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TransCanada's second pipeline faces dismissal challenge to its state permit

PIERRE — The state Public Utilities Commission faces a decision Tuesday whether to dismiss the application by TransCanada to certify its existing permit to construct the proposed Keystone XL oil pipeline through South Dakota.

The Yankton Sioux Tribe seeks the dismissal in an attempt to stop the pipeline. The tribe lists 30 differences between current conditions and the conditions contained in the original permit that was granted by the PUC in 2010.

Dakota Rural Action is supporting the tribe's request for the dismissal.

The PUC's staff opposes the dismissal, saying it is premature.

The staff's brief argues the appropriate time is during the evidentiary hearing, after an opportunity for discovery by the various sides. The hearing will be held later this year.

State law calls for a project's sponsor to seek certification from the commission if the project hasn't commenced within four years of the permit. The purpose of certification is to show the project will continue to meet conditions set in the permit.

"Surely the Legislature did not intend for a complete bar to certification by establishing a standard that no project could satisfy," PUC staff attorney Kristin Edwards wrote in the brief. "For example, one such change that was noted by Keystone and would likely apply to any project that was dormant for four years was an increase in cost."

TransCanada through its lawyers in South Dakota opposes the dismissal. They contend various conditions in the permit were written in specific ways to allow for changes.

"The Tribe does not identify any specific changes that it says require dismissal and a new permit proceeding," lawyer James Moore wrote in TransCanada's brief.

The Yankton Sioux Tribe's brief argues that TransCanada submitted a special table showing 30 changes from the project originally permitted.

"The fact that the Commission went to the trouble to make each of these findings shows that each of these findings was key to the Commission's decision and key to the 2009 project itself," Thomasina Real Bird, a lawyer representing the tribe, wrote in a brief.

"Deviation of a project from these findings therefore constitutes a new, separate project," she argued.

If the commission grants the dismissal, TransCanada would need to start over in the permitting process. If the dismissal motion isn't granted, the evidentiary hearing on the permit certification is scheduled for May 5-8.

TransCanada operates one oil pipeline from Alberta to the south-central U.S. through the James River Valley of South Dakota.

The proposed Keystone XL would transport oil from Alberta to be shipped to China on a route crossing from Montana through northwestern and south-central South Dakota into Nebraska.

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