There’s been a lot of talk in the industry about new super powers for market enforcement, conferred by Congress on FERC in last year’s energy legislation. But this hasn’t been the case entirely....
From EPAct to Order 1000, siting authority continues evolving.
court’s guidance. The Ninth Circuit concluded that DOE had not consulted with affected states, as required by FPA § 216, and that this failure to consult was not a harmless error because it “resulted in a decision making process that was contrary to that mandated by Congress and one that deprived DOE of timely substantive information.” 26 The Ninth Circuit explained that, even if it had not determined that the congestion study must be vacated because of the failure to consult the states, it would have nonetheless held that the NIETCs must be vacated because DOE violated the law in failing to consider the environmental consequences of the NIETCs.
FPA § 216 provides that DOE in “consultation with affected States, shall conduct a study of electric transmission congestion,” and then, based on the study, designate a NIETC. The Ninth Circuit explained that “Congress could hardly have been more explicit in directing DOE to consult with affected States” in that the “statute specifically directs DOE to conduct a study of electric transmission congestion in consultation with affected States.” 27 DOE argued that it had consulted with the states via its public comment process, an invitation to a technical conference and through the National Association of Regulatory Utility Commissioners. 28 However, the Ninth Circuit found that DOE’s efforts did not amount to consultation. Consultation, according to the Ninth Circuit, is an affirmative duty, and it is not enough to solicit and receive comments. 29 Furthermore, the failure to consult the affected states was not a harmless error, in part because DOE’s actions deprived it of timely, substantive information. 30 Hence, the court vacated the congestion study.
The Ninth Circuit further noted that even if it had not vacated the congestion study due to the failure to consult, it nonetheless would have vacated the NIETCs because DOE failed to consider the environmental consequences. 31 DOE argued that, although the National Environmental Policy Act 32 applies, it was not required to undertake any review of potential environmental consequences because the designation of the NIETCs did not have any environmental effects. The Ninth Circuit disagreed, finding that “the fact that the NIETCs do not approve the actual sitings of specific transmission facilities does not excuse DOE from considering the NIETCs’ environmental impacts.” 33 DOE also asserted that the NIETCs were not major federal actions because it would be pure speculation to predict the environmental impacts of the NIETC designations. 34 The court again disagreed, stating that NIETCs are final agency actions that constitute major federal actions because the designation addresses national concerns, creates new federal rights, including the power of eminent domain, and curtail rights traditionally held by the states and local governments. 35 The Ninth Circuit determined that the failure to take a hard look at the environmental consequences was not harmless and, therefore, vacated the NIETCs designated by DOE in 2007. 36
California Wilderness Coalition essentially returns the status of federal siting authority to its starting point immediately following the enactment of EPAct 2005. 37 DOE must still fulfill its obligation under FPA § 216