New Corridors and New Planning Rules Aim to Expedite Permitting

by Lisa Belenky

In May, Federal Energy Regulatory Commission (FERC) issued an expansive new rule on Long Term Regional Transmission Planning that will take effect in July, 2024.1 The rule was passed 2-1 with Commissioner Christie issuing a fiery dissent.2

There is some good news: the new rule lays out a set of new requirements for long-term transmission planning which is to be done on a regional basis with at least a 20-year horizon and which requires reassessment and revision every 5-years.

c. Pic powerline

The rule appears to require transmission planners to incorporate state decarbonization objectives into transmission planning by requiring at least three alternative long-term planning scenarios to meet demand that take into account:

(1) federal, state, local, and federally-recognized Tribal laws and regulations affecting the resource mix and demand;

(2) federal, state, local, federally-recognized Tribal laws and regulations on decarbonization and electrification;

(3) state-approved integrated resource plans and expected supply obligations for load-serving entities;

(4) trends in fuel costs and in the cost, performance, and availability of electric  generation and storage resources, as well as electrification technologies for buildings and transportation;

(5) resource retirements;

(6) generator interconnection requests and withdrawals; and

(7) utility and corporate commitments along with federal, state, local, and federally-recognized Tribal policy goals that affect long-term transmission Needs.

The rule also requires assessment of seven potential benefits of new transmission:

(1) Avoided or deferred reliability transmission facilities and aging transmission infrastructure replacement (meaning that by planning upgrades, reliability is improved and the costs of loss of reliability are avoided);

(2) Reduced loss of load probability or reduced planning reserve margin (meaning the benefit is less probability of loss of load or the need for additional reserves to be planned);

(3) Production cost savings;

(4) Reduced transmission energy losses;

(5) Reduced congestion due to transmission outages;

6) Mitigation of the consequences of extreme weather events and unexpected system conditions; and

(7) Capacity cost benefits from energy losses incurred at peak loads.

In addition, the rule marginally increases the level of transparency and stakeholder engagement in transmission planning, requiring stakeholder meetings and advance notice for decisions that previously were entirely opaque.

The rule also maintains the limited geographical areas in which incumbent utilities can build projects without competition (called the Right of First Refusal, or ROFR). If the areas had been expanded to interstate transmission projects, as initially proposed, the expanded areas where competition was curtailed would only benefit utility profits and would harm consumers.

The rule requires planners to consider whether transmission needs can be met by making existing transmission lines more efficient, such as dynamic line ratings, advance power controls, and transmission switching (examples of Grid Enhancing Technologies (GETS)). This is a step forward.3 The Rule also requires that the planning identify opportunities to increase the capability of existing transmission and infrastructure, called “right-sizing,” which can reduce the need for new transmission in some cases.

Unfortunately, FERC did not require that the transmission process expressly incorporate environmental justice and equity considerations or that the planning determine specific geographic areas where transmission should be sited (see discussion below about new DOE corridors proposals).

The rule requires that the developers allocate costs so that those benefitting from the new transmission pay for the lines and offers developers a choice of methods to achieve this. This last requirement, along with the requirement that planning consider decarbonization goals, is quite controversial as the impetus for much of the new transmission is for purposes of connecting more renewable energy to the grid and increasing climate resilience, and the new lines may benefit consumers in many states where those are not popular goals. As Commissioner Christie’s dissent put it at pp. 4-5: “the final rule inflicts staggering costs on consumers by promoting the construction of trillions of dollars of transmission projects, not to serve consumers in accordance with the Federal Power Act (FPA), but to serve a major policy agenda never passed by Congress, to serve the profit-making interests of developers of politically preferred generation, primarily wind and solar, and to serve corporate “green energy” preferential purchasing policies.” In early June many requests were filed with FERC seeking a rehearing of the Order and it will not be surprising if this rule is eventually challenged in court.

DOE National Interest Electricity Transmission Corridors

Separately, after completing a Transmission Needs Study, the Department of Energy (DOE) recently issued a preliminary list4 of ten proposed National Interest Electricity Transmission Corridors (NIETCs). The public comment period on this proposal closed June 24, and the DOE currently plans to develop a final list and provide NEPA review in fall 2024.

While none of the preliminary corridors are in California, Desert Report readers may want to look at: the proposed Mountain - Northwest corridor which runs from eastern Oregon through western Nevada and “is co-located with existing Bureau of Land Management (BLM) Section 368 energy corridors through most of Nevada and follow existing infrastructure for most of its length;” the proposed Plains-Southwest “geographic area” that includes a large swath of eastern New Mexico and runs north through Texas and Oklahoma to Kansas; and the proposed Mountain-Plains-Southwest geographic area that encompasses part of southeastern Colorado and eastern New Mexico.

