Explainer on the Notice of Proposed Rulemaking regarding Applications for Permits to Site Interstate Electric Transmission Facilities (12/15/22)

On December 15, 2022, the Federal Energy Regulatory Commission (FERC or Commission) issued a Notice of Proposed Rulemaking (NOPR) to amend its existing regulations[i] for permits to site interstate electric transmission facilities.[ii]  The NOPR revises existing regulations governing applications for permits to site electric transmission facilities under section 216 of the Federal Power Act (FPA), as amended by the Infrastructure Investment and Jobs Act of 2021 (Infrastructure Act).[iii]

The authority to issue permits for the siting of transmission facilities has traditionally resided with the States.  The Energy Policy Act of 2005 established a limited federal role for the siting of transmission facilities by adding section 216 to the FPA,[iv] authorizing the Commission, under certain circumstances, to issue permits to construct transmission facilities. The specific circumstances in which the Commission may use its transmission siting authority include but are not limited to:

1. Designation by the Department of Energy. The Commission’s siting authority only applies in areas that are designated by the Department of Energy (DOE) as National Interest Electric Transmission Corridors (National Corridors), which are areas that DOE has determined have a need for new or modified transmission facilities to resolve congestion and constraints on power flows; and
2. State inaction or denial of an application.   If the state denies or fails to approve an application for siting transmission facilities within one year, the Commission may consider issuing a permit for the transmission facilities as described in the same application. For this reason, the Commission’s jurisdiction over the siting of transmission facilities is sometimes referred to as “backstop” authority.

After passage of the Energy Policy Act of 2005, the Commission issued regulations for the filing of applications for permits to site interstate electric transmission facilities (2006 regulations). By 2011, however, federal appellate court decisions had diminished the Commission’s transmission siting authority and impeded DOE’s efforts to designate National Corridors under FPA Section 216. Since these court decisions were issued, the Commission has not received any applications for permits to site electric transmission facilities. 

The passage of the Infrastructure Act amended FPA section 216 by directly addressing issues raised by the court decisions.  As amended, FPA section 216 gives broader authority to DOE to designate National Corridors and clarifies certain issues pertaining to the Commission’s jurisdiction. Under the amended section 216, the Commission has jurisdiction to issue permits for transmission facilities in areas on the interstate transmission grid that DOE has determined are experiencing electric energy transmission capacity constraints or congestion that adversely affects consumers or are expected to experience such transmission capacity constraints or congestion.  The Commission can issue a permit for a project in a National Corridor if: (1) a state does not have the authority to approve the siting of the facilities or consider the interstate or interregional benefits; (2) the applicant is a transmitting utility that does not qualify to apply in a state because the applicant does not serve end-use customers in the state; or (3) a state that has authority has not made a determination on an application within a statutory timeframe, has conditioned its approval such that the proposed project will not significantly reduce capacity constraints or is not economically feasible, or has denied an application. 

Additionally, the Infrastructure Act requires changes to the Commission’s existing 2006 regulations. The NOPR issued by the Commission on December 15, 2022, proposes revisions to the Commission’s regulations to ensure conformity with the Infrastructure Act and to modernize certain regulatory requirements.

---

Q. What is a Notice of Proposed Rulemaking or “NOPR”? What are the current public comment deadlines for the NOPR?

A. To be clear, these are proposed rules being announced by FERC, not a final rule. A NOPR is a document issued by FERC describing proposed changes to its current regulations that are under consideration, along with detailed explanations of the reasons for proposed reforms.

Interested persons and organizations now have the opportunity to comment on FERC’s proposal. Comments on the NOPR are due by May 17, 2023.[v] OPP has highlighted below some of the areas where FERC is explicitly seeking comments for guidance, but comments may address any aspect of the NOPR.

You can access the NOPR, the comments of other parties when filed, issuances by FERC, and other documents using FERC’s eLibrary records information system. For this NOPR, the relevant docket number is RM22-7-000. OPP can also help you find documents in eLibrary.

Please contact OPP at opp@ferc.gov or (202)502-6595 for assistance with filing comments, to find relevant information, or to ask questions.

