FERC proposes to expand blanket certificate authorizations for natural gas pipelines

On May 21, 2026, the Federal Energy Regulatory Commission (FERC) issued a Notice of Proposed Rulemaking (NOPR) aiming to streamline and modernize its blanket certificate rules for interstate pipelines and storage facilities under the Natural Gas Act (NGA). The NOPR broadens the range of interstate natural gas pipeline projects that can be built without full case-specific approval as well as raises project cost limits for eligibility.¹ FERC also issued an order extending the deadline for interstate natural gas pipelines to construct certain facilities under a previously granted temporary waiver of existing cost limits.²

Procedural Background

The blanket certificate program (established in 1982 under Part 157, Subpart F of FERC’s regulations) provides streamlined authorization for routine natural gas infrastructure activities, partitioning projects into automatic authorization and prior notice categories. Prior to recent actions, blanket certificate-eligible project activities were limited to a maximum cost of $14.5 million per project undertaken via automatic authorization and $41.1 million per project subject to prior notice. Testing or development of underground storage reservoirs operated under a $7.9 million limit.

On April 14, 2025, the Interstate Natural Gas Association of America (INGAA) filed an emergency petition at FERC, requesting a temporary waiver to double the cost limits. Citing a national energy emergency, United States Secretary of the Interior Doug Burgum submitted formal support for the petition. Following a subsequent narrowing of the request by INGAA, FERC issued an order on June 18, 2025, temporarily raising the prior notice cost limit to $61.65 million for projects placed in service by May 31, 2027.³ In response to requests for rehearing, FERC sustained the waiver on October 20, 2025, alluding to recent reports published by the North American Electric Reliability Corporation (NERC) regarding capacity and reliability risks.⁴

Concurrently with the initial order in the INGAA docket, FERC issued a Notice of Inquiry (NOI) on June 18, 2025 in order to comprehensively evaluate permanent revisions to the blanket certificate program.⁵ The NOI generated extensive industry feedback during the ensuing comment period. Pipeline operators and trade groups broadly supported permanent cost limit increases. The proposal also garnered support from state officials who noted that outdated cost caps delay needed capacity. Conversely, EDF and other organizations opposed the increases, challenging the underlying cost studies and warning of potential ratepayer and environmental harms. The NOPR draws on this formal record established in the NOI proceeding in order to propose structural expansions of the program.

Proposed Reforms

Cost Limits

The NOPR would adopt new cost limits in order to account for the recent upward pressure in project capital requirements. Specifically, the automatic authorization cost limit would increase to $30 million (from $14.5 million), the prior notice cost limit to $86 million (from $41.1 million), and the annual cost limit for underground storage reservoir testing and development to $17 million (from $7.9 million). In a concurrent order extending the existing temporary waiver by one year, until May 31, 2028, FERC maintained the increase of the prior notice cost limit to $61.65 million.

With respect to annual adjustments to the cost caps, the NOPR would use the Handy-Whitman Index in lieu of the Gross Domestic Product implicit price deflator. The Handy-Whitman Index is more narrowly focused on infrastructure construction costs rather than the broader GDP deflator, which had not adequately reflected the annual cost increases experienced by natural gas companies. FERC clarified that it did not preemptively raise the cost limits beyond a level that is supported by historical cost increases, such that the annual adjustments will appropriately capture cost trends that materialize rather than incorporate any potentially speculative amounts.

Rate Treatment

FERC previously prohibited project sponsors from requesting incremental rates for blanket certificate projects, requiring the use of existing system rates with a presumption of rolled-in rate treatment in future Natural Gas Act (NGA) section 4 rate cases. The NOPR would allow pipeline companies to charge incremental rates for projects constructed under prior notice procedures, directly responding to requests made in the NOI proceeding to better align cost and revenue recovery. Applicants electing this option will need to provide detailed supporting statements and rate exhibits within their prior notice filings. If the rate is not protested during the 60-day notice period, the pipeline will submit an NGA section 4 filing to implement a tariff record prior to the project going into service.

For projects charging existing system rates, FERC proposes maintaining the automatic predetermination of rolled-in rate treatment. However, applicants proposing prior notice mainline expansions should submit affirmative evidence demonstrating the project benefits existing customers. Pipeline companies will formally disclose the specific purpose and beneficiaries of all blanket certificate projects to support this evidentiary burden.

Environmental Compliance

Aligning with a proposal in the NOI docket, the NOPR would authorize expansions of existing compressor stations under prior notice procedures without any cost limitations, provided the modifications are located entirely within the existing fence line of the station. To ensure adequate environmental oversight of these uncapped projects, applicants will file the comprehensive air and noise quality information mandated by Resource Report 9 pursuant to the National Environmental Policy Act (NEPA). Applicants will also adhere to the standard condition capping allowable noise at any pre-existing noise-sensitive area.

