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.
to conduct a study, in consultation with the states, of electric transmission congestion and then, based on that study, designate NIETCs. Moreover, DOE must consider the environmental consequences of designating any NIETC, a step it did not take prior to designating the 2007 NIETCs. Since these steps have not been fulfilled, FERC essentially has no siting authority. Any time period that may be accruing as siting applications are pending before state commissions has become irrelevant. Because FPA § 216 grants FERC siting authority only where approval has been withheld for more than one year after the filing of an application with a state entity, or one year after the designation of the relevant NIETC, whichever is later, 38 for any applications currently pending at the state level, FERC’s authority would only be triggered one year from the date any NIETCs are designated.
In September 2011, in an attempt to address the Ninth Circuit’s determinations, DOE issued a proposal whereby it would delegate to FERC the authority to conduct congestion studies and designate NIETCs. 39 However, after receiving multiple comments raising legal and practical concerns regarding the delegation proposal, DOE, in a joint statement with FERC, announced, that it would not delegate its authority. 40 The joint statement explained that DOE would work more closely with FERC in reviewing proposed electric transmission projects under FPA § 216, as an alternative to delegating its authority. The agencies stated that they would work together to prepare transmission congestion studies, supplements thereto based on Order Nos. 890 and 1000, and the environmental analyses for any proposed NIETCs. DOE also committed: to immediately identify targeted areas of congestion; identify narrower areas of congestion than the broad areas previously studied; and solicit statements of interest from transmission developers while considering what NIETCs to designate. However, as noted above, federal siting authority only applies within a designated NIETCs, and since none have been designated, FERC’s authority is still in limbo.
Order 1000 Authority
Following Piedmont and California Wilderness Coalition , FERC recently enlarged its role in the transmission planning process. On July 21, 2011, FERC issued Order No. 1000 amending the currently effective transmission planning and cost allocation requirements. Order No. 1000 inter alia: requires that each public utility transmission provider participate in a regional transmission planning process; requires tariffs to be amended so that public policy requirements are considered in the local and regional transmission planning processes; removes the federal right of first refusal for certain new transmission facilities; and improves coordination between neighboring transmission planning regions for new interregional transmission facilities. 41 Although FERC insists in Order No. 1000 that “nothing in [the] Final Rule is intended to limit, preempt, or otherwise affect state or local laws or regulations with respect to construction of transmission facilities, including but not limited to authority over siting or permitting of transmission facilities,” 42 the practical reality might not be as clear cut as this statement suggests.
Order No. 1000 raises issues regarding siting in the context of the elimination of the federal rights of first refusal to incumbent transmission providers