---

Q. What is transmission? What are interstate electric transmission facilities?

A. For electricity to get from power plants to users, it needs to travel through wires. “Transmission” and “distribution” refer to the different stages of carrying electricity through wires from power plants to a home or a business.  Transmission is the “interstate highway” of electricity delivery and moves electricity over long distances, often on tall towers, so that it reaches areas of demand like cities and towns. In contrast, moving electricity around a city and town on familiar neighborhood utility poles (or sometimes through underground conduits) is referred to as the distribution of electricity. Below is a depiction of the difference between transmission and distribution.[vi] 

Collectively, transmission and distribution lines make up the system that is commonly called “the grid.” Transmission and distribution are two separate stages or systems on the grid. For purposes of this explainer, references to the grid will focus on transmission. 

The term “Interstate electric transmission facilities” refers to the wires, poles, and associated equipment used for interstate electric transmission.  Because the interconnected grid covers most of the country, most electric transmission is considered “interstate,” with exceptions for Alaska, Hawaii, Texas (which operates its own grid in much of the State) and U.S. territories like Puerto Rico. 

For more background information about transmission, please see the prior OPP Explainer on the NOPR issued in FERC Docket RM21-17-000.[vii]

Q. What is FERC’s role and authority in regulating interstate transmission facilities?

A. In most parts of the United States, FERC is responsible under the FPA for ensuring that the rates, terms, and conditions that apply to the transmission of electricity in interstate commerce are just, reasonable, and not unduly discriminatory or preferential.[viii] Although FERC has significant authority over the rates, terms, and conditions of utility transmission service, Congress did not give FERC primary jurisdiction over the siting of transmission facilities, leaving that to the States in most circumstances.

However, since 2005, under Section 216 of the FPA, FERC has had some authority to site electric transmission facilities in areas designated by the DOE as National Corridors. As described previously, under the 2021 Infrastructure Act, National Corridors are those areas determined by DOE to have or expected to have transmission constraints or congestion in power flows to warrant the designation. Existing regulations at 18 CFR Parts 50 and 380 govern FERC’s review of applications to site interstate electric transmission facilities in National Corridors pursuant to FPA Section 216.

---

Q.  You keep referring to National Corridors (full name “National Interest Electric Transmission Corridors”).  Do such National Corridors currently exist?  If so, where are they, and how are they determined? 

A. FPA Section 216(a) directs DOE to study and report on congestion and constraints on the grid and to designate National Corridors that warrant the development of additional transmission infrastructure to alleviate these conditions.  FERC is then authorized by FPA Section 216(b), in certain circumstances, to issue permits for the construction or modification of electric transmission facilities in such National Corridors. 

There are no active designations of National Corridors at present. DOE had designated some corridors under the prior version of FPA Section 216, but such designations were successfully challenged in court and vacated. The Infrastructure Act amendments to FPA section 216 expanded DOE’s authority to establish National Corridors to include geographic areas that are expected to experience such constraints or congestion, in addition to those areas currently experiencing those conditions. FERC’s siting responsibilities rest on the designation of National Corridors.

---

Q. How does the timing of a State application for the siting of a transmission facility relate to the timing of actions at FERC?

A. The Commission’s regulations, at 18 CFR § 50.5, require applicants to engage in a pre-filing process prior to the formal filing of an application. The goal of the pre-filing process is to ensure that the applicant is on the right track in fulfilling application requirements prior to formally filing its application with the Commission. Under the NOPR, the pre-filing process would remain mandatory.

During pre-filing, the applicant must take several actions. These include meeting with and providing information to the Commission, filing a Project Participation Plan to ensure that information about the project is available to stakeholders and the public, and ensuring that affected landowners receive proper notice about the proposed transmission facility. 

As a matter of policy, the Commission previously announced that it would not allow the pre-filing process to begin until one year after the relevant state siting applications have been filed. In the NOPR, the Commission states that it is now reconsidering that policy. The Commission is proposing to eliminate the one-year delay, such that the Commission’s pre-filing process may commence at any time after the relevant state applications have been filed.  The Commission is also seeking comment on the advantages or disadvantages of the Commission entertaining requests to commence the pre-filing process even before a state siting application has been filed.

