider the community
zone plan and zoning ordinance, as well as the physical
characteristics of the plot involved and the surrounding
neighborhood, and the effect of the proposed use
thereon.
4. Alternative sites or methods and their
comparative advantages and disadvantages to all
interests involved, including cost, must be considered
in determining such reasonable necessity.
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39
5. The Board's obligation is to weigh all interests
and factors in the light of the entire factual picture and
adjudicate the existence or non-existence of reasonable
necessity therefrom. If the balance is equal, the utility
is entitled to the preference, because the legislative
intent is clear that the broad public interest to be served
is greater than local considerations.
[PSE&G, 35 N.J. at 376-77 (citing In re Application of
Hackensack Water Co., 41 N.J. Super. 408, 425 (App.
Div. 1956)).]
The Court explained:
This exemption section expresses a legislative intent
that, in the zoning field, at least some power over a
utility is reserved to a municipality, subject to the
supervising authority of the Board to declare the local
regulation inapplicable if it determines "the situation of
the building or structure in question is reasonably
necessary for the service, convenience or welfare of the
public."
[Id. at 373-74.]
In New Jersey Nat. Gas Co. v. Borough of Red Bank, 438 N.J. Super. 164,
184 (App. Div. 2014), we observed that "[i]t is evident that the Legislature's
enactment of N.J.S.A. 40:55D-19 actually increased control over a public
utility's use of land within a municipality's borders." These requirements
reinforce the Court's recognition that the regulation of public utilities requires a
regional approach. Overlook Terrace Mgmt. Corp. v. Rent Control Bd. of Town
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40
of W. N.Y., 71 N.J. 451, 474 (1976); S. Ocean Landfill, Inc. v. Mayor & Council
of Twp. of Ocean, 64 N.J. 190, 195 (1974). Viewed through this prism,
appellants' arguments opposing the Board's grant of the MLUL petition must be
rejected.
PPA and SC first contend that NJNG did not demonstrate a need for a
redundant pipeline system because it has never sustained a catastrophic system
or supply power failure and could not quantify the likelihood of such an event
occurring in the future. Appellants also criticize NJNG because it relied upon
Lynch's testimony, rather than that of an independent expert, to show the need
for a redundant transmission line. We disagree.
To support a MLUL petition under N.J.S.A. 40:55D-19, an applicant has
the burden of showing that "the proposed use is reasonably, not absolutely or
indispensably, necessary for public service, convenience and welfare at some
location." PSE&G, 35 N.J. at 376-77. The term "public" is expansive, i.e.,
regional, and does not mean only the local citizenry. Id. at 376. Further, the
Board must weigh all of the interests and factors to adjudicate the existence or
non-existence of reasonable necessity. Id. at 377.
Lynch, who had over thirty years of experience designing and operating
NJNG's system, stated that it would be "irresponsible" planning for NJNG to
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41
wait for a catastrophic event resulting in widespread loss of service before taking
steps to avoid or mitigate such an event. It was especially ill-advised to wait
since NJNG relied on a single interstate feed for nearly all of its gas supply to
its customers in the Central and Ocean Divisions.
Lynch also established that there had already been two service
interruptions in TETCO's interstate delivery system: the Entriken/
Chambersburg compressor station failures in January 2015, and the Delmont
compressor station failure during a 2014 polar vortex. Superstorm Sandy also
contributed to Lynch's conclusion that gas-feed redundancy was necessary to
avoid potentially devastating effects of a wide-scale supply interruption. Lynch
testified that, with a redundant gas feed in place, NJNG could have significantly
reduced, or avoided, service interruptions after the storm, since there were
significant portions of NJNG's territory "downstream" from storm-damaged
areas of the distribution system that were still "viable" and could have remained
in operation if there had been an available gas supply. Thus, contrary to
appellants' assertions, there was ample evidence in the record to support the
Board's conclusion that there was a need for the project.
