Pipeline sues federal regulators in fight over fine for demolition of dilapidated Ohio

CLEVELAND, Ohio – The owners of a major, multistate pipeline project that spans northern Ohio went to court Friday in a fight with regulators that stems from a dilapidated house.

Energy Transfer and its subsidiary, Rover Pipeline LLC, filed a lawsuit against the Federal Energy Regulatory Commission in U.S. District Court in Akron. The companies allege they face a fine of more than $20 million from the commission for failing to disclose their intentions to remove the home in Carroll County in 2016.

The regulatory commission ordered the companies to appear before an administrative law judge for a hearing in September. The companies, however, said the issue belongs in federal court, where it can litigate its claims and receive an impartial review, “rather than in an in-house enforcement proceeding.”

The case centers around the pipeline’s application process. Regulators contend the companies made misrepresentations and omitted information about the home during the application process to build Rover’s $4.2 billion pipeline.

But in the lawsuit, the companies claim that the information about the home was immaterial to the project and, therefore, didn’t need to be passed along.

A spokeswoman for the regulatory commission declined to comment. An attorney representing the companies could not be reached.

The companies purchased the Carroll County property in 2015. It was part of the land where Energy Transfer sought to place a business operation center. The home was built in 1843, and it had holes in its roof, rotting floors and electrical and plumbing problems that needed to be overhauled, according to the lawsuit.

It says that, at one point, a local fire department “even considered burning it down as part of a training exercise.”

“[The companies] also explained that they had every legal right to remove the house, and their plans for its removal were known” to a state historic preservation officer, who didn’t object, the lawsuit says.

The regulatory commission claimed the companies violated the regulation requiring full and complete applications. Earlier this month, the case was assigned a hearing.

The lawsuit claims that an administrative judge ruled in favor of the commission in every hearing since 2005, except one.

“FERC’s practices and procedures already have denied, and will continue to deny, [the companies] ‘impartial adjudicators’ and will subject them to a tribunal lacking the appearance or reality of justice,” the lawsuit says.

The pipeline has the capacity to transport 3.25 billion cubic feet a day of natural gas from the Marcellus and Utica shale production areas of eastern Ohio and nearby states to regions across the country and in Canada. Its path crosses northern Ohio.