FERC Expands Transmission Siting Authority in National Interest Corridors | Davis Wright Tremaine (2024)

On May 13, 2024, the Federal Energy Regulatory Commission ("FERC") issued a final rule expanding its siting authority over the construction and modification of electric transmission facilities within National Interest Electric Transmission Corridors ("National Corridors"). Order No. 1977[1] amends FERC's existing regulations governing applications for permits to site electric transmission facilities and the exercise of federal eminent domain authority to implement the Infrastructure Investment and Jobs Act of 2021's ("IIJA's")[2] amendments to the Federal Power Act ("FPA") Section 216.[3]

The IIJA expanded FERC's backstop siting authority to include circ*mstances where a state commission: (i) has not made a determination on an application by one year after the later of the date on which the application was filed or the date on which the relevant National Corridor was designated; (ii) has conditioned its approval such that the proposed project will not significantly reduce transmission capacity constraints or congestion in interstate commerce or is not economically feasible; or (iii) has denied an application.[4]

The Order also adds new requirements regarding stakeholder engagement, tribal engagement efforts, public engagement plans, consideration of environmental considerations, and environmental resource reports. In conjunction with the Department of Energy's issuance on May 8, 2024, of a preliminary list of 10 proposed National Corridors across the U.S.,[5] the Order sets the stage for an increased role for FERC in the siting of needed upgrades to the nation's electric transmission grid.

Preconditions to Eminent Domain Authority – Stakeholder Engagement

The Order requires a determination by FERC as to whether the applicant has made good-faith efforts to engage with landowners and other stakeholders as a precondition to receiving federal eminent domain authority in a National Corridor designated by the Department of Energy. The Order establishes an Applicant Code of Conduct that includes recordkeeping and information-sharing requirements for engagement between an applicant and affected landowners and establishes general prohibitions against misconduct in such engagement.[6] Specifically, the Applicant Code of Conduct requires applicants to:

(1) present photo identification and provide the applicant's contact information during discussions with affected landowners;

(2) explain to affected landowners that they may request copies of discussion log entries that pertain to their property; and

(3) provide affected landowners with copies of their discussion log entries upon request.[7]

Furthermore, if an applicant chooses not to follow the Applicant Code of Conduct, the applicant must specify an alternative method of demonstrating that the applicant has made good-faith efforts to engage with landowners and other stakeholders and explain why the alternative method is equal to or better than compliance with the Applicant Code of Conduct.[8] The Order also requires applicants to provide affected landowners with a copy of FERC's Landowner Bill of Rights, which notifies landowners affected by a proposed transmission project of their right to intervene in relevant FERC proceedings.[9]

Environmental Justice Public Engagement Planand Tribal Engagement Plan

The Order requires that an applicant's website include an interactive mapping component along with an Environmental Justice Public Engagement Plan and Tribal Engagement as components of the Project Participation Plan[10] to demonstrate meaningful engagement early in the pre-filing process with potentially affected environmental justice communities and Indian Tribes.[11] FERC explained that the Environmental Justice Public Engagement Plan and Tribal Engagement Plan must:

(1) describe the applicant's completed outreach to environmental justice communities and/or Indian Tribes;

(2) summarize comments from potentially impacted environmental justice communities and/or Indian Tribes;

(3) describe planned outreach; and

(4)describe how the applicant will reach out to environmental justice communities and/or Indian Tribes about potential mitigation.[12]

Environmental Resource Reports

The Order also updates and clarifies the information required for existing environmental reports such as its Alternatives Resource Report[13] and adopts three new resource reports: the Tribal Resources Report, the Environmental Justice Report, and the Air Quality and Environmental Noise Report.[14]

Impacts and Next Steps

The Order impacts how public utilities are permitted to apply for FERC backstop siting authority and the potential exercise of federal eminent domain for the construction and modification of electric transmission facilities within National Corridors. FERC declined to adopt the proposal to eliminate the existing policy of a one-year delay between the filing of the relevant state siting applications and the commencement of FERC's prefiling process, which would have allowed simultaneous processing of siting applications.[15] In doing so, FERC concluded that requiring these two processes to run sequentially strikes the appropriate balance between an efficient process and respect for state primacy in siting electric transmission infrastructure.

The new stakeholder/EJ/tribal engagement requirements could accelerate the siting process by identifying and resolving issues early in the process, or it could slow the process by providing a whole new set of procedural hurdles and bases for litigation. Only time will tell.

The amended regulations will take effect on July 29, 2024.[16] There is no general utility compliance filing required by the Order. Requests for rehearing of the Order are due by June 12, 2024.