FERC Proposes New Rules to Jumpstart Electric Transmission Buildout

The Federal Energy Regulatory Commission (FERC) on Dec. 15, 2022, proposed an important new set of regulations to implement certain changes recently passed by Congress to the agency's authority to license new interstate electric transmission lines. FERC's proposed regulations aim to expedite the construction of new transmission infrastructure around the country and, if finalized, would be critical to ongoing efforts by the Biden Administration to interconnect new renewable energy generation to the nation's electrical grid.

By way of background, on Nov. 15, 2021, President Joe Biden signed into law the Infrastructure Investment and Jobs Act (IIJA). Among other measures, the statute amended Section 216 of the Federal Power Act to streamline FERC's authority to approve certain interstate electric transmission projects around the country. Section 216, which was originally ratified by the Energy Policy Act of 2005, specifically empowers FERC with "backstop" siting authority to approve the construction or modification of interstate electric transmission facilities in discrete "national interest electric transmission corridors" (National Corridors), designated as such by the U.S. Department of Energy. Due to various adverse federal appellate judicial decisions, FERC has not attempted to use its backstop siting authority under Section 216 since 2011.

In the IIJA, Congress amended Section 216 to address ambiguities introduced by these judicial decisions surrounding FERC's discretion in this arena and thereby rehabilitate FERC's backstop siting power for electric transmission facilities. Notably, though, Congress retained the limited nature of FERC's permitting authority under Section 216, clarifying that the agency can issue a permit to construct a transmission line in a National Corridor only where the relevant state regulatory body has either denied such a construction permit application or failed to act on it in a timely manner. To further flesh out FERC's powers, Congress directed the agency to issue new rules establishing how it would process permit applications. FERC's Dec. 15 proposed rule does just that.

Proposed Revisions

Specifically, FERC proposes the following revisions to its regulations to implement the IIJA's Section 216 amendments:

• The definition of "national interest electric transmission corridor" would be amended to include any geographic area that is expected to experience energy transmission capacity constraints or congestion.
• A permit applicant would now have to demonstrate in its application to FERC that the relevant state regulatory body has either denied its application to construct, not acted on it in a timely manner or conditioned its approval in such a way that renders the proposed facilities economically infeasible or undermines their ability to significantly reduce transmission capacity constraints or congestion.
• The pre-filing process would include an additional opportunity for state input before FERC determines that the pre-filing process is complete and that an application may be filed.
• Applicants must now develop and file an "Environmental Justice Public Engagement Plan" as part of their "Project Participation Plan," an essential element of the application process.
• Currently, there is a one-year delay following the submission of state permit applications before FERC's pre-filing process may commence. This delay would be eliminated, thus allowing simultaneous processing of state applications and FERC pre-filing proceedings.
• A new Applicant Code of Conduct would provide a means by which an applicant could demonstrate that it has met the statutory good faith efforts standard in its dealings with affected landowners.
• Applicants would have to file three new resource reports with their applications, including an Air Quality and Environmental Noise Resource Report, a Tribal Resources Report and an Environmental Justice Report.
• An applicant's website would have to include an interactive mapping component to provide users with the ability to locate the proposed facilities in relation to specific properties and other features.

Comments from interested parties on these proposed regulations are due within 90 days of the proposed rule's publication in the Federal Register.

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