In a previous post, we told you about FERC's new plan to take over NIETC designation in an attempt at trumping state authority to site new transmission projects.  This isn't a new plan, but simply another attempt at a plan that has been kicking around for more than two years.  In fact, the plan seems to have been born right around the time former FERC Commissioner Joseph Kelliher left the Commission and went to work as a lobbyist for NextEra Energy, Inc.  When current FERC Chairman Jon Wellinghoff was appointed, he was handed Kelliher's torch to federalize transmission siting and neutralize state authority. 

In the wake of the U.S. 4th Circuit decision in Piedmont Environmental Council v FERC that found FERC could not exercise its "backstop authority" and take over siting of a transmission line in the event a state issued a denial, FERC and the industry went back to Congress to "put in place" new legislation that created interregional planning and cost allocation to promote utility scale renewables and also made PEC v FERC moot by specifically granting FERC backstop authority in the event of a state's denial of a transmission line.   As discussed in an Energy Law Journal article from 2009, page 454, The 2009 Waxman-Markey bill H.R. 2454, Reid's S. 539, and Bingaman's S. 2454 were supposed to take care of FERC's and the industry's "little problem". 

Chairman Wellinghoff even testified before Congress during this time, begging for federal control of transmission siting in order to transport utility scale renewables great distances to load centers.  He also mentioned the need for interregional planning and cost allocation in order to achieve this huge, expensive grid build out.

"In summary, to achieve the Nation’s renewable energy goals, Congress and Federal and state regulators, including the Commission, must address in a timely manner the issues of transmission planning, transmission siting and transmission cost allocation. Congressional action to address all three of these related areas, particularly additional siting authority to build EHV transmission lines to accommodate high quality, location-constrained renewable energy, would provide greater ability to achieve these important goals. For example, both the bill that you, Mr. Chairman, have circulated and the bill introduced by Senator Reid last week address all three of these areas. I would be happy to work with the Congress as you consider legislation to provide a regulatory framework for tackling the challenging energy issues that we face, and to provide Commission staff technical assistance respecting any legislation the Committee may consider."

However, none of these pieces of legislation succeeded.  FERC and the industry had to find another way to federalize transmission siting in order to build their desired "national grid."

When their initiatives in Congress failed, FERC and the industry began to explore achieving their goals through manipulation of existing laws in order to bestow FERC with the authority it was not granted by Congress. 

Last fall, the Congressional Research Service was tasked with creating a report that "looks at the history of transmission siting and the reason behind the movement toward an increased federal role in siting decisions, explains the new federal role in transmission siting
pursuant to EPAct, and discusses legal issues related to this and any potential future expansions of the federal role.

According to this report, "The location and permitting of electricity transmission lines and facilities have traditionally been the exclusive province of the states, with only limited exceptions. However, the increasing complexity of the interstate transmission grid, as well as widespread power outages in recent history, has resulted in calls for an increased role for the federal government in transmission siting in an attempt to enhance reliability."

Get familiar with this theme, because it's prevalent throughout all the documents I've linked in this post.  Those "widespread power outages" apparently refers to the 2003 blackout in parts of the Northeast.  What's missing from this equation is the fact that the wide geographical reach of the blackout was caused by the increasing complexity and interconnected nature of our ever-expanding grid.  The blackout was caused by human error and lack of transmission line right-of-way maintenance as determined by a joint U.S.-Canadian task force.  It was not caused by lack of transmission infrastructure, therefore, building new transmission lines won't prevent another blackout.  A future blackout will only be exacerbated by addition of new transmission lines.

In addition, where are those "calls for an increased role for the federal government in transmission siting" coming from?  They're obviously not coming from the states or the citizen stakeholders, so they must be coming from the industry or the federal government itself. 

"The Energy Policy Act of 2005 (EPAct; P.L. 109-58) established a role for the Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) in making transmission siting decisions. The act directed DOE to create “transmission corridors” in locations that would help to ease strain on the interstate electricity transmission grid. The act also granted FERC secondary authority over transmission siting in the corridors. This new federal role in a decisionmaking process that had previously been the province of state governments was predictably met with resistance from those seeking to protect local and regional interests. However, the process of creating “transmission corridors” and increasing the federal role in transmission siting has moved forward. Indeed, there have been calls for further expansion of the federal role in transmission siting by some policymakers and commentators. This report looks at the history of transmission siting and the reason  behind the movement toward an increased federal role in siting decisions, explains the new federal role in transmission siting pursuant to EPAct, and discusses legal issues related to this and any potential future expansions of the federal role."

