Niskanen represents landowners impacted by interstate gas projects approved by the
federal government despite a demonstrated lack of public or market need in court and
administrative proceedings, including before FERC. Best practices and lessons-learned from
Niskanen’s substantial work with impacted landowners and communities on such proposed interstate gas projects inform and guide our comments here on FERC’s proposed revisions to its Backstop Authority regulations. Niskanen aims to establish a purposefully defined federal role in electricity transmission infrastructure siting and permitting, including specific circumstances under the Backstop Authority, to enable a repeatable, scalable process for the development of much-needed interstate transmission lines.

There is a Need for Increased Transmission Development and Use of the Commission's Backstop Authority

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PJM cautions against approaching this analysis based on a ‘top down’ analysis based on what appears to be an attempt at optimizing the deployment of renewables across the nation.

New transmission advances clean energy goals by enabling greater access to clean energy resources, which can be in remote areas, far from load and the existing transmission system.

Transmission projects also frequently face public opposition or “not-in-my-backyard” concerns for various reasons. These challenges can lead to increased costs, schedule delays, or even project cancellations.

A significant portion of the higher congestion noted in the Report is associated with multiple transmission outages in support of approved upgrades. As a result, the congestion listed should not necessarily be considered a persistent level of congestion in the Mid-Atlantic.

The study was warmly welcomed by Chicago-based Invenergy LLC, developer of the proposed $7 billion Green Belt Express line that could help carry up to 5,000 MW of Great Plains wind power to Great Lakes and mid-Atlantic population centers.
A key 530-mile segment of the line, running from Kansas to central Missouri, is a candidate for a federal loan guarantee, according to DOE — one of the new or strengthened transmission initiatives provided for DOE in the infrastructure act.

“We are encouraged by the findings of the draft study which underscore the critical need for interregional transmission to deliver cost-effective generation, meet projected demand growth and usage shifts, and improve reliability and resilience, especially in the face of increasing extreme weather events, cybersecurity risks, and physical threats,” said Shashank Sane, Invenergy executive vice president for transmission, in a statement.
“The draft study rightly focuses on identifying market barriers to interregional transmission development to accelerate deployment of clean energy,” he added.

Each compliance monitoring report shall: (1) identify any known violations of Commission regulations that occurred during the applicable period, including a description of the nature of the violation and what steps were taken to rectify the situation; (2) describe all compliance measures and procedures FirstEnergy instituted or modified during the reporting period related to compliance with Commission regulations; and (3) describe all Commission-related compliance training that FirstEnergy administered during the reporting period, including the dates such training occurred, the topics covered, and the procedures used to confirm which personnel attended.

Over the course of several sets of data requests and three site visits, DAA requested various information related to FirstEnergy’s lobbying and governmental affairs expenses and accounting.  FirstEnergy responded to those requests in both written and oral form throughout 2019 and early 2020, and submitted an affidavit from a senior FirstEnergy executive, which stated that FirstEnergy’s responses to the data requests were “to the best of [his] knowledge and belief . . . complete and accurate.”  In March 2020, the DAA audit team previewed its preliminary audit findings for FirstEnergy.

On July 21, 2020, prior to the completion of the audit report but after DAA had previewed its preliminary audit findings, the U.S. District Court for the Southern District of Ohio unsealed a criminal complaint charging the then-Speaker of the Ohio House of Representatives and others with a racketeering conspiracy relating to the passage of Ohio House Bill 6.

While FirstEnergy provided DAA with certain information related to its lobbying and governmental affairs expenses and accounting during the Audit, it did not provide any information related to its efforts on Ohio House Bill 6 and associated payments or payments related to Generation Now, the Speaker of the Ohio House of Representatives, or the Chairman of the Ohio PUC.

Each compliance monitoring report shall also include an affidavit executed by an officer of FirstEnergy stating that it is true and accurate to the best of his/her knowledge.

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"The purpose of the pre-filing process is to facilitate maximum participation from all stakeholders to provide them with an opportunity to present their views and recommendations with respect to the environmental impacts of the facilities early in the planning stages of the proposed facilities."

...an applicant may demonstrate that it has met the statutory good faith efforts standard by complying with an Applicant Code of Conduct in its communications with affected landowners.

...the term “environmental justice community” includes disadvantaged communities that have been historically marginalized and overburdened by pollution. The term also includes, but may not be limited to, minority populations, low-income populations, or indigenous peoples.

