FERC Approves Request Related to West Coast Renewable Transmission Project

Posted on April 21, 2008 by Dennis Pfaff

The Federal Energy Regulatory Commission has partially approved Pacific Gas and Electric Company's request that allows the company to recover from customers at least some of the costs related to a 1,000-mile transmission project intended to deliver power from renewable sources.

In the words of a statement from the federal agency, it gave partial approval to the Northern California utility's "petition for a declaratory order for recovery of prudently incurred pre-commercial and abandonment costs" related to the effort (see text of statement here; see full text of decision here). The $3.2 billion project would deliver up to 3,000 megawatts of new renewable power to California from Canada's British Columbia and from states in the Pacific Northwest.

The project will also be designed to take advantage of the fact that demands in the region peak at different times of the year, according to a statement from one of the commissioners. 

The Energy Policy Act of 2005 gave the commission authority to encourage greater investment in the power grid, including granting incentives allowing the recovery through rates of the costs associated with the projects. Barbara Connors, a spokeswoman for the commission, declined to put a dollar figure on the items so far approved by the panel.

     

 

 

 

"This is an early stage request," she told Climate Law Update. She also noted that the action does not approve the project's construction. Some aspects of the law relating to the federal government's authority to address the location of transmission projects have been controversial (see Climate Law Update story here). 

Commissioner Marc Spitzer said the approval of incentives for the PG&E project and a separate effort in the Mid-Atlantic region show the commission is willing to exercise the authority granted to it under the 2005 law.

"Our policies are making a difference – major backbone transmission projects are being proposed and built throughout our nation,” Spitzer said in the commission's statement. 

The commission rejected as premature the utility's request for "construction-work-in-progress" and "return on equity" incentives. Instead, the regulators suggested that PG&E re-submit its request for any additional incentives once it completes studies to determine if it meets FERC standards for infrastructure incentives. Under a prior order approved by the commission, applicants seeking the incentives must show that the proposed facilities either ensure reliability or reduce the cost of delivered power by reducing congestion.

In a separate statement, Commissioner Philip D. Moeller applauded the company for "taking a bold step in leading the effort" to develop the proposed project. He added that "broad regional cooperation is also contemplated" as PG&E proposes to design the project to take advantage of the seasonal demands in the region, where California's demand peaks in the summer, whereas demands in Canada and the Northwest peak in the winter (see text of statement here).

(Transmission lines with Oregon's Mount Hood in background; U.S. Department of Energy photo)
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Groups Bring Challenges to Federal Transmission Corridor Designations

Posted on March 19, 2008 by Dennis Pfaff

Environmental groups are pursuing a slew of lawsuits against a U.S. Department of Energy determination that large areas in the Southwest and Mid-Atlantic states could suffer from electric transmission congestion. The energy department action opens the regions to a process under which federal regulators can approve new transmission lines, even if states object.

The latest case (see docketing statement and petition for review), filed a few days ago in the 9th U.S. Circuit Court of Appeals headquartered in San Francisco, opens a new front in the legal battle over the energy department's designation of two National Interest Electric Transmission Corridors.  Those are areas the department determines to be facing transmission congestions or constraints that harm consumers. Environmental groups earlier this year filed similar lawsuits in lower federal courts in Los Angeles and Pennsylvania separately challenging each of the corridor delineations.

All of the cases raise allegations that the energy department's decision violated the National Environmental Policy Act and the Energy Policy Act of 2005 when it designated the transmission corridors. The Los Angeles lawsuit, filed by the Center for Biological Diversity, was recently amended (see press statement) to include a claim under the Endangered Species Act, like its sister case in Pennsylvania. Additionally, the Pennsylvania lawsuit cites the National Historic Preservation Act.

A department spokeswoman said Wednesday the designations didn't themselves affect the environment and she insisted all parties had gotten a fair chance to comment.

 

According to the two earlier lawsuits, the designation of the Southwest corridor affects an area of 70,000 square miles in California and Arizona, while the Mid-Atlantic region covered by the department’s action includes “broad areas” of eight states and the District of Columbia.

The new move to the 9th Circuit came after federal officials argued in the Pennsylvania case that such challenges could only be brought in the appeal courts. Although the initial filing in the appeals court did not include details of the plaintiffs’ allegations, a public statement from the organizations involved in the case outlined a number of objections, including the department’s alleged failure to fully consider public comments and alternatives.   

The cases stem from the department’s decision last October to designate the two corridors. The latest lawsuit came shortly after the department earlier this month denied requests to reconsider the order (see DOE press statement here).

Areas within the corridors could be subject to jurisdiction by the Federal Energy Regulatory Commission under the energy policy law, according to energy department documents.

“In practice, this will mean that if an applicant does not receive approval from a state to site a proposed new transmission facility within a national corridor, the applicant may then apply to FERC for a permit and authorization to construct the facility,” the energy department said in an information packet distributed at the time of the October decision. Once granted a permit, a builder could also use the power of eminent domain to acquire property rights for the lines, except if the land is owned by the state or federal governments, the department said.

Opponents of the department’s move saw numerous problems with it. The Pennsylvania lawsuit, charged, for instance:

“As a result of the Order, proposed utility and transmission line projects
within the Corridor will be subject to “fast-track” federal approval, bypassing
state-level processes for locating transmission infrastructure, overriding federal
environmental laws, and enabling federal condemnation of private land and
diversion of public land for new high voltage transmission lines.

By facilitating utility right-of-way creation and transmission line construction without a detailed analysis of the associated environmental impacts and without full consultation with the appropriate resource and land management agencies, DOE’s proposed corridor designation will have avoidable impacts on ecosystems, wildlife habitats and populations, historic resources and water quality.”


Anjali Jaiswal, an attorney for the Natural Resources Defense Council, one of the groups bringing the 9th Circuit lawsuit, said the case was not about stopping transmission projects:

“We recognize the need for increased investment in transmission solutions across the country. But we need to ensure that these transmission corridor designations take place in compliance with federal environmental law.”

The lead plaintiff in the case was the Wildnerness Society. The California Wilderness Coalition also joined the litigation. 

In its public statement released at the time of the rehearing denial, the energy department said it had “dismissed without merit” challenges raised by those seeking a new look at the decision. It also asserted that a number of federal statutes, including those cited in the lawsuits, were “not applicable” to the decision to designate the corridors. Rather, reviews under those laws would be conducted by FERC before issuing any construction permit.

Julie Ruggiero, a spokeswoman for the energy department, said Wednesday that the designation of the corridors "in and of itself has no environmental impact and instead shines a spotlight on areas of the country that are experiencing congestion and constraint." She said the department had also provided "all interested parties with fair and ample opportunities" to give their views.

Last month, the federal attorneys representing the energy department moved to dismiss the Pennsylvania case, arguing such challenges could only be heard in the court of appeals.

(Photograph of transmission lines in Oregon courtesy Department of Energy)
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