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)

New York state wind developments

According to recent reports:

Local New York state wind power updates

According to recent press reports:

The Town of Enfield has scheduled a public hearing for November 6 to discuss a proposed wind law that reduces setbacks. Ithaca Journal (10/21)

The Town of Farmersville (Cattaraugus County) enacted a moratorium on wind development while it changes a 2007 law on wind energy systems zoning. Buffalo News (10/24)

In the hamlet of Harborfields (Suffolk County), school officials are considering siting a wind turbine to reduce energy costs. Times Beacon Record (10/23)

NYRI officials say the proposed major transmission line would reduce energy costs to Oneida County and statewide. Opponents disagree. Observer Dispatch (10/22). See also Newsday (10/20)

Clean energy employment is booming. Albany Times Union (10/23)

Local company receives $1M grant from NYSERDA to produce rooftop vertical axis turbines.  Poughkeepsie Journal (10/16)

At the annual conference of ACE-NY NYISO’s chairman Stephen Whitley discussed transmission bottlenecks and other impediments to bringing more renewables on to the state’s grid. Albany Business Review (10/24)

FERC conditionally grants incentives for proposed New York transmission line

As WPL Blog readers will know, a 190-mile high capacity transmission line from upstate to down, known as the New York Regional Interconnection, or NYRI, has been proposed and is under review in multiple municipalities and at the New York Public Service Commission (PSC).

A recent decision by the Federal Energy Regulatory Commission (FERC) would help the NYRI by conditionally approving incentive rates. The decision is conditioned on the PSC finding that the project will ensure reliability or reduce congestion, and granting siting approval. NYRI has argued that the transmission line will increase the economic benefits of renewable resources that would otherwise be confined upstate.

From a FERC press release:

The Federal Energy Regulatory Commission (FERC) today approved incentive rates for the New York Regional Interconnect (NYRI) on condition that the New York State Public Service Commission determines the 190-mile transmission line either ensures reliability or reduces congestion, and approves siting for the project.

FERC recognizes the need for and promotes greater investment in energy infrastructure to strengthen and improve reliability of the transmission grid,” FERC Chairman Joseph T. Kelliher said. “We will only approve incentive rate proposals that satisfy the requirements of the Federal Power Act and our regulations.”

Today’s action involves rates for the project. NYRI has not made any requests of FERC for federal siting approval. “That issue properly lies before the New York State Commission, and our approval today rests on the New York State Commission’s approval of the proposed project,” Kelliher said.

FERC’s conditional rate approval includes a 275 basis point, or 2.75 percent, addition to the return on equity (ROE) that will be earned by the company. That incentive includes: 50 basis points for future participation in the New York Independent System Operator, Inc. (NYISO); 100 basis points for forming an independent transmission company (transco); and 125 basis points for a combined transmission and advanced technology incentive…

The full FERC NYRI press release is here. The 22-page FERC order of September 18  in Docket No. EL08-39-000 is here.

In a written statement, FERC Commissioner Moeller added:

I would like to highlight our action today in response to the New York Regional Interconnect’s petition seeking incentive-rate treatment for a proposed high-voltage transmission line. At an estimated cost of approximately $2 billion, the project is substantial in magnitude as it involves constructing a 190-mile DC line that will traverse dozens of municipalities across upstate New York. Moreover, the significant regulatory risk that the line will encounter, as well as the risk associated with siting the line on private lands are factors that were considered before reaching the decision to support the conditional approval of incentive rate treatment for this project.

And while the Commission has not been unanimous in its support for incentives in recent cases involving transmission projects, I should recognize that this order gained the support of all the voting commissioners. Again, I stress that NYRI’s proposal is both ambitious and fraught with risks, and in light of the circumstances presented in its application I believe that the particular incentives that we’re conditionally approving will achieve the purposes of FPA section 219.

As I’ve stated previously, our country needs to play some serious catch-up in building the transmission infrastructure that is needed to deliver reliable and reasonably-priced power to market. Providing incentives to utilities, as authorized by Congress, has proven to be an effective way to encourage utilities to invest their dollars in new transmission infrastructure. Perhaps, so much so that we’ve seen an increase in the number of public utilities seeking incentive rate treatment. And while I will continue to judge the merits of each request on a case-by-case basis, consistent with the statute and our policies, I’d ike to emphasize my belief that the Commission’s ability to provide incentives has spurred needed [i]nvestment in transmission.

Response to the decision, including opposition by both of New York’s U.S. senators, may be found in this article by the Utica Observer-Dispatch (9/18).

New York Regional Interconnect (NYRI) PSC application commences

The New York Public Service Commission has informed New York Regional Interconnect, Inc. (NYRI)  that its application to construct a 190-mile high voltage tranmission line from upstate (Marcy) to downstate (New Windsor) is complete.

The proceeding is on the fast track as if no decision is forthcoming within a year of the August 8, 2008 filing of the complete application, the Federal Energy Regulatory Commission (FERC) may step in and preempt the PSC. The PSC will hold public fora on the proposal in different locations throughout the state.

Opposition to the transmission line is gearing up for a fight, as reported in the Daily Star.

Background on NYRI may be found here.

PSC documents are here.