... whether the proposed rule constitutes good policy, such as, for example, whether it will be beneficial in determining whether to site electric transmission projects when the states have not done so, or whether the rule will tend to ensure almost nothing is ever sited.

State regulators are much better prepared to deal with that myriad of local concerns, including concerns over routing and costs, than FERC. Furthermore, state processes are far more convenient and user-friendly than processes at FERC, if for no other reason than geographic proximity. So, waiting one full year to allow a state to “go first” and make its decision makes sense for a lot of reasons. One obvious reason is that if the line is truly needed, the state regulators will in all likelihood approve it, and no FERC staff time and resources will need to be expended at all. The whole mantra that goes “the states are blocking needed transmission all over the country!” is simply a political and special-interest narrative. The steadily mounting increases over the past decade in transmission rate base nationally, with concomitant skyrocketing increases in transmission costs to consumers, blows up the narrative that states are systemically blocking needed transmission lines. Contrary to the narrative, states need more authority to scrutinize transmission projects for need and prudence of cost, not less, to protect consumers.

Otherwise, GBX will be placed in the position of having to decide whether to commit millions of dollars in security or cash pursuant to the executed TCA before it understands its total upgrade cost exposure associated with the Injection Rights.

Under the Department of Energy’s Transmission Facilitation Program, as envisioned in Section 40106 of the Infrastructure Investment and Jobs Act, the Department of Energy may serve as an anchor tenant on new and upgraded transmission lines, by buying up to 50% of the planned commercial capacity of lines for a term of up to 40 years. Yet, under MISO’s interpretation of Attachment FF and BPM 20, a merchant transmission project with a Department of Energy contract, and meeting Invenergy’s other suggested indicia of being sufficiently advanced stage, would still not be accounted for in MISO’s transmission planning processes unless it had an executed interconnection agreement with MISO or was included in a state or utility IRP. This cannot be a just and reasonable interpretation of MISO’s Tariff and BPM language which requires MISO to “analyze the performance of the Transmission System in meeting both reliability needs and the needs of the competitive bulk power market, under a wide variety of contingency conditions,” to “give full consideration to the needs of all Market Participants,” and consider “a wide range of potential conditions that comply with Federal, State, local and transmission owner reliability standards and public policy mandates . . . as well as other industry trends,” as Invenergy quoted in its Complaint.

Is it advisable for DOE, when selecting eligible projects for capacity contracts, to prioritize projects that have a certain percentage of capacity already subscribed? If so, what should that percentage be? What level of commitment (firm supply versus other types of capacity subscription) should DOE require eligible entities to demonstrate to be selected for a capacity contract? How should applicants be required to document such commitments? Should DOE's capacity be capped as a ratio of the firm subscription obtained before the execution of a capacity contract? If so, what should that ratio be?

MISO TOs cite to the Rock Island Clean Project as an example of why advanced-stage merchant transmission should not be accounted for in MTEP/LRTP base case analyses.  However, the Rock Island project never had final, non-appealable permits in any state. See Illinois Landowners Alliance, NFP v. Illinois Commerce Comm’n, 2017 IL 121302 (2017) (finding that the owner of the proposed merchant transmission project was ineligible under Illinois law to obtain a required certificate of public convenience and necessity). Rock Island subsequently discontinued efforts in neighboring Iowa in light of the Illinois developments. In contrast, Grain Belt Express has final, non-appealable permits in Kansas, Missouri and Indiana.  Although Grain Belt Express is making minor modifications to those permits approvals, which is typical for new project development, the underlying approvals are sound and Grain Belt Express has significantly advanced the development of the project since securing those permits including securing rights of way and land.

“There’s a reason why these adders have come to be known as ‘FERC candy,’” Christie said. “They’re really sweet for those who get it, but not the consumers who have to pay for it.”

On March 17, 2021, MISO laid out its initial roadmap for LRTP transmission solutions based on the Futures analysis. The initial roadmap included a proposed line from central Iowa, through northern Missouri, with two offshoots further south into Missouri with one in a similar area as the proposed Point(s) of Connection for the GBX Line, and finally into central Illinois.
 
It was announced during that meeting that the analysis had been completed on the proposed Transmission Solutions linking central Iowa to Northern Missouri to central Illinois and that those upgrades would be included in the LRTP portfolio. It was only after this announcement that Invenergy approached MISO to express its views regarding the GBX Line and how it interacted with LRTP.

