New Jersey’s bid to force prices downward in PJM’s capacity market not only raises the alarm about market manipulation. It also reveals a dilemma that’s preventing new generation from being built...
Another Food Fight!
The new transmission siting and permitting policies could be just as messy and unruly as the old ones.
Anyone who has followed electric transmission siting knows that it has been a contentious affair. The transmission-siting process would take years to resolve (if not decades), and keeping up with the many arguments, counterarguments, and lawsuits among involved parties was like trying to keep track of a high-school food fight never quite brought under control.
The Energy Policy Act of 2005 (EPACT) was supposed to bring discipline to that wild process by giving the federal government permitting authority in certain circumstances, and by legislating that the Department of Energy (DOE) select and designate geographic areas as National Interest Electric Transmission Corridors (NIETC).
The idea behind the NIETC is a noble one: to help facilitate the construction of badly needed transmission capacity to relieve congestion problems and improve reliability. In fact, the promotion of new infrastructure investment is at the heart of EPACT.
But there’s just one problem. The new process for permitting and siting electric transmission under EPACT appears to be as flawed and contentious as it was pre-EPACT.
So watch out for flying celery.
A Convoluted Siting Process
Congress erred when it did not provide exclusive and preemptive federal siting authority as it did for natural-gas pipelines, a view that some federal regulators have privately confided to me and a great many utility executives.
This alternate bifurcated process in which the Federal Energy Regulatory Commission (FERC) can issue a construction permit only under certain circumstances for transmission projects located in NIETCs, as designated by the DOE, seems ill-conceived.
Allegheny Power last year, in filings, was worried. “By reviewing specific projects, DOE will duplicate and possibly usurp the role of state siting processes and potentially limit FERC’s options if backstop authority is needed,” it stated. “In addition, by rejecting specific proposals, DOE will limit siting options. … Congress intended DOE to undertake a broad designation of NIETCs but did not intend to reassign to DOE the siting processes and authorities that now reside with the states and, under EPACT 2005, with FERC as backstop.”
But read some of the hundreds of third-party comments sent to DOE in the wake of its EPACT-mandated transmission congestion study completed in early August, and it’s clear that the DOE is being hailed as ruler of all transmission siting.
DOE strongly refutes this claim, but the evidence appears otherwise. As if the rulemaking comment period were the siting process itself, one can find protests against certain proposed Northeast transmission projects in letter-writing campaigns by senators and congressman, by farmers and individuals, and even by governors. Every stripe of agency or association, as well as some stakeholders, has asked DOE to consider any number of policies that fall outside the scope of the legislation.
Are these critics making an end run around the state siting process in the hopes that by designating the corridors or opposing them, such projects will be guaranteed of acceptance or rejection preemptively, if and when FERC must decide to issue a