Utility regulators balk at recommendation that Congress have more say over power lines

Source: Hannah Northey, E&E reporter • Posted: Friday, February 8, 2013

A bipartisan report out today calling on Congress to allow federal regulators to approve certain high-voltage power lines even if states oppose them has drawn the ire of the National Association of Regulatory Utility Commissioners.

At issue is a report the Bipartisan Policy Center released today, which calls on Congress to enact new, targeted backstop siting authority for the Federal Energy Regulatory Commission to approve multistate high-voltage power lines when states fail to do so after a certain amount of time.

The report focuses on the most controversial part of the Energy Policy Act of 2005 that allows the Energy Department’s secretary to designate a “National Interest Electric Transmission Corridor” based on the congestion assessment and gives FERC backstop authority over siting transmission line projects if state regulators don’t act on the proposals in a year’s time (ClimateWire, Jan. 17, 2012).

The provision has never been used, and FERC’s authority was significantly curtailed by recent decisions in the 4th and 9th U.S. Circuit Courts of Appeals.

The Bipartisan Policy Center’s report recommends allowing FERC to approve a proposed power line if a state denies a project or fails to act within 18 months of receiving a complete application or if a state doesn’t have authority to approve a certain project. A neighboring state siting authority would have to approve the project before FERC could step in.

The central idea is to allow FERC to break through stalled transmission policies implemented in 2005 that no longer recognized how conditions have changed, including a spike in isolated pockets of renewables, increased congestion and stronger storms that threaten reliability, said former Rep. Rick Boucher (D-Va.), who co-chaired the BPC’s Electric Grid Initiative that developed the report.

Former FERC Chairman Curt Hébert and Allison Clements, director of the Sustainable FERC Project at the Natural Resources Defense Council, also co-chaired the panel.

Boucher said at a news conference today that while the recommendations will be heavily debated in Congress, there are “good prospects” that lawmakers will listen. Boucher said he was a skeptic of providing FERC with such authority in 2005 but has since witnessed changes in the energy landscape that transmission construction has failed to match.

“We stand today with no corridors being officially designated, even at the starting gate; the current FERC authority just doesn’t work,” he said. “There’s not a single project that’s come to fruition through that FERC backstop authority. … There were projects that deserved to be awarded that authority.”

But NARUC officials were quick to voice their concerns with the recommendations.

NARUC President Philip Jones in a statement thanked the policy center for reaching out to NARUC and allowing the group to participate but said NARUC as an association sets its policies through resolutions and has “not taken positions on many of the policies outlined in the report.”

Jones also voiced the group’s ongoing concern about granting FERC backstop authority. The group has repeatedly pointed out that utilities are currently required to show state regulators a power line is needed, and changing that process could weaken state oversight.

“The report recommends that Congress give federal regulators permission to overrule a legitimate state decision determining that a power line is unnecessary if a nearby state with different needs and resources says that it is,” Jones said. “Essentially, this policy would give one state de-facto siting authority over another, which is certainly against congressional intent.”

Jones noted that the current law limits FERC’s backstop authority to power lines in National Interest Electricity Transmission Corridors, or NIETCs, but the report recommends greatly expanding FERC’s authority nationwide.

“This recommendation abandons the existing law’s goal of improving the efficiency of the transmission network by reducing congestion in favor of policies that increase rates for retail customers who receive little or no benefits, without necessary and proper oversight by the states,” Jones said.

Jones said there is little evidence that states have failed to “update the grid” or that such sweeping legislation is required.

But Boucher said the proposed recommendation “dignifies” the states’ role by requiring FERC to consult with states and added that any potential project would be vetted through a process the agency has established under its new Order 1000. Boucher also noted that an adjacent state authority would need to approve the line — a new requirement.

Boucher said transmission developers are unlikely to be uncooperative with state entities. “I don’t think there’s a risk that project developers … will try to game the system,” he said.

The BPC report also recommends that federal agencies be able to recoup costs associated with reviewing applications for new power lines, that agencies increase planning and coordination across their jurisdictions and that technology is used to detect and fix blackouts more quickly.