In comments to MISO, Invenergy claimed that “[f]ailure to account for the GBX Line may cause economic harm to GBX.”

Grain Belt Express acknowledges how it intends to edge out new MISO projects by taking their place:

“Across the Midwest and Great Plains, several potential transmission projects have been proposed over the next decade to address regional reliability needs, enable the delivery of power to load centers, reduce congestion, and unlock renewables potential. While there still may be a need for localized upgrades, given that the Project addresses these broader goals, it stands to logically reason that the Project could plausibly defer/eliminate the need for certain future major transmission developments."

Invenergy also compares the expected timeline of its proposed projects to the expected timelines of the LRTP Tranche 1 projects, but that comparison does not help Invenergy’s argument, even if taken on its face value. Under the Tariff, the MTEP is “developed to facilitate the timely and orderly expansion of and/or modification to the [MISO] Transmission System.

Including projects without sufficient certainty, regardless of timeline, does not advance system reliability.

Invenergy also fails to show that the GBX Line should receive special treatment and circumvent the MISO planning process. As a project that is not yet certain, MISO properly excluded the GBX Line from the planning studies for LRTP projects.

Invenergy claims that its GBX Line, a merchant high voltage direct current (“MHVDC”) transmission project designed to carry up to 5,000 megawatts (“MW”) of energy, should have been accounted for in MISO’s transmission planning analyses even though it has not yet obtained all necessary approvals and interconnection agreements, and its prospects for achieving such statuses are not at all certain.

While Invenergy explains the status of the GBX Line noting the number of approvals and permits it has obtained, the prospects for the project are far from certain. For example, as Invenergy concedes, permits are still required in one state. In addition, on August 24, 2022, Invenergy submitted an amended Certificate of Convenience and Necessity Application in Missouri to request significant changes in the GBX Line.   Invenergy also has not yet executed interconnection agreements with half of the transmission systems it proposes to interconnect—MISO and PJM.

The Commission should deny Invenergy’s attempt to obtain preferred treatment for the GBX line.

In its Complaint, Invenergy claims “Grain Belt Express has secured voluntary easements for over 75% of the necessary right-of-way in Kansas and Missouri.” However, in its Application in Missouri, Grain Belt claims it has “[a]cquired 72% of all easements required for the Kansas and Missouri portion of the Project.” While only a difference of 3%, it is notable that the percentage of easements acquired went down in the two weeks between the filing of this Complaint and the filing of the Missouri application.

“Subject to additional oversight and approval by the Federal Energy Regulatory Commission (“FERC”), Grain Belt Express may sell and/or lease an undivided interest in the project to potential buyers and/or lessees, and Grain Belt Express and those buyers/lessees may seek to provide transmission service over the line to eligible customers as defined by FERC on a non-discriminatory basis under a FERC-approved open access transmission tariff (“OATT”). Any co-owner or lessee of Grain Belt Express that seeks to provide transmission service will be required to operate pursuant to an OATT on file with FERC that will meet the requirements of the Federal Power Act and FERC’s regulations. Grain Belt Express may also sell a cotenancy interest or lease a long-term leasehold interest in the transmission line, in which case it is not providing transmission service to such buyer/lessee because the buyer/lessee has control over that undivided interest”.

One 1018 MW interconnection request (queue number GI-083) was submitted to AECI (Associated Electric) in June 2019, with a point of interconnection to the McCredie 345 kV substation.

Four interconnection requests were submitted to MISO in April 2019. The point of  interconnection for all four interconnection requests is breaking Ameren’s McCredie – Montgomery 345 kV line, approximately 0.5 miles East of AECI’s McCredie 345 kV
substation. Two of the interconnection requests (total 1,500 MW) are being processed per MISO’s Merchant HVDC Transmission Connection Procedures (“MHCP,” Attachment
GGG) and the two remaining are being processed per MISO’s Generator Interconnection Procedures (“GIP,” Attachment X).

The converter in Missouri is proposed to be interconnected with the MISO system along the Ameren 345 kV AC transmission line connecting the McCredie substation and the Montgomery substation. The proposed connection will be made via a single 345 kV circuit from the converter station to a nearby tap point along the Ameren 345 kV transmission line. The proposed converter will also interconnect with the AECI system at the McCredie 345 kV substation. The proposed connection will be made via a single 345 kV circuit from the converter station to AECI’s McCredie 345 kV substation.

