The development of federal authority to site transmission projects within congestion corridors, mandated by the Energy Policy Act of 2005 (”EPAct 2005″), is occurring on two related fronts.  EPAct 2005 created backstop authority whereby  FERC can site transmission when states fail to do so.  FERC has received comments in its rulemaking regarding how it plans to implement this authority, and will likely finalize the rule in the next few months.  Meanwhile, DOE awaits comments on the study, issued last month, identifying areas of transmission congestion that would be subject to FERC's new authority.   

DOE's National Electric Transmission Congestion Study identifies those portions of the Eastern and Western Interconnections (but not ERCOT) that experience sufficiently constraining congestion as to warrant federal attention and possible designation as a national interest electric transmission (NIET) corridor.  To be considered, public comments on the Study must be submitted to DOE by October 10. 

Within a NIET corridor, FERC can permit and condemn right-of-way for construction of an electric transmission line provided that FERC finds that 

·        the state where the line is to be located lacks siting authority or state law prohibits siting to achieve interstate (as opposed to intrastate) benefits;

·        the permit applicant is not eligible for site approval because it does not provide retail service in the state;

·        the state with siting authority fails to act on an application within one year; or

·        the state siting body attaches conditions that will prevent congestion reduction or make the new line economically infeasible. 

This FERC authority, added in the Energy Policy Act of 2005, created for the first time federal eminent domain for electric transmission.  This differs from eminent domain that has been available for natural gas pipelines since enactment of the Natural Gas Act (NGA) in 1938 inasmuch as the NGA authority is exclusive and preempts state siting and condemnation.  In contrast Congress emphasized and FERC and DOE have affirmed their understanding that the new FPA electric transmission siting and condemnation authority is supplemental to and does not preempt state law except in the four narrow situations above.  Owner compensation for land federally condemned for natural gas pipelines and electric transmission lines continues to be determined under state law. 

The DOE Study identifies three types of congestion warranting federal attention.  First are two critical areas where existing or growing congestion is severe:  metropolitan New York extending down the MidAtlantic into Northern Virginia and Southern California from Los Angeles to San Diego.  Second are four areas of concern:  New England, Phoenix-Tucson, Seattle-Portland, and the San Francisco Bay.  Lastly are conditional areas not presently congested but which will likely see development of new generation additions that will cause congestion absent new transmission lines:  wind and coal generation in Montana-Wyoming; wind in the Dakotas-Minnesota and Kansas-Oklahoma; and nuclear in the Southeast. 

The Study makes no NIET designations at this time; designations are not expected until after the period for public comment expires October 10.  DOE disappointed several applicants who had sought early NIET designations, including American Electric Power for its AEP I-765 Corridor, Allegheny Energy for its Trans-Allegheny Interstate Line (TrAIL), the Bay Area Municipal Transmission Group for its San Francisco Greater Bay Area Corridor, Pepco Holdings for its Mid-Atlantic Power Pathway (MAPP), and NYRI Inc.'s New York Regional Interconnect, among others.