FERC proposes tightening landowner notification requirements across the program. For automatic authorizations, companies will notify affected landowners (either via certified or first-class mail) at least 45 days prior to commencing construction or at the initiation of easement negotiations, whichever is earlier. For prior notice activities, companies will issue notifications both at the initiation of easement negotiations and within three business days of a docket number being assigned to the application.

Regarding compliance with the National Historic Preservation Act, FERC declined industry requests to allow projects receiving a "no adverse effect" finding to proceed under the blanket program. Seeking to avoid the lengthy process of developing a nationwide programmatic agreement, FERC retained the strict "no effect" threshold. For compliance with the Endangered Species Act, FERC clarified that developers utilizing federal databases (such as the Information for Planning and Consultation website) need only document a "no effect" finding to proceed.

Process Timeline

The NOPR introduces several structural modifications designed to streamline the program:

• In-Service Deadlines: FERC proposes extending the strict one-year deadline to complete construction and place authorized facilities into service to two years, aligning blanket certificate timelines with standard NGA section 7 practices. 
• Receipt Points: The NOPR removes cost limitations for the construction of receipt points, classifying them under automatic authorization to mirror the regulatory treatment of delivery points.
• Abandonment Calculations: FERC proposes determining abandonment eligibility based on the actual cost of the abandonment activities rather than the hypothetical modern-day cost of replacing the targeted facilities.
• Delivery Point Abandonments: The NOPR clarifies that delivery points may be abandoned automatically if the certificate holder obtains written consent of each customer served during the past 12 months, or if the point has not provided firm or interruptible service in 12 months and is no longer covered by a firm contract.
• Storage Well Abandonments: The NOPR permits the abandonment of storage wells under automatic authorization, provided the abandonment does not alter the physical parameters of the storage field.
• Synthetic and LNG Facilities: Noting increased regulatory experience with gas interchangeability, FERC proposes eliminating the mandatory prior notice requirement for facilities transporting synthetic gas mixes or revaporized liquefied natural gas, allowing them to utilize automatic authorization if they meet applicable cost limits.
• Nuclear Power Reactor Facilities: FERC updated language to restrict blanket construction within 0.5 miles of "nuclear power reactor facilities," clarifying the restriction does not apply to nuclear storage facilities.
• Temporary Work Spaces: FERC rejected requests to allow pipelines to expand temporary workspaces beyond original footprints via landowner agreement, ensuring replacement projects under Section 2.55 maintain consistent environmental profiles.

Implications and Outlook

In her remarks at the May 21, 2026 open meeting, FERC Chairman Laura Swett characterized the NOPR as a “historic step” to streamline permitting processes and accelerate construction of domestic natural gas infrastructure. She noted that processing rote paperwork for well-understood projects wastes agency resources, emphasizing that the proposed reforms do not cut corners regarding ratepayer, landowner, or environmental protections. Commissioner David Rosner highlighted the unanimous vote in favor of the NOPR, framing it as part of a broader industry emphasis on modernizing legacy regulatory processes. He noted that the reforms would make it easier to retool existing infrastructure on brownfield sites, such as compressor stations, while balancing environmental and ratepayer concerns. Chairman Swett also clarified that the temporary waiver extension operates hand in hand with the NOPR to provide immediate industry certainty.

The NOPR retains the existing regulations allowing any person to protest a prior notice application. Echoing comments filed by TC Energy and Williams in the NOI proceeding, FERC seeks stakeholder input on whether to implement stricter eligibility criteria, such as requiring protestors to demonstrate a substantial economic interest or establishing new standing criteria for membership organizations. FERC proposes extending the timeline for parties to withdraw a protest, allowing negotiations to continue at any time prior to the issuance of a Commission order.

For interstate natural gas pipelines and infrastructure developers, the NOPR signals a substantial regulatory shift that will move larger capital projects out of the (often protracted) NGA section 7 process and into the expedited blanket certificate queue.

Comments on the NOPR are due 60 days following its publication in the Federal Register.

_{1 Notice of Proposed Rulemaking, Revisions to the Blanket Certificate Program, 195 FERC ¶ 61,128 (May 21, 2026).
2 Order Extending Deadline for Construction of Facilities Pursuant to Temporary Waiver, 195 FERC ¶ 61,129 (May 21, 2026).
3 Order Granting In Part Temporary Waiver of Regulations to Increase Blanket Certificate Cost Limitations, 191 FERC ¶ 61,206 (June 18, 2025).
4 Order Addressing Arguments Raised on Rehearing, 193 FERC ¶ 61,055 (October 20, 2025).
5 Notice of Inquiry, Blanket Certificate Cost Limitations, 191 FERC ¶ 61,207 (June 18, 2025).}
 

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