The Federal Energy Regulatory Commission on May 13 updated its backstop siting rules for interstate electric transmission projects in response to new authority granted by the US Congress in 2021.
The final rule, Order 1977 (RM22-7), departed from an earlier proposal by giving state regulators more leeway to act on their own on transmission siting applications in electric transmission corridors deemed to be in the national interest (NIETCs). For instance, the agency declined to adopt a proposed provision allowing simultaneous processing of transmission siting applications at the state and federal levels.
Congress originally gave FERC limited backstop siting authority for proposed interstate transmission lines when it passed the Energy Policy Act of 2005. But FERC never used that authority after federal courts severely limited its authority to do so.
The 2021 infrastructure law sought to loosen those shackles by clarifying that FERC's authority applies in cases where state utility commissions have either failed to act on a permit application in an NIETC within one year or denied a permit. Congress also directed FERC to require transmission line developers to make "good faith efforts to engage with landowners and other stakeholders" early in the permitting process.
In December 2022, FERC issued a proposal to implement the 2021 law. One provision would have allowed transmission developers to initiate a one-year pre-filing process at FERC at the same time they apply for a state-level permit. FERC's previous backstop siting process required transmission developers to wait at least one year after applying for a state permit before initiating formal proceedings at the commission.
However, that aspect of the rule was contested by state regulators and became a key point of discussion within a joint task force of federal and state officials convened to discuss how to implement the transmission siting provisions of the infrastructure law.
The US Department of Energy on May 8 detailed 10 potential NIETCs and indicated that the list would be narrowed in the future. The corridors are a key part of awarding up to $4.5 billion in federal support for power grid additions.
FERC on May 13 held a special meeting to focus on transmission issues and voted to approve two final rules. One of those rules, Order 1920, finalized a sweeping electric transmission rule requiring US grid operators across the US to use a minimum 20-year planning horizon when developing regional plans for new power infrastructure. The rule's name reflects the year FERC's predecessor, the Federal Power Commission, was established.
Order 1977
The other final rule adopted during the May 13 special meeting was Order 1977. FERC Chairman Willie Phillips said during the meeting that the rule was given that name to recognize the year the commission transitioned from the Federal Power Commission to FERC.
Order 1977 dropped the proposed simultaneous federal/state filing provision. States will therefore have a full year to process an application to site a new transmission line in an NIETC before a filing can be made at FERC. Phillips said the change was made to reflect the views of the joint task force.
The final rule also includes several requirements for transmission developers to engage with landowners, Native American tribes and environmental justice communities in an NIETC. In addition, Order 1977 dictates a landowner bill of rights, a code of conduct for transmission developers to show good-faith efforts to work with landowners in any NIETC. Developers also must craft engagement plans for environmental justice communities and tribes.
"I'm glad we restored the one-year period for states to have the opportunity to handle these proceedings and wrap them up," said Commissioner Mark Christie, a former state regulator.
Phillips, also a former state regulator, said in a statement that he recognizes "the primary role of the states in siting transmission within their borders."
But Commissioner Allison Clements expressed reservations about restoring the one-year waiting period for developers to file with FERC, noting that transmission development already has a very long timeline.
"I'm worried that this aspect of the rule may contribute to lengthening that development timeline for certain projects," Clements said at the meeting.
Phillips and Clements praised the enhanced landowner and community engagement requirements for developers in the final rule. Those requirements will help FERC understand the impacts of transmission development, lead to better outcomes and avoid litigation for any project approvals, Phillips said.
Environmental justice remains a priority for the commission, and the community engagement plans included in the final rule are one step in spelling out such efforts, Philips told reporters after the meeting.
The rule marks the first time FERC is requiring a specific engagement plan for environmental justice communities, FERC staff said when presenting the rule. Staff said the plans and associated resource reports will have to address outreach and community impacts of projects as part of new air quality and environmental noise reports mandated to meet FERC's obligations under the National Environmental Policy Act and the Clean Air Act.
Applicants will also have to produce tribal resource reports and tribal engagement plans and describe the impacts of project construction, operation and maintenance on tribes and tribal interests, FERC staff noted.
The final rule will be effective 60 days after publication in the Federal Register.