U.S. Appeals Court reins in FERC on transmission siting

In a case consolidated from four actions initiated in the Second, D.C. and Fourth Circuits, a three-judge panel of the U.S. Court of Appeals for the Fourth Circuit issued a ruling that scales back the asserted authority of the Federal Energy Regulatory Commission (FERC) to issue permits for the construction or modification of electric transmission facilities in areas designated as “national interest corridors”.

Under Section 216 of the Federal Power Act (FPA), as modified by the 2005 Energy Policy Act, FERC has permitting jurisdiction when a state commission has “withheld approval [of a permit application] for more than 1 year.” FERC passed a regulation implementing section 216 of the FPA whereby it asserted permitting jurisdiction  where state regulators deny permits within a year of receiving an application. That rule was challenged as too broad.

The decision boiled down to one’s (well really to three federal judges’) view of the meaning of the word “withheld”. In a decision sure to please the good people at the oft-cited Merriam Webster’s, two of three judges believed that “withheld approval for more than 1 year” could not possibly be considered to mean “denied within one year”. The dissenting judge believed just as forcefully that such an interpretation was possible. But he lost.

(Federal environmental issues discussed and decided in the case are left for other observers.)

The case has acute relevance in New York, as the New York Regional Interconnect (NYRI), a proposed 190-mile upstate-to-down transmission line in a “national interest corridor”, is currently under review at the New York Public Service Commission (PSC). If the PSC fails to approve (and does not deny) the application by August 7, 2009 (mark your calendars!), the FERC can assert its permitting jurisdiction. Under the appeals court decision, if the PSC denies the application within one year of submission  for legitimate reasons, the denial ostensibly stands, and will not be subject to FERC’s claiming jurisdiction because of the denial.

This Albany-located blogger does not know whether FERC will appeal to the Supreme Court. Considering the Obama Administration’s apparent emphasis on renewable energy, and the absolute necessity of bolstering the nation’s electricity grids if renewables are to be added in substantial measure to the power mix, an appeal seems possible. Or, if Congress’ intent was actually to give FERC this wide latitude (or better, if the current Congress’ intent is to do that), a change to the underlying federal legislation seems possible as well.

The February 18, 2009 decision of the U.S. Court of Appeals for the Fourth Circuit consolidates the following cases: Piedmont Environmental Council v. FERC (No. 07-1651), Public Service Commission of New York v. FERC (No. 07-1864), Minnesota Public Utilities Commission v. FERC, (No. 07-1865), and Communities Against Regional Interconnect v. FERC (No. 07-1866)

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