DOE Adjusts Its Delegation Proposal

On October 11, 2011, the United States Department of Energy (DOE) announced that it will work more closely with the Federal Energy Regulatory Commission (FERC) in reviewing proposed electric transmission projects under section 216 of the Federal Power Act (FPA). DOE was considering a delegation of its obligation to conduct triennial congestion studies and its authority to designate national interest electric transmission corridors (NIETC) under the Energy Policy Act of 2005 (EPAct 2005) to the FERC. However, DOE determined that working with FERC is the "best way" to help "build the electric grid of the 21st century to compete in the global economy."1 DOE's decision not to delegate its authority was in response to comments on the proposed delegation submitted by various stakeholder groups.

One reason that was offered for the proposed delegation is that transfer of the DOE-designated functions could make it easier to site interstate electric transmission projects, including those intended to facilitate the delivery of renewable energy across states. As suggested in the FERC staff narrative posted on DOE's website, the delegation could have also avoided duplicative and possibly overbroad environmental review under the National Environmental Policy Act (NEPA). The delegation to FERC would have consolidated the congestion studies and NIETC designation authority with the backstop construction permitting authority for interstate transmission that was granted to FERC in EPAct 2005. Instead, DOE and FERC will work together to prepare drafts of the transmission congestion studies mandated by EPAct 2005, supplements to the congestion studies based on regional and inter-regional transmission plans to be prepared pursuant to FERC Order nos. 890 and 1000, and the NEPA analysis for any proposed NIETC. In addition, DOE announced other measures it would take to execute its FPA Section 216 powers "better, faster, with more transparency, and more effectively."2

Background

Section 1221 of EPAct 2005 establishes the federal transmission backstop siting authority.3 DOE was directed to conduct, in consultation with affected states, a study of electric transmission congestion every three years. The DOE could, after considering recommendations from interested parties, including the states, designate a geographic area experiencing transmission congestion as a NIETC. Following notice and opportunity for hearing, FERC could authorize the construction of electric transmission facilities in a NIETC, if it finds that (i) a state does not have authority to approve the siting of the interstate transmission facilities or to consider the interstate benefits, (ii) the applicant is a...