In re Compressor Station

258 N.J. 312

318 A.3d 658

IN THE MATTER OF PROPOSED CONSTRUCTION OF COMPRESSOR STATION (CS327), OFFICE BUILDING AND APPURTENANT STRUCTURES, HIGHLANDS APPLICABILITY DETERMINATION, PROGRAM INTEREST NO.: 1615-17-0004.2 (APD200001).

A-24 September Term 2023

088744

Argued May 2, 2024—Decided August 6, 2024

On certification to the Superior Court, Appellate Division, whose opinion is reported at 476 N.J. Super. 556, 302 A.3d 82 (App. Div. 2023).

Christine A. Roy argued the cause for appellant Tennessee Gas Pipeline Company, LLC (Rutter & Roy, attorneys; Christine A. Roy, Richard G. Scott, and Monica N. Stahl, on the briefs).

Daniel A. Greenhouse argued the cause for respondents Food & Water Watch, New Jersey Highlands Coalition, and Sierra Club (Eastern Environmental Law Center, attorneys; Daniel A. Greenhouse, on the brief).

Jason Brandon Kane, Deputy Attorney General, argued the cause for respondent New Jersey Department of Environmental Protection (Matthew J. Platkin, Attorney General, attorney; Sookie Bae-Park, Assistant Attorney General, of counsel, and Jason Brandon Kane, on the briefs).

David R. Kott argued the cause for amicus curiae New Jersey Business & Industry Association (McCarter & English, attorneys; David R. Kott and Leroy E. Foster, of counsel and on the brief).

JUSTICE NORIEGA delivered the opinion of the Court.

The Highlands Water Protection and Planning Act (Highlands Act), N.J.S.A. 13:20-1 to -35, subjects certain development projects to a stringent permitting scheme implemented and enforced by the New Jersey Department of Environmental Protection (DEP). If, however, a proposed project meets certain requirements, it may be exempt from the Highlands Act and its regulations in their entirety. For public utility projects, the Highlands Act exempts those activities that qualify as "routine maintenance and operations, rehabilitation, preservation, reconstruction, repair, or upgrade of public utility lines, rights of way, or systems, by a public utility, provided that the activity is consistent with the goals and purposes of this act." N.J.S.A. 13:20-28(a)(11).

In this appeal, we address a question of statutory interpretation: whether "routine" modifies only the term "maintenance and operations," or modifies all activities identified within the exemption. Based on the plain language deliberately crafted by the Legislature, read in context with the law as a whole, we conclude that "routine" modifies only "maintenance and operations" and does not modify the remaining activities. We therefore reverse the judgment of the Appellate Division and remand the matter for further proceedings.

I.

A.

Tennessee Gas (Tennessee) is a Delaware limited liability company and a natural gas company as defined by Section 2(6) of the Natural Gas Act (NGA), 15 U.S.C. § 717a(6). Tennessee owns and operates an interstate natural gas transmission system, subjecting it to the Federal Energy Regulatory Commission’s (FERC) regulatory authority.

Tennessee and Consolidated Edison (ConEd) executed a binding twenty-year agreement for firm transportation service.¹ In recent years, ConEd has faced a growing demand for natural gas resulting in a temporary moratorium on natural gas connections to new customers. ConEd requested that Tennessee help end the moratorium by providing 115,000 dekatherms per day of firm transportation capacity to its customers in Westchester County, New York. To meet this demand for increased capacity, Tennessee proposed its "East 300 Upgrade Project," which received a Certificate of Public Necessity by FERC as required by 15 U.S.C. § 717f.² FERC’s approval of Tennessee’s project was supported by FERC’s findings that the "project will not have adverse impacts on existing … pipelines and their existing customers"; that the "benefits will outweigh any adverse economic effects on landowners and surrounding communities"; and Tennessee’s Environmental Impact Statement, as required by 42 U.S.C. § 4332(C), concluded that "no alternatives presented] a significant advantage over the proposed [p]roject."

As part of the "East 300 Upgrade Project," Tennessee proposed to install various compressor stations along its natural gas transmission system, the "300 Line," in order to move natural gas through its system and maintain such increased flow rates. Relevant here, Tennessee sought to construct a new compressor station and appurtenant facility (Compressor Station 327) in West Milford Township, where Tennessee has an existing right-of-way on the site of a former quarry. That new station would consist of a 19,000-horsepower electric motor-driven turbine compressor unit.

Because Compressor Station 327 is located within the Highlands Preservation Area, an area that is subject to stringent environmental standards, N.J.S.A. 13:20-2, Tennessee applied to the DEP for a Highlands Applicability Determination (HAD) on August 28, 2020. Tennessee’s HAD application requested an exemption from the Highlands Act on the ground that Compressor Station 327 qualified for Exemption 11, N.J.S.A. 13:20-28(a)(11). Tennessee also submitted a copy of the complete HAD application to the Highlands Water Protection and Planning Council (Highlands Council).

