FERC last Thursday issued a final rule that gives the agency the authority to consider requests for interstate electric transmission construction permits if a state siting agency has “withheld approval” on a project for more than one year or it has imposed conditions on a project that would prevent it from significantly reducing transmission congestion.

Chairman Joseph Kelliher defined “withheld approval” as meaning a state siting authority has failed to act on a power transmission project application within a one year period or it has denied the application, which prompted Commission Sueden Kelly to charge that the Federal Energy Regulatory Commission was preempting the states’ transmission siting authority.

The final rule “gives states two options — either issue a permit or we’ll do it for them. Obviously this is no choice. This is preemption,” Kelly noted, adding that Congress under the Energy Policy Act of 2005 (EPAct) did not give FERC the permission to override states’ decisions with respect to siting electric transmission facilities.

Most of the commissioners expressed respect for state jurisdiction over transmission siting, saying they hoped that they never have to use the new authority under the final rule. Commissioner Marc Spitzer said he thought it should be used “sparingly.” He likened the agency’s new authority to possessing a nuclear weapon. “[We] possess a weapon with the intent that it not be used.”

A key change in the final rule, according to Kelliher, is the Commission making the pre-filing process mandatory for power transmission projects, and pledging not to initiate the pre-filing process at FERC during the first year following the filing of an application with the state. “We not only bar formal applications for construction during the first year of a state proceeding, we also bar initiation of pre-filing during that year,” he said.

That gives state siting authorities “one clear year” without any interference from FERC to make timely decisions, Kelliher noted.

Congress in EPAct gave the Federal Energy Regulatory Commission “some limited authority” to site power transmission facilities, but it did not completely preempt states’ authority in this area. The states will continue to site most of the electric transmission facilities, while FERC will supplement states’ efforts, according to Kelliher.

FERC can only issue construction permits for transmission projects located in a national interest corridor that is designated by the Department of Energy. And even in areas where there are national interest transmission corridors, FERC can only issue permits where states do not have the authority to site these facilities or consider the interstate benefits of a project, or the applicant does not qualify for state siting under state law, or the state siting body has withheld approval for more than a year or imposed strict conditions on a project.

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