December 19, 2022 By Kevin Y. Chen
Categories: Permitting , Infrastructure , Energy , FERC , Land Use
On December 15, 2022, the Federal Energy Regulatory Commission (“FERC”) issued a notice of proposed rulemaking in which the Commission proposes to implement its newly clarified authority under the 2021 Infrastructure Investment and Jobs Act (“IIJA”) to issue permits if a state denies an applicant's request to site transmission facilities in a designated National Interest Electric Transmission Corridor (“National Corridor”).
Such change has potential—in certain cases—to tilt the balance of transmission permitting authority toward FERC and away from the states (where such authority traditionally has been held), accelerating much-needed siting of interstate transmission projects. Although no National Corridor designations are currently in effect, the Inflation Reduction Act provides $2 billion for loans to support electric transmission lines in National Corridors. And the Department of Energy, which makes National Corridor designations, has said that it intends to provide a process to designate such corridors on a route-specific, applicant-driven basis to address roadblocks as they arise. Whether that process will be successful—thus allowing FERC to exercise its expanded permitting authority—remains to be seen.
Background
In 2005, the Energy Policy Act provided FERC authority to issue permits for construction or modification of electric transmission facilities in National Corridors—i.e., geographic areas designated as transmission-constrained or congested—if an applicant was unable to obtain a state permit for certain specific reasons.
These reasons included when a state “withheld approval” of the facilities for more than one year after the application was filed or the National Corridor was designated, whichever was later. FERC Order No. 689 had interpreted this to include any action that resulted in an applicant not receiving state approval within one year, including a state's express denial of an application. But a 2009 decision of the Fourth Circuit struck down that interpretation. That decision—along with a 2011 decision of the Ninth Circuit vacating the only two National Corridor designations—brought FERC's transmission permitting activity to a halt.
Fast forward to 2021: the IIJA amended various aspects of the Energy Policy Act, including by removing the phrase “withheld approval” and expressly providing that FERC's power to approve siting of transmission facilities in National Corridors includes when a state has denied an application.
Proposed Rulemaking
FERC, among other things, proposes to:
Conclusion
As we've previously reported, expansion of interstate transmission infrastructure is one of the greatest challenges facing national decarbonization and is a key item on FERC's agenda. This most recent proposed rulemaking holds promise to accelerate the siting of such projects by expanding FERC's ability to step in where states reject, delay, or obstruct interstate transmission development.
Comments on the notice will be due 90 days after publication in the Federal Register.