The Department of Energy’s (DOE) recent proposal to assign (FERC) the task of studying transmission congestion and designating congested areas as “national interest electric transmission corridors,” or NIETCs, has drawn fire from an unexpected source: Senator Jeff Bingaman. Senator Bingaman was the chief draftsman of Section 216 of the Federal Power Act, which also gave FERC “backstop” transmission siting authority that can be invoked when states fail to approve transmission projects in areas receiving the NIETC designation from DOE. In a September 9, 2011, letter to Energy Secretary Chu, Senator Bingaman blasted DOE’s proposal to transfer the responsibility for studying and designating NIETCs to FERC as “extremely ill advised.”
FERC staff gave a boost to the idea of giving their employer the authority to designate NIETCs in two white papers that argued the transfer of responsibility would produce a more “efficient, directed process” for transmission siting within congested corridors. Anticipating state opposition, the staff papers argue that transferring DOE’s authority to FERC will not result in an expansion of federal siting authority at the expense of the states. The consolidation would also bolster FERC’s efforts to foster transmission development, particularly to bring renewable energy from remote locations to population centers. FERC recently expanded these efforts through “Order 1000,” which establishes new ground rules for utilities to plan transmission projects specifically for renewable energy and to recover the costs of the investments from consumers who buy the power from those projects.
Renewable energy developers have been major supporters of Order 1000, and have generally favored DOE’s proposal to give FERC authority over NIETC designations. So has former FERC Chairman Joseph Kelliher, who played a key role in pushing to give FERC the backstop siting authority it obtained through the Energy Policy Act of 2005.
Senator Bingaman, however, has thrown cold water on the idea and questioned its legality. According to the senator, the bifurcation of the roles for designating congested corridors from the authority to make siting decisions when the states fail to act "was an essential part of the hard-won compromise embodied in Section 216." While Bingaman agrees that FERC should have more siting authority, “the decision to rewrite Section 216 is for Congress to make."
While the DOE proposal triggered a spate of comments and has garnered attention in the electric trade press, it has a tempest-in-a-tea-pot quality to it. FERC’s backstop siting authority has been in doubt since the U.S. Court of Appeals for the Fourth Circuit held two years ago in Piedmont Environmental Council v. FERC, that a state’s denial of a transmission certificate application does not trigger FERC’s backstop siting authority. And the Ninth Circuit’s decision earlier this year in California Wilderness Coalition v. DOE, finding that DOE’s NIETC designations in the Mid-Atlantic and Southwestern U.S. were procedurally flawed, raises a question whether having the authority would truly allow FERC to make transmission siting any more efficient than it already is.
Click here to view DOE’s proposal and request for comments, as well as the FERC staff white papers.