Appellants argue that the Board should have rejected Lynch's reasoning,
explaining that NJNG, during each of TETCO's supply failures, was able to
A-3666-15
42
continue to provide service without a significant interruption. They also claim
that Superstorm Sandy does not support the need for the SRL because that storm
did not damage transmissions systems and did not interrupt the interstate supply.
However, it was not arbitrary or unreasonable for the Board to find that simply
because NJNG was able to avoid TETCO's service disruptions, this should
prevent it from preparing for a more severe disturbance or showing that the SRL
was "reasonably necessary for the service, convenience or welfare of the public"
pursuant to N.J.S.A. 40:55D-19. Also, Superstorm Sandy clearly demonstrated
the impact and cost that an extensive curtailment of service can have on a public
utility's customers.
PPA and SC further claim that the SRL is not necessary because NJNG
had previously undertaken six other infrastructure projects known as NJ RISE.
However, Lynch testified that the SRL was intended to complement, and not
replace, NJ RISE. He explained that NJ RISE was "the name of a group of six
NJNG projects approved by the [Board] in 2014 providing system enhancements
that improve NJNG's distribution system through storm hardening investments"
and "was submitted to the BPU in response to its January 23, 2013 Order inviting
regulated utilities to submit 'detailed proposals for infrastructure upgrades
designed to protect the State's utility Infrastructure from future Major Storm
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43
Events.'" Because four of those projects were secondary feeds to large single
feed distribution systems along the coast, the record supports the Board's finding
that the NJ RISE project did not render the SRL unnecessary.
Appellants also argue that because NJNG did not conduct an analysis
related to real-world failure scenarios, it could not quantify their likelihood, and
thus failed to demonstrate the need for the SRL as a redundant gas feed.
However, N.J.S.A. 40:55D-19 only requires NJNG to show that the SRL "is
reasonably necessary for the service, convenience or welfare of the public," not
that it is likely to experience a major large-scale supply interruption in the near
future. (emphasis added). The utility need not show that the proposed project
is "absolutely or indispensably" necessary. PSE&G, 35 N.J. at 377. Also,
contrary to PPA's assertion, nothing in NJNG's Distribution Integrity
Management Plan, the governing statutes, or applicable case law required NJNG
to seek an independent analysis to demonstrate that there was a likelihood of a
major supply system interruption to establish the need for the SRL. Therefore,
the Board appropriately relied upon Lynch's detailed testimony.
As explained above, we will not reverse an agency decision because of
doubts as to its wisdom or because the record may support more than one result.
Adoption of Amendments, 435 N.J. Super. at 583-84. We do not weigh the
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44
evidence, draw inferences and conclusions from the evidence, or resolve
conflicts therein. De Vitis, 202 N.J. Super. at 489-90. N.J.S.A. 48:2-46 states
that the Appellate Division can set aside the Board's order only "when it clearly
appears that there was no evidence before the board to support the same
reasonably." In light of these standards, we are satisfied that the Board did not
err by concluding that the SRL was reasonably necessary as a redundant gas feed
pursuant to N.J.S.A. 40:55D-19.
Appellants next argue that NJNG failed to adequately consider alternative
routes for the proposed pipeline and, therefore, the Board should have denied its
MLUL petition. Again, we disagree.
To support a MLUL petition under N.J.S.A. 40:55D-19, an applicant has
the burden of showing that no alternative route has less impact on the
environment or on the community. PSE&G, 35 N.J. at 368. Objectors to the
petition have the burden of showing the existence of a feasible alternative site.
Hackensack Water Co., 41 N.J. Super. at 425-26. Furthermore, under N.J.S.A.
48:9-25.4, the Board can designate the locations to be used for a pipeline
transmitting natural gas service if that route is "practicable."