Notice of Tennessee’s HAD application was published on the DEP’s Bulletin on September 23, 2020. In a joint comment submitted during the public comment period, Food & Water Watch, the New Jersey Highlands Coalition, and the Sierra Club (collectively, Food & Water Watch) opposed the proposed construction. They asserted that Compressor Station 327 would not constitute a "routine maintenance or upgrade of utility lines or systems," but would be "a massive expansion of operations in the protected Highlands Region." Food & Water Watch also objected because Tennessee’s project was to "build[ ] a new facility to push more gas through pipelines that go to New York," therefore having "no benefit [to] the people of’ New Jersey.

On October 16, 2020, the Highlands Council wrote to the DEP stating that it would not object to the issuance of a HAD under Exemption 11 for this project. The Highlands Council specifically noted that Tennessee’s "efforts to avoid, minimize and mitigate … resource impacts are sufficient to find that the project is consistent with the goals of the Highlands Act," especially because Compressor Station 327 would fall within a "historically disturbed" former quarry site where "[c]ritical wildlife habitat areas are disconnected and non-functional."

The DEP issued the requested HAD in June 2021, determining that Compressor Station 327 met the definition of a "Major Highlands Development" under N.J.A.C. 7:38-1.4, but the project did not need to be regulated by the Highlands Act because it qualified for Exemption 11 and was consistent with the Statewide Water Quality Management Plan rules as required by N.J.A.C. 7:38-2.4(a).

B.

On August 13, 2021, Food & Water Watch appealed the DEP’s HAD, arguing that Exemption 11 must be narrowly construed such that the word "routine" modifies the word "upgrade."³ The Appellate Division agreed, vacating the HAD issued to Tennessee and remanding the matter to consider whether Compressor Station 327 qualifies as a "routine upgrade." In re Proposed Const. of Compressor Station, 476 N.J. Super. 556, 574, 302 A.3d 82 (App. Div. 2023).

The Appellate Division began its analysis by noting that Exemption 11 was susceptible to more than one interpretation and was, therefore, ambiguous. Id. at 567, 302 A.3d 82. Employing the series-qualifier canon of statutory construction, the court determined that the word " ‘routine’ modifies each noun in the list of exempt activities," and declined to give weight to the Legislature’s use of punctuation. Id. at 568 & n.10, 302 A.3d 82. The Appellate Division explained that it relied on two interpretive principles -- that statutory exemptions must "be strictly but reasonably construed" and that "effectuating the legislative plan" was of paramount concern. Id. at 569, 302 A.3d 82 (first quoting Serv. Armament Co. v. Hyland, 70 N.J. 550, 558-59, 362 A.2d 18 (1976); and then quoting Chasin v. Montclair State Univ., 159 N.J. 418, 426-27, 732 A.2d 457 (1999)).

The Appellate Division acknowledged that the Highlands Act’s purpose was to limit developmental sprawl and subject all major development projects in the Preservation Area "to stringent water and natural resource protection standards, policies, planning, and regulation," while "limit[ing] to the maximum extent possible construction or development which is incompatible with preservation." Id. at 569, 302 A.3d 82 (first quoting N.J.S.A. 13:20-2; and then quoting N.J.S.A. 13:20-10(b)(9)). Applying the interpretive principles outlined above, as well as its interpretation of the Highlands Act’s purpose, the appellate court determined it was "compelled to interpret exemptions from the [Highlands] Act narrowly." Ibid.

The Appellate Division held that "routine" must modify "upgrade," otherwise "upgrade," standing alone, would be at odds with the remainder of Exemption H’s activities. Id. at 570, 302 A.3d 82. The court relied on noscitur a sociis, a maxim invoked in statutory interpretation that means "a word is known by the company that it keeps." Ibid. (quoting Jarecki v. G. D. Searle & Co., 367 U.S. 303, 307, 81 S.Ct. 1579, 6 L.Ed.2d 859 (1961)). The appellate court explained that "allowing ‘routine’ to modify ‘upgrade’ … removes ‘upgrade’ from the status of an outlier and makes it consonant with ‘maintenance and operations, rehabilitation, preservation, reconstruction, [and] repair,’ N.J.S.A. 13:20-28(a)(11)," which the court found to be "powerful evidence … of the Legislature’s intended scope of the word." Id. at 571, 302 A.3d 82 (alteration in original). The court rejected the DEP and Tennessee’s argument that reading "routine" to modify each activity would lead to an absurd result because every activity in Exemption 11, routine or not, must otherwise be consistent with the intent of the ...