Policymakers?  What is that word supposed to mean?  Who are these people?  Please read the entire report yourself.  I guarantee it will be a real eye opener.

"One of the most prominent commentators on transmission siting policy has been former FERC Chair Joseph Kelliher. Kelliher served as a FERC commissioner for five years and as FERC chair for three years. In a letter written to Senator Bingaman dated January of 2009, Kelliher, in the midst of his departure as FERC chair, wrote that Congress should grant FERC “exclusive and preemptive federal siting for transmission facilities used in interstate commerce.” Kelliher stressed the importance of expanding transmission facilities in order to address reliability concerns, encourage competitive wholesale markets, and respond to climate change concerns (by allowing “green” energy sources increased access to the grid). Kelliher was critical of the existing framework for electric transmission facility siting, including the EPAct transmission corridor scheme, saying that it “promises years of litigation, while diffusing responsibility for siting electric transmission facilities.”

And Kelliher scored a cushy, new job with a Midwest wind producer, NextEra Energy, who needed new transmission lines to move their product around the country, and are the ones who originally proposed this power grab to preempt state authority to FERC.  What a coincidence!

The CRS report concludes that the legal problem presented by state authority to site transmission lines can be solved through use of the Commerce Clause of the Constitution, giving Wellinghoff the green light for this new coup designed to put federal transmission siting in place.

"Legal precedent suggests that federal involvement with transmission siting would likely pass constitutional muster, assuming a connection to interstate commerce is shown." 

As both StopPATH WV and The Power Line told you in the spring, there is a huge race going on between midwest wind and offshore wind to corner the immensely profitable renewables market in the huge, coastal load centers.  However, energy corporations looking to profit from midwest wind need a $220B "national grid" to win the race.  Offshore wind is lagging behind, but it doesn't require a bunch of new land-based transmission due to its proximity to coastal load centers.  The concept of transporting midwest renewables thousands of miles to load centers doesn't make sense, physically or economically, when a different, more promising, renewable potential is located near load and is expected to be available in the very near future.  It looks like FERC has chosen to side with land-based wind by attempting to enable their necessary "national grid" that is going to be unjustly expensive to consumers and necessitate hundreds of thousands of citizens to sacrifice their properties for new transmission line rights-of-way.

The Energy Law Journal article comes to a conclusion that NIETC corridors and FERC backstop authority have not been effective in encouraging new transmission, and it has nothing to do with P.E.C v FERCIn fact, new transmission was on the rise, even before the EPAct 2005.  The article concludes that the real driver has been FERC's transmission incentives.  In fact, they quote AEP as saying, "the Commission‘s incentive policies are the single biggest contributor to rapidly growing investor interest in new interstate transmission investment."  FERC currently has an open NOI on their transmission incentives policy.  Don't miss your opportunity to comment on the single biggest factor driving expensive and unnecessary transmission projects -- deadline is September 12.

Former FERC Commissioner Suedeen Kelly's dissent of Order No. 689 (2006) summed up the problem with federal transmission line siting quite well:

"The authority to lawfully deny a permit is critically important to the States for ensuring that the interests of local communities and their citizens are protected. What the Commission does today is a significant inroad into traditional state transmission siting authority. It gives states two options: either issue a permit, or we’ll do it for them. Obviously this is no choice. This is preemption."

Chairman's Wellinghoff's "three issues" mentioned in his 2009 testimony before Congress (planning, cost allocation and siting) are now being accomplished by doing an end run around CongressFERC Order No. 1000 took care of the planning and cost allocation.  It's not surprising that a review of the more than 60 requests for rehearing filed on the Order contain accusation after accusation that FERC has overstepped its statutory authority.  Now the last piece is being achieved by FERC's recent plan to assume DOE's authority to create NIETCs and wield the sledgehammer of interstate commerce to prevent any further meddling by states, environmental groups or citizens.  FERC's recent self-annointed "authority" will most likely be tied up in the courts for many years, which will allow offshore wind to catch up and ultimately allow sanity to prevail.

As long as energy corporate "persons" are permitted to continue unfettered lobbying of both Congress and FERC to advance their financial interests, we'll continue to see higher energy costs, a more vulnerable electric grid, eminent domain land grabs, increased federal preemption, a slow economic recovery in coastal states that are prevented from developing their own local renewables, and subversion of your individual rights.



08/29/2011 1:33am

That's a fine kettle o fish you've created now Jonny!


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