At the evidentiary hearing, NJNG presented an expert report prepared by
AECOM and testimony by Baker on alternative routes for the pipeline. The
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45
report examined five alternate routes for the first section of the pipeline and four
alternate routes for the pipeline's second section. As previously discussed,
AECOM evaluated these routes using numerous quantitative factors: (1) built
environment (i.e., historical properties within 150 feet, school churches and
properties within 150 feet, residences within 150 feet, number of parcels
crossed, commercial and industrial buildings within 150 feet, and length within
state, county or agricultural preserved lands); (2) natural environment (i.e., land -
use/land-cover forests, stream crossings, land-use/land-cover wetlands, flood
zones and proximity to threatened and endangered species habitat); and
(3) engineering variables (i.e., miles within existing ROWs, miles paralleling
existing transmission line ROWs, number of bridge crossings, number of major
utility crossings, and length of pipeline in acidic soils).
The report also considered qualitative factors, including: visual concerns;
community concerns; special permit issues; construction/ maintenance
accessibility; and schedule delay risks. After weighing the importance of each
of those factors, AECOM determined that the route NJNG selected for the SRL
was the most feasible.
PPA asserts that the methodology AECOM used to compare the various
alternative routes was intentionally biased so as to make the JCP&L ROW Route
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appear more unattractive. The JCP&L ROW Route, however, was included as
part of one of the original batch of alternatives and, therefore, AECOM had
already devised its methodology prior to any proposal made by the
municipalities to use that route. Thus, there was no bias.
PPA further argues that the Board failed to consider the alternative route
proposed by the municipalities, Section One, Route D. However, Route D was
not a feasible or practicable alternative because the pipeline would cross
preserved farmland and environmentally sensitive lands.
Under the ARDA, pipeline construction on preserved farmland is
prohibited. The ARDA coordinates the development of county farmland
preservation programs within certain areas where agriculture is presumed the
first priority land use. N.J.S.A. 4:1C-12(c); Twp. of S. Brunswick v. State
Agric. Dev. Comm., 352 N.J. Super. 361, 364-65 (App. Div. 2002). In N.J.S.A.
4:1C-12, the Legislature found:
a. The strengthening of the agricultural industry
and the preservation of farmland are important to the
present and future economy of the State and the welfare
of the citizens of the State, and that the Legislature and
the people have demonstrated recognition of this fact
through their approval of the "Farmland Preservation
Bond Act of 1981," . . . ;
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b. All State departments and agencies thereof
should encourage the maintenance of agricultural
production and a positive agricultural business climate;
c. It is necessary to authorize the establishment
of State and county organizations to coordinate the
development of farmland preservation programs within
identified areas where agriculture will be presumed the
first priority use of the land and where certain financial,
administrative and regulatory benefits will be made
available to those landowners who choose to
participate, all as hereinafter provided.
Landowners may petition the County Agricultural Board and/or the
municipality for the creation of a farmland preservation program or municipally -
approved program. N.J.S.A. 4:1C-20 to -21. Owners of land within a
"municipally approved program or other farmland preservation program" may
enter into an agreement with the County Agricultural Development Board and,
if necessary, the municipality "to retain the land in agricultural production," as
part of the sale of a development easement to the county or a non-profit
organization. N.J.S.A 4:1C-24(a)(1); N.J.S.A. 4:1C-31. That development
easement runs with the land and is "binding upon the landowner and every
successor in interest." N.J.S.A. 4:1C-32. Consequently, land preserved for
agricultural development cannot be used to develop non-agricultural public
utility infrastructure, nor can a public utility acquire an interest in property,
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preserved pursuant to ARDA, for a non-agricultural purpose such as
constructing a natural gas transmission line.
