How a little ruthlessness in the bureaucratic interest could advance electric corridors in the national interest
In the continental chess game of American electricity transmission development, the Department of Energy (DOE) has just made a shrewd move.
On January 12, DOE released a Notice of Intent (NOI) describing how it will implement the electricity grid provisions of the bipartisan infrastructure bill that Congress passed last fall. Among many other things, the Infrastructure Investment and Jobs Act (IIJA) strengthened the federal government’s authority to site electricity transmission lines and established new funding mechanisms for transmission development. If DOE plays this position correctly, it could box out other regulators, avoid clumsy mistakes, and make transmission development far less litigious and far more effective for the country.
The siting of transmission lines has historically been exclusively a state function, but in the EPAct of 2005, Congress established a limited “backstop” role for the federal government. The backstop siting authority was an inefficient, two-step process: First, DOE completes a study and designates areas (“National Interest Electric Transmission Corridors” or “NIETCs”) in which transmission could serve a national purpose. Second, a developer trying to build in those areas could ask the Federal Energy Regulatory Commission (FERC) to exercise siting authority – much as it does for interstate natural gas pipelines – if state agencies did not move fast enough. However, two court cases essentially gutted this authority, and it was never used.
In IIJA, Congress resurrected and considerably expanded DOE’s backstop authority. The department can now designate NIETCs based on future “transmission capacity constraints or congestion,” and now may consider (in addition to “economic growth”, “energy independence”, and “diversification” of energy supplies) two new factors:
1. Whether a site “maximizes existing rights-of-way”; and whether
2. “The designation would enhance the ability of facilities that generate or transmit firm or intermittent energy to connect to the electric grid.”
The second addition gives DOE virtually carte blanche, allowing it to designate a NIETC if more transmission in that area would increase the ability to transmit electricity — which almost by definition, it would. Rounding this off, DOE may now rely not only on its studies, but also on “other information relating to electric transmission capacity constraints and congestion”.
Given these criteria, DOE could designate virtually anywhere in the country as a NIETC. Every study of lower-cost energy and energy independence finds that we need more transmission, and collectively they show that this transmission could be sited anywhere in the contiguous US.
Image credit: Robert Orr
But in the NOI, the Energy Department took precisely the opposite approach. Rather than broadly designating NIETCs, DOE will “provide a process for the designation of National Corridors on a route-specific, applicant-driven basis.” This language suggests that the Department wants to designate lines that the developer has already analyzed as a worthwhile investment — likely an opportunity to sell low-cost, renewable energy into a region with higher energy costs. This allows transmission expansion based on the economic opportunity, which benefits consumers and increases clean energy capacity on the grid.
Crucially, this approach may also allow DOE to largely preempt FERC’s siting authority. The statute provides that after DOE has designated a corridor, FERC can issue construction permits in that corridor. FERC must find that the project meets a slew of criteria that are put in different verbiage but cover essentially the same issues that DOE has the discretion to consider (“is consistent with the public interest,” “will significantly reduce transmission congestion,” “protects or benefits consumers,” “is consistent with sound national energy policy and will enhance energy independence” and “will maximize, to the extent reasonable and economical, the transmission capabilities of existing towers or structures”).
If DOE were approving vast corridors, FERC would have to make these findings as to each project’s specific footprint. But the elegance of the project-specific NIETC designation is that if DOE builds the record and finds that the project satisfies all of those criteria, that should leave FERC with nothing more than a ‘check-the-box’ exercise. As a result, the process will become much faster and potentially less likely to fall victim to litigation. For example, under the previous “broad corridor and specific project” approach, each stage required its own, drawn-out review under the National Environmental Policy Act. DOE’s proposed project-specific corridor should mean that NEPA needs only be done once.
But that is not the most significant way DOE’s corridor-specific approach could reduce litigation. Because DOE may now consider whether the project “maximizes existing rights-of-way,” it has the authority to consider the interests of landowners whose property may be taken for the project. And that gives it the practical opportunity to improve on many of FERC’s notorious policies towards landowners — habits the agency developed while approving natural gas pipelines (which it would presumably carry over into its transmission permitting).
For example, one of FERC’s most criticized practices is to grant “conditioned” permission for a pipeline, meaning the applicant can start building the pipeline. Still, final construction and operation are conditioned on the pipeline getting all the other necessary federal approvals under the Clean Air Act, Clean Water Act, etc. This means that the pipeline developer can take people’s property, clear-cut their trees, bulldoze their land, and so on before they have the necessary permits to complete the project. But if they fail to get those permits (as has happened recently with the Atlantic Coast, Constitution, Northeast Supply, Pacific Connector, and Penn East pipelines), it means that private property has been seized and destroyed for no purpose whatsoever. Moreover, even if the project is canceled, landowners have no right to get their property back under federal eminent domain law. Likewise, there is no remedy for the significant environmental damage done by this pointless site preparation.
DOE can ensure that this does not happen with the transmission projects it approves by conditioning its approval on the applicant having obtained all of those other permits. If DOE won’t approve and send the corridor designation to FERC until all the permits are in place, then FERC cannot play its “go ahead and trash people’s property before you know whether you can build it” game with transmission projects. Eliminating just that one practice would eliminate enormous amounts of landowner anger and litigation.
Even if DOE does this now, changing administrations or agency leadership could change how landowners get treated. Legislative solutions, such as the SITE Act introduced by Senator Whitehouse and Rep. Quigley, could provide more certainty to landowners. But in the absence of further congressional action, DOE has an opportunity to demonstrate a different approach to federal siting. The best way to ensure that a corridor designation will increase the ability to “transmit firm or intermittent energy” is to create a process that makes it more likely that a project can be completed and not get trapped in litigation.