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Transmission Tug-of-War

From EPAct to Order 1000, siting authority continues evolving.

Fortnightly Magazine - November 2011

“electric company” in Maryland and specifically that the Maryland entity, PATH-Allegheny, could not seek its own certificate. As a result of this ruling, the Maryland PSC stated that no application to construct the proposed transmission line had been properly filed, and thus, any time period pertaining to possible federal siting authority had not yet begun to run and would not begin to run until a proper electric company filed a complete application.

In December 2009, Potomac Electric submitted a second application regarding the Maryland portion of the PATH project on its own behalf as the entity that would construct, operate and maintain the transmission line. In July 2010, the Maryland PSC held that Potomac Edison was the proper applicant for a certificate to construct the PATH project in Maryland. 52 Potomac Edison qualified as an “electric company,” because it physically transmits or distributes electricity in the state to retail customers. Pursuant to a new corporate arrangement, it would construct and install the Maryland transmission facilities; therefore, according to the Maryland PSC, Potomac Edison was the proper certificate applicant. 53 The Maryland PSC staff argued that Potomac Edison was the proper applicant for the certificate, and the Maryland PSC should consider the impact of its ruling upon any potential federal jurisdiction over the siting of transmission lines within Maryland. Maryland PSC staff raised the specter that, following the September 2009 order, the proposers of the PATH project could go to FERC under FPA § 216, since PATH-Allegheny did not qualify as an “electric company” under Maryland law and, therefore, could not obtain the required state certificate. 54

As the proceeding in Maryland indicates, the type of entity that proposes to construct a line could affect whether federal siting authority could be evoked in a NIETC. In the PATH proceeding, the applicable corporate structure was revised in a way that permitted the state to maintain authority over the project; however, events might not play out the same way in the future. Once the applicable tariffs and agreements are revised and approved by FERC as instructed in Order No. 1000—providing that the planning must not discriminate against non-incumbent transmission developers—the FERC tariffs should have the force and effect of law. 55 Therefore, if the planning process in the approved tariff is followed and a non-incumbent transmission developer is chosen to construct a project in a NIETC and said non-incumbent transmission developer cannot seek regulatory approval at the state level, FPA § 216 provides that a federal, not a state, construction permit could be sought. In other words the combination of the NIETC designation, the tariff requirements under Order No. 1000, and the provisions of FPA § 216 might push the permitting process outside of a state’s historical jurisdiction.

Prior to Order No. 1000 such scenarios were less likely because of the right of first refusal. The right was generally allocated to entities that served retail customers in a service territory or footprint, i.e., an incumbent transmission provider. Such entities did not have a problem meeting the threshold requirements for seeking state authority to construct

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