Furthermore, a public utility cannot exercise its power of eminent domain
to acquire an interest in preserved land under N.J.S.A. 4:1C-25, which states:
The provisions of any law to the contrary
notwithstanding, no public body shall exercise the
power of eminent domain for the acquisition of land in
a municipally approved program or from which a
development easement has been conveyed pursuant to
section 17 of P.L.1983, c. 32 (C.4:1C-24), nor shall any
public body advance a grant, loan, interest subsidy or
other funds within a municipally approved program, or
with regard to land from which a development easement
has been conveyed pursuant to section 17 of P.L.1983,
c. 32 (C.4:1C-24), for the construction of dwellings,
commercial facilities, transportation facilities, or water
or sewer facilities to serve nonfarm structures unless
the Governor declares that the action is necessary for
the public health, safety and welfare and that there is no
immediately apparent feasible alternative. If the
Governor so declares, the provisions of section 12 of
P.L.1983, c. 32 (C.4:1C-19) shall apply.
Moreover, Section One, Route D required the pipeline to cross the most
streams, wetlands, and lands with threatened and endangered species habitats.
In his report, Baker assigned Route D a high value with respect to special
permits because it crossed a considerable length of preserved farmlands
restricted to agricultural use and environmentally sensitive lands. Thus, the
Board did not err by concluding that Route D was not feasible.
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Therefore, we are satisfied that the evidence supported the Board's
determination that NJNG met its burden to show that "its proposed routing [was]
reasonable, and that no alternative route is less intrusive to the environment or
community."
Finally, appellants assert that NJNG intends to use the SRL only for
profitability and not for reliability, which they claim proves that the Board's
conclusions are arbitrary and capricious because the SRL link is not "necessary
to maintain reliable . . . natural gas supply service for the general public," or
"necessary for the service, convenience or welfare of the public." PPA and SC
further assert that the size of the proposed SRL is larger in capacity than NJNG
needs to provide any redundant service to its existing customers, which supports
the company's intent only to grow its business. These contentions lack merit.
There is nothing in N.J.S.A. 40:55D-19 or in PSE&G, 35 N.J. at 376-77,
that prevents a gas transmission company from making a profit or from
attracting new customers by installing a new transmission line. As we stated
previously, NJNG must show only that the SRL link is "reasonably, not
absolutely or indispensably, necessary for public service, convenience and
welfare." PSE&G, 35 N.J. at 377.
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Moreover, NJNG offered sufficient evidence justifying its decision to
install a thirty-inch, rather than a twenty-four-inch, transmission pipeline. First,
NJNG demonstrated that a thirty-inch diameter line was necessary to meet its
peak demand by presenting "iterative flow modeling," showing various
hypothetical demand and supply situations modeled on its current system with
the SRL in place.
Second, a thirty-inch diameter pipeline was equal to NJNG's existing
system connector with TETCO's interstate pipeline in Middlesex County and
other recently installed segments. Third, NJNG showed that a thirty-inch
diameter pipeline would allow greater capacity from new interstate suppliers in
the future. Based on this evidence, it was certainly within the Board's discretion
and expertise in reviewing the construction and development of natural gas
transmission lines to find, contrary to appellants' claims, that a 180,000 Dth/day
contract was not an appropriate tool to determine the correct size of the pipe for
the project. Thus, the Board did not err by finding that the proposed thirty -inch
SRL was reasonably necessary as a redundant gas feed pursuant to N.J.S.A.
40:55D-19.
The Division of Rate Counsel argues that because a smaller diameter line
would be sufficient to transport the amount of gas set forth in the NJNG contract,
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only the cost of a twenty-four-inch line should be borne by ratepayers. However,
as Rate Counsel concedes in its brief, "this matter is not a base rate proceeding"
and, therefore, there is no need to address this contention further here.
VI.
All other arguments raised in this appeal, to the extent we have not
addressed them, are without sufficient merit to be discussed. R. 2:11-3(e)(1)(E).
VII.
In sum, we affirm the Board's March 18, 2016 decision and order granting
NJNG's MLUL petition. The Board's decision is supported by sufficient
credible evidence in the record and is neither arbitrary, capricious, nor
unreasonable.
Affirmed.
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