There are major misunderstandings about FERC's newly acquired power line backstop siting authority, and they can be cleared up by looking at what the federal regulation process has been for 60 years in interstate natural gas pipeline siting, Chairman Joseph Kelliher told a meeting of state regulators Nov. 12 in Anaheim, CA. Kelliher addressed the electricity committee at the annual meeting of the National Association of Regulatory Utility Commissioners (NARUC).
For now, the added power for the Federal Energy Regulatory Commission (FERC) derived from the Energy Policy Act of 2005 (EPAct) has drawn no requests for backstop authority, although Southern California Edison Co. is considering filing for FERC's intervention in its proposed Devers-to-Palo Verde 2 (DPV2) transmission line that was rejected last May by Arizona state regulators.
"So far there is not a flood of requests for transmission siting, but at some point, we have to assume there will be," Kelliher told the state regulators. "And we have to clarify the many misunderstandings that the industry has, if we actually start getting requests."
In essence, Kelliher said the natural gas pipeline siting model is the one to examine in understanding how FERC will handle transmission line requests. "I have no idea how many requests we may eventually get, but I keep hearing questions about our role, and there are five major misunderstandings that I hear."
Those areas cover (1) eminent domain, (2) route changes, (3) community input in the FERC process, (4) landowner concerns and (5) consideration for the state's regulatory findings.
Looking at the gas model, Kelliher said eminent domain is the "exception, not the rule." He cited the Rocky Mountain Express pipeline's first phase as an example, noting that eminent domain was used to acquire only 18 of 739 land plots. Similarly, he said the misconception is that FERC won't consider route changes, but in the gas sector it has considered tens and hundreds of route changes in a single project.
Kelliher said using the gas experience over six decades as an example, FERC will hold numerous community meetings if necessary, will consider individual landowner concerns and make routing change accordingly, and it takes very seriously the state regulatory record in a given case.
In the rest of his formal remarks, Kelliher talked about FERC's new enforcement role under EPAct, noting the federal regulatory panel has reached 12 settlements and issued two show cause orders out of a total of 57 self-reported violations that have been filed. In the months ahead, FERC will be working to refine its compliance policy and to clarify its prosecutorial discretion, he said. While he supports a certain amount of self-reporting of violations, Kelliher said it only goes so far.
If there is a repeated "culture of noncompliance" for a given company, then FERC needs to step in, he said.
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