Federal Siting of Electric Transmission Lines: FERC Proposes Regulations

On June 16, the Federal Energy Regulatory Commission (FERC) issued proposed regulations to implement its role in facilitating the siting of new electric transmission lines as required by the Energy Policy Act of 2005 (EPAct 2005). In particular, FERC proposed filing requirements and procedures for entities seeking FERC authorization to construct electric transmission facilities in areas which the Department of Energy (DOE) designates as national interest electric transmission corridors.

Federal Transmission Siting Authority

Prior to EPAct 2005, no federal agency could authorize the siting of new electric transmission facilities in any State. However, pursuant to Section 216 of the Federal Power Act (FPA), as added by EPAct 2005, the DOE must conduct studies of electric transmission congestion and may, based on the study, designate any geographic area experiencing electric energy transmission capacity constraints or congestion as a national interest electric transmission corridor. DOE intends to complete a study of electric transmission congestion by August 8, 2006.

FERC has authority under FPA Section 216(b) to issue permits to entities seeking to construct or modify electric transmission facilities in national interest electric transmission corridors if it finds that:

• A state in which such facilities are located does not have siting authority or state law precludes consideration of interstate benefits; or
• The applicant does not qualify to apply for siting approval in the state because the applicant does not serve end-use customers in the state; or
• The state entity with siting authority withholds approval of the facilities for more than one year after an application is filed; or
• The state conditions the proposal in such a manner that it will not significantly reduce transmission congestion or is not economically feasible.

Although EPAct 2005 also directed DOE to serve as the lead agency for coordinating all necessary federal authorizations and related environmental reviews for constructing transmission facilities in DOE-designated corridors, DOE has designated much of this lead agency responsibility to FERC.

Public Participation

FERC proposes to require a potential applicant to first prepare and file a Participation Plan detailing how the applicant will facilitate stakeholder communication and disseminate information during both pre-filing and application proceedings. The plan must provide for public and stakeholder notice, the creation of a website devoted to the project, and ensure that all filings are publicly available in each county throughout the project area.

Pre-Filing Process

The Notice of Proposed Rulemaking (NOPR) proposes an extensive pre-filing process to allow the - - applicant to compile the information needed for a complete application and to coordinate the review by other Federal Agencies. After an initial consultation with the Director of FERC’s Office of Energy Projects (OEP), an applicant must satisfy a number of specific pre-filing requirements, including the submission of: (1) descriptive information on the project; (2) proposed schedules; (3) a list of permitting entities responsible for separate federal permitting and environmental reviews; (4) a list of stakeholders; and (5) three proposed NEPA contractors for FERC to consider. The NOPR also proposes a schedule for subsequent filings, once the pre-filing process has commenced.

FERC intends to compile the information necessary for the NEPA analysis primarily during the pre-filing process and proposes to require that a preliminary NEPA document be prepared before an application is filed. FERC anticipates that the pre-filing process may take at least a year to complete.

Application Process

An applicant may file a permit application once the Director of OEP determines the pre-filing process is complete. The NOPR provides specific requirements for the content of the application, including submission of background and non-technical information concerning the project and anticipated timelines for construction and commencement of operations. The application must also be accompanied by various exhibits containing technical data, including corporate information, environmental data, engineering data, and project cost and financial data.

An applicant must also demonstrate that the proposed project: (1) will be used for transmission of electric energy in interstate commerce; (2) is consistent with the public interest; (3) will significantly reduce transmission congestion in interstate commerce and protect or benefit consumers; (4) is consistent with sound national energy policy and will enhance energy independence; and (5) will maximize the transmission capabilities of existing towers or structures.

FERC notes that the FPA requires that all reviews under federal law for the proposed facilities must be completed within one year after the application is filed, or as soon thereafter as practicable.