New York wind projects

Iberdrola-Energy East

Buffalo News reports June 29 on the likelihood of the proposed Iberdrola-Energy East transaction gaining New York Public Service Commission (PSC) approval (with a vote due potentially July 16, though August appears to be more likely). Notable quote from Iberdrola’s Pedro Azagra:

We believe in predictable and consistent regulation. If those things are not there, there are many other states and countries where it is. If you’re in a state where regulation is not predictable, we’re out of there.

Separately, a variety of outlets (Newsday, Albany Times Union, Ithaca Journal, Business Review) reported that staff of the NY PSC appear to be lessening their demands of Iberdrola to consummate the Energy East acquisition. Willing to permit some ownership of wind generation assets, staff is now insisting that Iberdrola be compelled to make good on its $2 billion investment promise, with penalties for failure to invest the money in New York. The staff in its filing stated

Nonetheless, in the event that the Commission decides approval of the transaction is warranted upon less than tangible monetary benefits in the amount of Staff’s $644 million, or that Iberdrola may own wind generation facilities if vertical market power impacts are mitigated, Staff presents alternatives to the positions it took earlier in this proceeding.

The $2.0 billion investment Iberdrola proposes, and the amount of tangible monetary benefits it must provide ratepayers, can be linked. If Iberdrola commits to the development of wind projects in New York the investments it promises, the amount of the monetary benefits due ratepayers could be reduced. If Iberdrola fails to keep it wind investment promises, however, substantial monetary benefits, in the form of rate reductions, should accrue to NYSEG and RG&E ratepayers.

The Times Union reported that Iberdrola discounted the new staff proposal:

“The PSC staff has not changed its position at all,” said an Iberdrola spokesman. “They make it clear, they still prefer prohibition.” He said Iberdrola believes the alternatives “do not make sense.”

The PSC staff’s latest filing in the Iberdrola-Energy East case may be found on the NY PSC website.

Cape Vincent wind

Watertown Daily Times reports that a group opposed to industrial wind development in the Town of Cape Vincent (Jefferson County) has appealed an appeal judge’s decision to not allow certain documents in the group’s March 2007 Article 78 challenge against the town’s Zoning Board of Appeals (ZBA). The challenge seeks to undo the ZBA’s determination that an industrial wind farm is a public utility under New York law. Such a ruling is advantageous to wind developers as public utilities can be subject to reduced requirements under local zoning laws. The anti-wind group has appealed a lower court’s ruling against it.

First Wind in Prattsburgh

WETMTV online reports on the unsuccessful attempts of landowners to use the courts to prevent First Wind from laying necessary transmission lines for its Prattsburgh project.

NYRI transmission project

The Utica Observer-Dispatch published June 29 a point-counterpoint relating to the proposed New York Regional Interneconnect (NYRI), a 190-mile, 1200 megawatt electrical transmission line from upstate (Marcy) to downstate (New Windsor).

Reunion Power in Richmondville

The Daily Gazette of Schenectady reported July 1 that the Zoning Board of Appeals of Richmondville has decided not to decide yet on whether to grant a one-year extension of Reunion Power’s permit to site a meteorological tower in the town. The company has reportedly sited another met tower just a few miles away.

Spafford Wind Turbine Law

CNYLINK reports that the Town of Spafford in New York’s Finger Lakes region is considering a wind turbine law.

Links in this entry

Digg this article

Transmission and storage

Two core issues that make relying on wind energy a challenge are transmission and storage. Wind generation is inherently variable. Some days are windy, but not every day. Wind can blow more strongly at night, when demand for electricity is relatively low. Wind generation facilities are often on the fringes of the electric grid. The recent Department of Energy report endorsing the notion that wind could provide 20% of the country’s electric generation by 2030 cites transmission as a chief, if not the chief, impediment. Getting wind energy from the source to electric outlets, when demand is high, can vex the most ardent supporters of wind.

Two recent press reports offer some insight into where we are now.

NYRI transmission project

First is an opinion piece in UticaOD.com offered by the president of the New York Regional Interconnect, Inc. or NYRI.  In May 2006, the NYRI proposed a project to the New York Public Service Commission (NYPSC) to construct and maintain a 190-mile, 1200 megawatt electrical transmission line from upstate (Marcy) to downstate (New Windsor). Information on PSC Case No. 06-T-0650 may be found here.

Without commenting on the merits of this proposal, it is nevertheless reasonably accepted that New York’s electricity infrastucture is aging and potentially in danger of not being able to keep up with projected demand over the long term, especially assuming that demand continues to increase as expected. Downstate, home to the state’s population centers, drives demand. As renewables such as wind (largely produced upstate) are expected to contribute increasingly to the generation mix, it is reasonable to ask “how are we going to make this happen?” The PSC, at least initially, will determine whether the NYRI will be a part of the answer.

Wind energy storage

Another potential partial solution may be storage. The ability to store energy generated during times of low need to be used during high demand periods is of course desirable, if not essential. Renewable Energy World has an interesting summary update on the status of industrial scale storage. As the article indicates:

The benefits of storage are significant, especially in integrating distributed generation. Storage protects against mistakes in forecasting, removes barriers in connecting renewable sources to a variety of grids, shifts demand peaks by storing off-peak energy to sell back to the grid during peak times, provides frequency regulation and deters expensive grid upgrades.

The article references a meeting of the Electricity Storage Association. Learn everything you’d like to about the Electricity Storage Association here.