Francis J. Lawall, left, and Alissa Piccione, right, of Troutman Pepper Hamilton Sanders.
The jurisdictional battle between the Federal Energy Regulatory Commission (FERC) and bankruptcy courts around the country remains ongoing and, arguably, is intensifying. In June, FERC issued what was then essentially an advisory order declaring, among other things, that, if Chesapeake Energy Marketing filed for bankruptcy and sought to reject its natural gas transportation agreements—which FERC regulates—then Chesapeake must obtain both the bankruptcy court’s and FERC’s approval under Section 5 of the Natural Gas Act (NGA). As anticipated, Chesapeake filed for Chapter 11 and requested permission from a bankruptcy court in Texas to reject one of its natural gas transportation agreements with ETC Tiger Pipeline. But Chesapeake failed to seek FERC’s approval, too. Instead, it sought a rehearing concerning FERC’s June order.
Unsurprisingly, FERC denied that request at the end of August.