Subject to additional oversight and approval by the Federal Energy Regulatory Commission (“FERC”), Grain Belt Express may sell and/or lease an undivided interest in the project to potential buyers and/or lessees, and Grain Belt Express and those buyers/lessees may seek to provide transmission service over the line to eligible customers as defined by FERC on a non-discriminatory basis under a FERC-approved open access transmission tariff (“OATT”). Any co-owner or lessee of Grain Belt
Express that seeks to provide transmission service will be required to operate pursuant to an OATT on file with FERC that will meet the requirements of the Federal Power Act and FERC’s regulations.  Grain Belt Express may also sell a cotenancy interest or lease a long-term leasehold interest in the transmission line, in which case it is not providing transmission service to such buyer/lessee because the buyer/lessee has control over that undivided interest.

Grain Belt Express has been granted negotiated rate authority from FERC, which
may be updated. Under this authority, Grain Belt Express is required to broadly solicit interest in taking service on the Project from potential customers and accordingly, will offer the opportunity to contract for firm and non-firm transmission service to eligible customers, and to provide transmission service over its available transmission capacity to all eligible customers on a not unduly discriminatory basis. Grain Belt Express will provide eligible customers with the opportunity to contract for transmission service where available transmission capacity exists on the line and cannot and will not unduly discriminate against any transmission customer in favor of another transmission customer. All eligible customers will have equal opportunity to obtain firm and non-firm transmission service through these means.  If Grain Belt Express sells or leases one or more undivided interests to potential coowners/lessees, Grain Belt Express may be required to seek FERC approval of such a sale or lease if Grain Belt Express is a public utility subject to FERC jurisdiction at that time pursuant to Section 203 of the Federal Power Act. Furthermore, if any co-owner/lessee seeks to provide transmission service to eligible customers, such co-owner/lessee will be required to comply with FERC’s statutory and regulatory open access requirements and similarly be obligated to provide available
transmission service on its portion of the line on a not unduly discriminatory basis.

Grain Belt Express expects that its co-owners, lessees and transmission customers will consist principally of (i) entities with wind and solar energy ownership interests located in southwestern Kansas and (ii) buyers of electricity—particularly buyers seeking to purchase electricity generated from renewable resources—located in MISO and PJM who take delivery at the respective delivery points. These buyers of electricity are expected to be principally participants in the wholesale markets (utilities, alternative retail electric suppliers (“ARES”), other competitive retail suppliers and brokers and marketers) but could include retail purchasers. The ultimate beneficiaries of the Project will be retail consumers of electricity in Illinois and other parts of PJM, MISO and adjacent markets who purchase and consume electricity from renewable resources that the Project delivers to the MISO and PJM delivery points.

At this time, all of the costs associated with the development, construction and operation of the Project are expected to be recovered through a combination of sales/leases, as well
as FERC jurisdictional services including transmission service agreements with customers and other rates and charges pursuant to FERC approved tariffs and rate schedules. Grain Belt Express does not intend to seek to recover all of the costs of the Project by regional cost allocation to retail
customer load using the transmission cost allocation processes of PJM or MISO.”

The projected cost to construct the total Project and place it into operation is approximately $4.95 billion (not including network upgrades). Grain Belt Express has a viable plan for raising the capital necessary to finance the cost of constructing the Project on a project financing basis. Specifically, after advancing development and permitting activities to a status at which developers of wind and solar generation facilities and other potential customers of the transmission line are willing to enter into commercial agreements for an undivided interest (purchase or lease) or long-term contracts for transmission capacity on the Project, Grain Belt Express will enter into such contracts with interested subscribers that satisfy necessary
creditworthiness requirements. Grain Belt Express will then raise debt capital using the
aforementioned contracts as security for the debt. Grain Belt Express may also raise additional equity capital.

FERC OFFICIAL AIMS TO TACKLE NIMBYISM: Elin Katz, FERC’s director of the relatively new Office of Public Participation, is thinking about how to avoid more disorderly forms of public engagement that have plagued FERC and the power sector in recent years — such as demonstrations and lawsuits against new energy infrastructure, including pipelines. She also hopes to better educate the public about the benefits of electric transmission in particular to mitigate the “NIMBYism” often associated with the large-scale power lines needed to decarbonize the power grid.

“One of my main goals is to provide a constructive outlet for public concerns,” she said during a webinar hosted by utility transmission group WIRES. “We've seen a lot of what I consider more disruptive activities around when the public becomes concerned about energy or infrastructure.”