Energy Law Alert: Ninth Circuit
Decision Further Dismantles an Already Weakened Federal
Transmission Siting Authority
2011 - Stoel Rives, LLP
Congress' experiment with establishing federal siting
authority for transmission lines suffered another
setback after a Ninth Circuit Court of Appeals decision
issued yesterday, February 1, 2011, vacated the Department
of Energy's ("DOE") 2007 Transmission Congestion
Study (the "Congestion Study") that had
designated national interest electric transmission
corridors in mid-Atlantic and Southwestern states.
This ruling is the latest of three court and agency
decisions that have limited or undermined the federal
siting authority established at Federal Power Act
section 216 by the Energy Policy Act of 2005 ("EPAct
Congress created section 216 to confront concerns
that states were acting too slowly in siting new
transmission lines needed to address growing reliability
and congestion problems. In part, section 216 directs
the DOE to study transmission congestion in consultation
with the states, and designate certain transmission-constrained
areas as national interest electric transmission
corridors ("NIETCs"). Section 216 also
grants the Federal Energy Regulatory Commission ("FERC")
authority to issue permits to construct transmission
facilities in these NIETCs under certain circumstances.
Congress also provided that an applicant who receives
a permit to construct transmission in a NIETC would
be granted with the authority to acquire rights-of-way
by eminent domain. In sum, section 216 had the potential
to uncork the transmission bottleneck, but that potential
has not materialized.
In yesterday's decision, California Wilderness Coalition
v. U.S. Dept. of Energy, No. 08-71074 (9th Cir. Feb.
1, 2011), the Ninth Circuit vacated the DOE's Congestion
Study as well as the NIETCs designated therein, prompting
the DOE to start anew. In vacating the DOE's actions,
the Ninth Circuit ruled that the DOE (1) failed to
properly consult with affected states in preparing
the Congestion Study, as required by section 216,
and (2) failed to consider the environmental effects
of designating NIETCs under the National Environmental
Protection Act ("NEPA"). One judge, Circuit
Judge Ikuta, dissented, arguing that although the
DOE had failed to properly consult the states, the
error did not impact the NIETC designation process.
Judge Ikuta further argued that the Congestion Study
itself did not constitute a federal plan that precisely
established the scope and limits of transmission
development, and therefore any attempt to prepare
an environmental analysis would have created little
more than a speculative study containing estimates
of potential development over a vast geographic area.
He concluded that the appropriate time for NEPA determination
was when specific transmission projects were proposed.
In that regard, Judge Ikuta argued that the majority
decision defied common sense.
Yesterday's Ninth Circuit ruling added to the effective
dismantling of section 216 by the Fourth Circuit
Court of Appeals and by FERC itself. In 2006, shortly
after the enactment of EPAct 2005, FERC issued a
rulemaking order (Order No. 689) that detailed the
various requirements and procedures for applications
submitted under section 216. FERC's rules created
a cumbersome, multi-year process for obtaining a
federal permit to construct transmission within a
NIETC, and in doing so FERC effectively discouraged
participation in the program altogether.
Then, in 2009, the Fourth Circuit ruled in Piedmont
Environmental Council v. FERC, No. 07-1651 (4th Cir.
Feb. 18, 2009), that FERC has no authority to issue
permits under section 216 when a state denies an
application for siting transmission facilities. Rather,
the Fourth Circuit found that FERC's backstop authority
is limited to instances where a state withholds approval
for more than a year.
Together with these earlier decisions, yesterday's
ruling in California Wilderness Coalition leaves
the question—what remains of section 216?
For more information about yesterday's decision
or other transmission issues, please contact:
Marcus Wood at (503) 294-9434 or firstname.lastname@example.org
Jason Johns at (503) 294-9618 or email@example.com
Sarah Johnson Phillips at (612) 373-8843 or firstname.lastname@example.org