Ninth Circuit Strikes Down DOE's Designation of Two National Interest Electric Transmission Corridors

In California Wilderness Coalition, et al. v. U.S. DOE, 631 F.3d 1072 (9th Cir. 2011), the court reviewed thirteen petitions filed in several different circuits challenging the Department of Energy’s (“DOE”) implementation of Section 216 of the Federal Power Act (“FPA”), 16 U.S.C. § 824p.  The court vacated DOE’s designation of two transmission corridors as national interest electric transmission corridors (“NIETCs”).

Background

As part of the Energy Policy Act of 2005 (“EPACT 2005”), Congress added Section 216 to the FPA permitting the DOE to designate any geographic area as a NEITC if DOE finds that the geographic area experiences electric transmission capacity constraints or congestion that adversely affects consumers.  The designation of an area as a NEITC makes available a fast-track process for utilities seeking permits to build new transmission facilities in that area.  Specifically, FERC is empowered to grant a permit for transmission facilities within the NEITC if a state agency fails to approve the permit application within a year.

After issuing a Congestion Study and conducting technical conferences and a rulemaking proceeding, DOE issued an order on October 5, 2007 formally designating two NEITCs, the Mid-Atlantic Area National Interest Electric Transmission Corridor and the Southwest Area National Interest Electric Transmission Corridor.  DOE denied rehearing requests regarding its October 5, 2007 order.  Thirteen petitions for review were filed and were consolidated for consideration by the Ninth Circuit.

The Ninth Circuit’s Opinion

As stated above, the Ninth Circuit vacated DOE’s designation order.  First, the court held that DOE had failed to consult with the affected states in a meaningful way that complied with the letter and the spirit of Section 216.  On remand, DOE must prepare another Congestion Study in consultation with the states.  DOE’s conclusions following the new Congestion Study may be judicially reviewed.

Second, the court held that DOE’s designation order constituted a major federal action affecting the environment.  Therefore DOE’s failure to conduct an environmental analysis is an independent ground for vacating DOE’s designation order.  Accordingly, on remand DOE must prepare at least one Environmental Assessment, and perhaps a full Environmental Impact Statement, to determine whether there are substantial environmental impacts resulting from its new designation order.

Comments

Section 216 of the FPA has not fared well in the courts.  Congress hoped that it had created a mechanism to promote the construction of long-line high-voltage transmission facilities.  However, the Fourth Circuit held that FERC has no permitting authority under Section 216 when a state has affirmatively denied permit application within the statutory deadline.  Piedmont Environmental Council v. FERC, 558 F.3d 304 (4th Cir. 2009).  The Ninth Circuit has now invalidated DOE’s designation of two NIETCs, as discussed above.

Almost six years after the enactment of EPACT 2005, no transmission facilities have been permitted pursuant to Section 216 of the FPA.  As a result of the two Circuit Court opinions discussed above, the use of Section 216 as a means of promoting fast-track construction of transmission facilities is highly questionable.

If you have any questions concerning this decision or its implications, or if you would like a copy of the decision, please contact Jim McGrew at  This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 202-296-1500.