---

Q. Is FERC proposing to add protections for landowners and other stakeholders?

A. Yes, bolstered by the Infrastructure Act amendments to Section 216 of the FPA, FERC is proposing to add key protections for landowners, communities, and other stakeholders.

Although the applicant will likely prefer to negotiate with landowners for easements – the legal right to use property for installation of infrastructure, in this case transmission poles, lines, or facilities, in exchange for compensation – in some cases the landowner and the applicant are not able to reach an agreement. In those situations, an applicant might need to go to court to obtain the right to use the landowner’s property by eminent domain, in exchange for just compensation as determined by the court. However, the applicant cannot go to court unless it by law has eminent domain authority. The Infrastructure Act amendments require the Commission to determine that the applicant made good faith efforts to engage with landowners and other stakeholders early in the applicable permitting process in order for the applicant to be granted eminent domain authority upon receipt of siting approval from FERC. Thus, applicants that seek siting under FPA Section 216 will have a significant and often crucial motivation to engage early and in good faith with landowners and other stakeholders.

In addition to existing rights and responsibilities of the applicant, FERC is proposing a new 18 CFR § 50.12 of the regulations that would consist of a voluntary Applicant Code of Conduct. The NOPR explains that, if the applicant elects to rely on the Applicant Code of Conduct, the Commission will assess “good faith efforts” by evaluating whether the applicant substantially complied with the Applicant Code of Conduct in its engagement with landowners and other stakeholders.  The Applicant Code of Conduct includes particular recordkeeping and information-sharing requirements for engagement with affected landowners, as well as more general prohibitions against certain types of misconduct in such engagement. 

For example, an applicant that chooses to comply with the Applicant Code of Conduct set forth in proposed § 50.12(a) must: 

• retain an affected landowner contact log;
• provide affected landowners with certain information about the project and the Commission;
• ensure communications with affected landowners are factually correct, devoid of misrepresentation, and respectful;
• obtain affected landowner permission to enter property and leave when asked; and,
• if applicable, provide an affected landowner with a copy of any appraisal prepared by, or on behalf of, the applicant for that landowner’s property.   

Applicants that choose to comply with the Applicant Code of Conduct must file monthly status reports. These status reports would also provide applicants the opportunity to cure any instances of non-compliance by disclosure in such reports and explanation of remedial actions taken. An applicant that chooses not to comply with the Applicant Code of Conduct must specify an alternative method of demonstrating its meets section 216’s good faith efforts standard.

FERC is also proposing to require that applicants provide affected landowners with a new Landowner Bill of Rights, a copy of which is included in the Appendix in the new regulations (and is also included as an Appendix to this document). The Landowner Bill of Rights is intended to give landowners impacted by a transmission project key upfront information about their rights to access information about the project, rights to participate in the FERC proceeding, rights in communicating and negotiating with the applicant, and rights as to the potential for eminent domain, among others. 

FERC noted that it is seeking comments on the contents of the Landowner Bill of Rights. 

---

Q. Who does FERC consider to be an “affected landowner” as to a proposed transmission facility?

A. “Affected landowners” include those who own property along the path of a proposed project, or property abutting that path, or with a residence within 50 feet of the work area.  More specifically, the Commission’s regulations define “affected landowners” as owners of property interests whose property: 

1. is directly affected (i.e., crossed or used) by the proposed activity including all facility sites, rights-of-way, access roads, staging areas, and temporary workspace; or
2. abuts either side of an existing right-of-way or facility site owned by any utility company, or abuts the edge of a proposed facility site or right-of-way which runs along a property line in the area in which the facilities would be constructed, or contains a residence within 50 feet of a proposed construction work area.[ix] 

In the NOPR, FERC is seeking comment on whether “affected landowners” should include those located within a certain geographic distance from the proposed project facilities, given the potential impacts on visual (or other) resources from these transmission facilities that are often on tall poles.

