A few months back, the Federal Energy Regulatory Commission directed Deutsche Bank Energy Trading LLC to show cause why it shouldn’t be assessed a civil penalty of $1.5 million and be made to...
From EPAct to Order 1000, siting authority continues evolving.
circumstance to include denial of a permit would be completely out of proportion with the four other jurisdiction-granting circumstances in FPA § 216. According to the court, FERC’s reading would mean that Congress told the states that they will lose jurisdiction unless they approve every permit application in a NIETC. Under FERC’s interpretation, it would be futile for a state commission to deny a permit based on a cost and benefit analysis, land use and environmental impacts and health and safety issues. In short, a state commission’s normal review process would be pointless. As the Fourth Circuit put it, if Congress had intended to take the monumental step of preempting state jurisdiction every time a state commission denied permit in a NIETC, it would have directly said so.
As a result of the Fourth Circuit’s ruling in Piedmont, the state siting process will remain a substantive and binding process and not just a perfunctory step that must be completed before a federal application could be filed. Halting FERC’s ability to second guess a state authority’s denial of a certificate to construct transmission facilities preserves the historical role and jurisdiction that state commissions have held with regard to siting electric transmission facilities within their borders.
• California Wilderness Coalition: In contrast to Piedmont, which trimmed back FERC’s own interpretation of its authority under FPA § 216, California Wilderness Coalition essentially undercuts FERC’s authority by vacating the foundation upon which it was based. While there have been failed legislative attempts to strip or restrict FERC’s authority under FPA § 216, 20 the Ninth Circuit’s determination to vacate DOE’s Congestion Study in California Wilderness Coalition, has for the time being, essentially halted FERC’s ability to issue a construction permit for electric transmission facilities.
The fundamental prerequisite for FERC’s transmission siting authority is that the proposed facility must be located within the geographic bounds of a NIETC. FPA § 216 requires DOE to identify transmission constraints and study transmission congestion, and authorizes DOE to designate certain constrained areas as NIETCs. 21 DOE’s congestion study and any subsequent designation of a NIETC, based in the study, are the requisite precursors to FERC’s siting authority.
In August 2006, DOE issued its “National Electric Transmission Congestion Study” and requested comments on the study and on the possible designation of NIETCs. 22 Subsequently, on May 7, 2007, DOE responded to the comments filed pertaining to the congestion study and sought additional comments on its draft NIETC designations for the Mid-Atlantic and the Southwest Areas. 23 DOE formally designated two NIETCs— i.e., the Mid-Atlantic Area NIETC and the Southwest Area NIETC—on October 5, 2007, 24 and in March 2008, DOE denied rehearing of its October designation order, 25 completing the required prerequisite for federal siting authority under FPA § 216. Multiple petitions to review DOE’s actions were filed in various federal circuit courts, and all of the proceedings were consolidated in the Ninth Circuit.
The Ninth Circuit decision vacated DOE’s congestion study and remanded the matter back to DOE so that it could prepare a study consistent with the