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Transmission Line-Siting Under EPACT: Shortcut or Short Circuit?

The 2005 Act, designed to streamline projects, may fall short of that goal.

Fortnightly Magazine - August 2007

that date. 32 Following the issuance of a final environmental document, FERC will act on the construction permit. 33

FERC is not the only federal agency that would need to approve a proposed transmission project. FERC, however, is the lead federal agency for transmission siting and is required to coordinate all applicable federal authorizations, such as cultural and historic preservation reviews, and any related environmental reviews. 34 Moreover, EPACT provides that once an application has been filed, all permit decisions and environmental reviews shall be completed within one year. 35

One of the implied goals of the new transmission-siting procedures and FERC’s “backstop” authority was to speed up the siting process. Because FERC previously has not sited electric-transmission facilities, the question remains as to whether or not the siting process will stick to its projected timeline. In certain circumstances, assuming no major jurisdictional problems or environmental issues, a permit application could spend a year before the state PUC, followed by a year of “pre-filing” at FERC. Then FERC has a year to make its determination. This potential three-year timeline does not take into account any of the right-of-way and eminent-domain issues that will need to be sorted out prior to construction. Because it may not be possible to construct any proposed transmission facility without condemnation, this process must be taken into account because it can extend a project’s timeline. Property owners on the right-of-way will need to be identified and notified about the proposed facility. The more property owners involved, the longer this process and any condemnation process could take.

State Siting Authority, Interstate Benefits, And End-Use Customers

A vast majority of the states have some type of regulatory body with the authority to issue construction or siting permits for electric transmission facilities. 36 States differ, however, as to the type of entity that is subject to state jurisdiction and as to the elements that can be considered when evaluating a permit application. It is these regulatory fundamentals that will determine whether and when FERC may step into the siting process.

The type of entity that is proposing to build the transmission facility may be dispositive when determining whether FERC or a state has jurisdiction over a transmission project. Historically, states approved the siting of transmission facilities being constructed by public utilities that were subject to state jurisdiction because they served retail customers in the state. Public utilities, however, are not the only potential builders of transmission facilities. For example, an independent transmission company (ITC) providing only interstate transmission service or a generating company (genco) connecting new generation to the grid also might want to build transmission lines to deliver power to congested areas.

ITCs and gencos, however, are not necessarily “public utilities” under state law, and their transmission property may or may not be subject to state PUC review. The answer is highly state-specific. One example illustrates the complexity of this issue. In Pennsylvania, the PUC transmission-line siting regulations apply only to “public utilities” as defined under the state public utility code. 37 ITCs and gencos do not fit within that