The details of these new preliminary corridor proposals may look like a lot of spaghetti on the wall at this point, but eventually these processes may expedite the approval of a lot of new transmission nationwide.

c. Potential NIETC Geographic Areas

The details of these new preliminary corridor proposals may look like a lot of spaghetti on the wall at this point, but eventually these processes may expedite the approval of a lot of new transmission nationwide.

The NIETC designation will make projects within them eligible for additional DOE financing.5 Perhaps even more importantly, the Federal Power Act will permit FERC to permit projects in these NIETC corridors if state siting authorities do not have authority to act, if they delay action on an application for over one year, if they add conditions on an approval that make it economically “infeasible” or impair its ability to significantly reduce congestion on lines; or if they deny an application. See FERC Order No. 1977,187 FERC ¶ 61,069 (May 13, 2024). This allows FERC to step in and make these decisions, instead of the States, and is not universally supported. While some environmental groups might see it as a necessary step to move transmission forward faster to support the renewable energy transition, others are concerned that FERC will override important State and regional environmental protections that should be considered before new transmission lines are approved even within designated corridors.

DOE CX for transmission in corridors

On April 30, 2024, the Department of Energy (DOE) issued a set of new categorical exclusions that streamline NEPA review for certain projects including some energy storage systems, upgrading and rebuilding existing powerlines, and for approval of certain solar photovoltaic systems.6 Overall, the changes are likely to speed up review and approval of projects that may have limited impacts on the environment, but as always, the “devil” is in the details of how these exclusions are applied to each situation along with important limits on the use of all categorical exclusions such as where there are extraordinary circumstances that require more detailed NEPA review.7

On a positive note, DOE did make a small but substantive change to the proposed categorical exclusions for solar PV projects within “previously disturbed or developed areas.”8 Such projects must be in accordance with applicable requirements (such as land use and zoning requirements) in the proposed project area, and also must be “consistent with applicable plans for the management of wildlife and habitat, including plans to maintain habitat connectivity.”9

While there are some ongoing concerns with the definition DOE relies on for “previously disturbed or developed area” that will necessitate watching closely as this categorical exclusion is relied on in the future, particularly within designated transmission corridors, the additional wildlife and connectivity language is helpful to limit its application where projects could impact species and habitats or block key movement corridors.

Conclusion:

The new rule on Long Term Regional Transmission Planning is complicated and potentially far reaching. Developers and environmental groups may see both benefits and obstacles among its provisions, and given the controversy, it is uncertain when the rule will be implemented. Similarly, the designation of new DOE NIETC corridors and FERC’s ability to override States in permitting within those corridors may speed up the pace of renewable energy development across the country by providing more available transmission. In both cases it will be imperative for concerned citizens to watchdog the implementation of these efforts to ensure that unintended negative consequences don’t outweigh the promised benefits.

References for this article are available on the website <www.desertreport.org>. On the home page go to the right sidebar and click on All Posts.” Then scroll down to the article that you wish to see, and the references will be at the end.

 Lisa T. Belenky is a senior counsel at the Center for Biological Diversity, working out of the Oakland California office. Her work focuses on the protection of rare and endangered species and their habitats under state and federal law on public and private lands. Ms. Belenky also spends much of her time on legal and policy issues related to siting large-scale renewable energy projects on public and private lands.

(1) See Order No. 1920 (Docket No. RM21-17-000; 187 FERC ¶ 61,068 (May 13, 2024)), available at https://ferc.gov/media/e1-rm21-17-000

(2) (See id. at PDF 1286).

(3) Unfortunately, the rule does not expressly require transmission planners to consider whether energy needs can be met by relying on many of the transmission alternatives could meet the needs identified. These could include Non-Wires Alternatives (NWAs) – like rooftop and community solar, storage and microgrids (Distributed Energy Resources (DERs)), demand response, and energy efficiency.

(4) https://www.energy.gov/sites/default/files/2024-05/PreliminaryListPotentialNIETCsPublicRelease.pdf

(5) https://www.energy.gov/gdo/transmission-facility-financing-program

6) https://www.energy.gov/nepa/articles/notice-final-rulemaking-2024

(7) See 10 C.F.R. § 1021.410 for list of extraordinary circumstances DOE considers and other criteria for utilizing a categorical exclusion.

(8) 10 C.F.R. § 1021.410, Appendix B5.16.

(9) Id. It is also worth noting that the “integral elements” that are also covered by this categorical exclusion include a broad range of “elements” such as water supply wells and small water treatment plants—as a result this categorical exclusion can cover quite a broad range of activities associated with these PV solar projects that may themselves have significant impacts in some areas. 10 C.F.R. Part 1021 Appendix B to Subpart D. B1.1-B1.36,