---

Q. How is the Applicant required to notify and communicate with the community about a transmission project proposal?

A. Existing Commission regulations require the applicant to develop a Project Participation Plan early in the pre-filing process. This Plan requires the applicant to:

1. identify specific tools and actions to facilitate stakeholder communications and public information;
2. list locations throughout the project area where the applicant will provide copies of all project filings; and
3. explain how the applicant intends to respond to requests for information from the public and other entities. 

The applicant is also required to distribute, by mail and newspaper publication, project participation notices to affected landowners and other stakeholders.  The project participation notices sent to affected landowners must include a general description of the property the applicant would need from the affected landowner and a brief summary of what rights an affected landowner has at the Commission and in State eminent domain proceedings.

In terms of the breadth of distribution of project participation notices sent by the applicant, current regulations require notice by mail to all affected landowners as well as landowners with a residence within a quarter mile from the edge of the construction right-of-way for the proposed project, along with published newspaper notice.  The Commission is proposing to revise the notice requirement (18 CFR § 50.4(c)(1)) for clarity and to ensure that applicants provide notice of the proposed project to all interested individuals and organizations. 

The Commission is also interested in understanding the scope of residents and communities that should receive notice of the project. Although the NOPR did not propose to change the quarter mile standard in terms of the residential landowners that should receive a notice, the Commission seeks comments on whether the quarter-mile standard is sufficient and, if not, what geographic distance should be used. The Commission also seeks comment on what methods of notice, beyond mail and newspaper publication, might be utilized in order to effectively reach the largest number of stakeholders as possible.

---

Q. Are there specific proposals for engagement with Environmental Justice communities?

A. Yes. The NOPR proposes to add a definition for the term “environmental justice community” to assist applicant compliance with the proposed requirement that an applicant develop and file an Environmental Justice Public Engagement Plan. Specifically, the Commission proposes to define the term “environmental justice community” as any disadvantaged community that has been historically marginalized and overburdened by pollution, including, but not limited to, minority populations, low-income populations, or indigenous peoples. Applicants will identify potentially affected environmental justice communities using the identification methods consistent with current Commission practice. The Commission seeks comment on the definition of “environmental justice community.” 

Once such environmental justice communities are identified, the NOPR proposes to require applicants to develop and file an Environmental Justice Public Engagement Plan as part of their Project Participation Plan. The Environmental Justice Public Engagement Plan must describe the applicant’s completed and planned outreach activities that are targeted to identified environmental justice communities.  The plan must also summarize comments received from potentially impacted environmental justice communities during any previous outreach activities and planned efforts to identify, engage, and accommodate non-English speaking groups or linguistically isolated communities.  The plan should also describe the manner in which the applicant will reach out to environmental justice communities about potential mitigation measures that could be applied to reduce the impact of the proposed project.

See also the discussion below about the new requirement for the applicant to submit an Environmental Justice Resource Report.

---

Q. What are the standards that FERC will use when considering an application?

A. FPA Section 216 requires that FERC find the following facts in order to approve a permit to build:

• the facilities to be authorized by the permit will be used for the transmission of electric energy in interstate commerce;
• the proposed construction or modification is consistent with the public interest;
• the proposed construction or modification will significantly reduce transmission congestion in interstate commerce and protects or benefits consumers;
• the proposed construction or modification is consistent with sound national energy policy and will enhance energy independence; and
• the proposed modification will maximize, to the extent reasonable and economical, the transmission capabilities of existing towers or structures.

Moreover, as required by the National Environmental Policy Act of 1969 (NEPA), the Commission will conduct an environmental analysis of the proposed transmission facilities.  The Commission’s NEPA review of the proposed facilities will result in the issuance of an environmental assessment or environmental impact statement.  If the Commission believes the proposed facilities may not have a significant effect on the quality of the human environment, an environmental assessment, rather than a more detailed environmental impact statement, will be prepared first.  Depending on the outcome of the environmental assessment, the Commission may or may not prepare an environmental impact statement.

---

Q.  What sort of environmental evaluations are required to build transmission infrastructure in National Corridors?  Is FERC proposing to change environmental evaluations and reports as part of this NOPR?

