The Federal Energy Regulatory Commission has issued an order that bolsters policies requiring new electric transmission facilities to be planned on a regional basis and sets broad standards for cost allocation methods that take into account public policies, such as greenhouse gas reduction and the identity of beneficiaries. See Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, Order No. 1000, 76 Fed. Reg. 49,842 (Aug. 11, 2011), FERC Stats. & Regs. ¶ 31,323 (2011).
In explaining the FERC's decision, Order No. 1000 references, among other things, federal and state policies promoting renewable energy and other low-carbon generation resources. The FERC mentions estimates by North American Electric Reliability Corporation that roughly one third of new and upgraded electric transmission facilities will be needed to integrate variable and renewable generation. Accordingly, Order No. 1000 requires that public policies, such as promotion of renewables, be taken into account in the transmission planning process, stating that the process could better identify solutions for reliably and cost-effectively integrating the location-constrained renewable energy resources needed to fulfill public policy requirements, such as the renewable portfolio standards adopted by many states.
The Energy Policy Act of 2005 directed the U.S. Department of Energy to publish a study of electric transmission congestion for public comment every three years and to designate as national interest electric transmission corridors ("NIETCs") areas that require new transmission infrastructure due to congestion. In September 2011, DOE announced that it was considering whether to delegate its transmission study and NIETC responsibilities to the FERC, based on two FERC whitepapers, a transmission siting narrative, and an outline, which provided broad policy support for delegation of NIETC-related responsibilities to the FERC. On October 11, 2011, however, DOE and the FERC issued a joint statement that DOE would not delegate its transmission study and NIETC responsibilities, but the agencies announced that they would begin working together to draft (1) transmission congestion studies mandated by Congress, (2) supplements to those studies based on FERC Order Nos. 890 and 1000, and (3) environmental analyses for proposed NIETCs.
The joint statement comes in the wake of setbacks to both agencies' authority over transmission development. In 2009, the U.S. Court of Appeals for the Fourth Circuit denied the FERC's power to authorize transmission siting specifically where a state had rejected such siting, and in 2011, the U.S. Court of Appeals for the Ninth Circuit rejected two NIETCs designated by DOE.