FERC Declares Concurrent Jurisdiction with Bankruptcy Courts Over Rejections of Natural Gas Transportation Agreements
On June 22, 2020, the Federal Energy Regulatory Commission (“FERC”) issued an order in response to a Petition for Declaratory Order (“Petition”) filed by ETC Tiger Pipeline, LLC (“ETC Tiger”), finding that FERC has concurrent jurisdiction with United States Bankruptcy Courts to review and dispose of natural gas transportation agreements sought to be rejected through bankruptcy.
The Petition, filed on May 19, 2020, requested that FERC find that it has concurrent jurisdiction with Bankruptcy Courts under sections 4 and 5 of the Natural Gas Act (“NGA”) with respect to natural gas transportation agreements between ETC Tiger and Chesapeake Energy Marketing, L.L.C. (“Chesapeake”) and that FERC approval of any abrogation or modification of the agreements is statutorily required. Specifically, ETC Tiger requested three Commission declarations:
- The natural gas transportation agreements between ETC Tiger and Chesapeake are FERC-jurisdictional agreements reflecting filed rates approved by FERC pursuant to its exclusive jurisdiction under the NGA;
- If Chesapeake seeks rejection of the agreements