US DOE proposes long-awaited national-interest electric transmission corridors

The US Energy Department proposed long-awaited national-interest electric transmission corridors May 8, a key step in awarding up to $4.5 billion in federal support for power grid expansion.

"These are areas that the Department of Energy has determined are high priority for more transmission buildout," Energy Secretary Jennifer Granholm said during a press call. "Our findings show that a lack of capacity in these areas could hurt or is already hurting consumers."

The proposed corridors, based on a 2023 National Transmission Needs Study, encompass 10 geographic areas, dubbed NIETCs. They would be designated by the DOE pursuant to the Energy Policy Act of 2005, a law that directed the agency to designate NIETCs based on studies of transmission congestion costs. The statute was revised in 2021 to clarify that the Federal Energy Regulatory Commission has backstop siting authority for proposed interstate transmission projects in NIETCs when state regulators deny or fail to act on construction permit applications within one year.

To date, the DOE has not attempted to finalize any corridors despite the Energy Policy Act's mandate. FERC has yet to exercise its backstop siting authority since its implementation rules were vacated by a federal appeals court in 2009.

However, FERC is set to finalize new backstop siting rules May 13. Mindful of the state level permitting process, multiple current and former FERC members see the rules as a way to encourage state utility commission approvals without overriding permitting decisions.

Projects within the DOE's corridors will be eligible for special financing streams through the Inflation Reduction Act, Granholm said. The law established a $2.5 billion revolving fund that authorizes the DOE to act as an anchor tenant by purchasing transmission capacity on national-interest lines that may not otherwise get built. The statute authorizes another $2 billion in DOE loan financing for national-interest projects.

The potential NIETCs range in width from less than 1 mile to nearly 100 miles, with lengths ranging from 12 to 780 miles, according to a DOE news release. The corridors also "often parallel existing rights of way such as state highways and high-voltage transmission lines," the DOE said.

Invenergy noted that the DOE's proposed designations include the entire footprint for the merchant developer's 800-mile Grain Belt Express project, a high-voltage direct-current line that will boost transfer capacity between the Southwest Power Pool, Midcontinent ISO and PJM Interconnection wholesale power markets, from Kansas to the Illinois/Indiana border.

"Designation in the Midwest is especially important for MISO, as the highest risk area in the country for supply shortfalls," Shashank Sane, Invenergy's executive vice president of transmission policy, said in an email.

Granholm said the next step in the DOE's designation process is a "due diligence" phase, with public comments due by June 24, followed by reviews under the National Environmental Policy Act.

After receiving comments, the DOE plans to narrow its list of proposed NIETCs in fall 2024.

A senior DOE official noted that the National Transmission Needs Study found that areas in and around New Mexico, Oklahoma, Colorado and Texas have the greatest transmission congestion costs.

"This will unlock a significant amount of capacity across all of these NIETC designations," the official said.

The DOE's proposed corridor designations will complement a new permitting program, finalized last month, that makes the DOE the lead permitting agency for transmission project reviews under the National Environmental Policy Act, Granholm said. The program establishes a two-year timeline for the permitting process.