A. FERC revised its regulations implementing NEPA, 18 CFR Part 380, back in 2006, in order to accommodate transmission siting cases under FPA Section 216. 18 CFR § 380.16 is targeted to FPA Section 216 applications and requires applicants to submit eleven resource reports containing specific environmental information.  For example, Resource Report 1 requires the submission of essential information such as a project description, maps, required authorizations, and the names and addresses of all affected landowners; Resource Report 2 requires the applicant to determine impacts on water use and water quality. In the NOPR, the Commission is proposing to add the requirement of a new (i) Tribal Resources Report, (ii) Environmental Justice Resource Report, and (iii) an Air Quality and Environmental Noise Resource Report.

In addition, the NOPR is proposing to expand the visual resource requirements in the existing Land Use, Recreation, and Aesthetics Resource Report.  This reflects the fact that transmission facilities, often on tall poles, can have major impacts on the visual character of surrounding neighborhoods. Therefore, the NOPR proposes that the applicant:

• identify the area of potential visual effects from the proposed project;
• describe any visually sensitive areas, visual classifications, and key viewpoints in the project vicinity; and
• provide visual aids to support the evaluation of visual impacts from the proposed project.

FERC is seeking comments on the whole of the Commission’s NEPA regulations pertaining to electric transmission facilities at 18 CFR Part 380, including the proposed changes thereto in the NOPR.  

---

Q. What information would the applicant need to include in the Tribal Resources Report as part of the environmental evaluation?

A. Although there are Tribal impact requirements in the current regulations, the NOPR is proposing to break out this section into its own resource report, the Tribal Resources Report. This resource report would require the applicant to:

• identify potentially affected Tribes;
• describe the impacts of project construction, operation, and maintenance on Tribes and Tribal interests, including impacts related to enumerated resource areas; and
• describe project impacts that may affect Tribal interests that are not necessarily associated with particular resource areas (e.g., treaties, Tribal practices, or agreements). 

The NOPR states that this information is necessary to fully evaluate the effects of a proposed project in furtherance of the Commission’s trust responsibility to Tribes and its statutory obligations under the FPA and NEPA.

---

Q. What information would the applicant need to include in the Environmental Justice Resource Report as part of the environmental evaluation?

A. The NOPR proposes a new Environmental Justice Resource Report in furtherance of Executive Orders that call for a focus on environmental justice concerns in federal permitting.  This resource report would require the applicant to:

• identify environmental justice communities within the project’s area of potential impacts;
• describe the impacts of project construction, operation, and maintenance on environmental justice communities, including whether any impacts would be disproportionately high and adverse;
• discuss cumulative impacts on environmental justice communities, including whether any cumulative impacts would be disproportionately high and adverse; and 
• describe any proposed mitigation measures intended to avoid or minimize impacts on environmental justice communities, including any community input received on the proposed measures and how the input informed the proposed measures. 

As noted above, a definition of “environmental justice community” is being proposed as well in the NOPR.

---

Q. What information would the applicant need to include in the Air Quality and Environmental Noise Resource Report as part of the environmental evaluation?

A. The third new resource report proposed in the NOPR, the proposed Air Quality and Environmental Noise Resource Report, would require the applicant to:

• estimate emissions from the proposed project and the corresponding impacts on air quality and the environment;
• estimate the impact of the proposed project on the noise environment; and
• describe any proposed measures to mitigate these impacts. 

---

Q. What other aspects of this transmission siting NOPR should I focus on?

A. That depends on your status (landowner, potential applicant, concerned citizen, or other stakeholder) and areas of interest. The NOPR includes the proposed changes to the regulations, lengthy explanations of those changes, the Landowner Bill of Rights in the Appendix, and concurring statements by Commissioners Danly and Christie, among other things.[x] This explainer seeks to provide a summary of key points, but each reader will have their own specific interests and they may change over time. To track the comments submitted by other stakeholders and other developments, including FERC rulings, you may want to eSubscribe to Docket RM22-7.

OPP can assist you with eSubscription, finding documents on eLibrary, filing comments, or with other questions at opp@ferc.gov or (202)502-6595.