[Federal Register: October 5, 2007 (Volume 72, Number 193)]
[Notices]
[Page 56992-57028]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05oc07-41]
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DEPARTMENT OF ENERGY
[Docket No. 2007-OE-01, Mid-Atlantic Area National Interest Electric
Transmission Corridor; Docket No. 2007-OE-02, Southwest Area National
Interest Electric Transmission Corridor]
National Electric Transmission Congestion Report
AGENCY: Department of Energy.
ACTION: Order.
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SUMMARY: The following is a report by the Department of Energy
(Department or DOE) on its August 2006 National Electric Transmission
Congestion Study under section 216 of the Federal Power Act (FPA). This
report and order designates two national interest electric transmission
corridors: The Mid-Atlantic Area National Interest Electric
Transmission Corridor (Docket No. 2007-OE-01); and the Southwest Area
National Interest Electric Transmission Corridor (Docket No. 2007-OE-
02). A list of the acronyms used in this report and order, and maps of
the two national interest electric transmission corridors are provided
at the end of this order.
DATES: The designations are effective October 5, 2007 and will remain
in effect until October 7, 2019 unless the Department rescinds or
renews the designation after notice and opportunity for comment.
FOR FURTHER INFORMATION CONTACT: For technical information, David
Meyer, DOE Office of Electricity Delivery and Energy Reliability, (202)
586-1411, david.meyer@hq.doe.gov. For legal information, Warren Belmar,
DOE Office of Legal Counsel, (202) 586-6758, warren.belmar@hq.doe.gov,
or Lot Cooke, DOE Office of the General Counsel, (202) 586-0503,
lot.cooke@hq.doe.gov.
SUPPLEMENTARY INFORMATION:
I. Background
A. Statutory Framework
Section 1221(a) of the Energy Policy Act of 2005 (Pub. L. 109-58)
(EPAct) added a new section 216 to the Federal Power Act (16 U.S.C.
824p) (FPA). New FPA section 216(a) requires the Secretary of Energy
(Secretary) \1\ to conduct a nationwide study of electric transmission
congestion \2\ within one year from the date of enactment of EPAct and
every three years thereafter. FPA section 216(a)(2) provides
``interested parties'' with an opportunity to offer ``alternatives and
recommendations.'' 16 U.S.C. 824p(a)(2). Following consideration of
such alternatives and recommendations, the Secretary is required to
issue a report on the study ``which may designate any geographic area
experiencing electric energy transmission capacity constraints or
congestion that adversely affects consumers as a national interest
electric transmission corridor.'' FPA section 216(a)(2), 16 U.S.C.
824p(a)(2). FPA section 216(a)(4) states that in determining whether to
designate a national interest electric transmission corridor (National
Corridor), the Secretary may consider whether:
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\1\ This report uses the terms ``Secretary,'' ``Department,''
and ``DOE'' interchangeably.
\2\ Electric transmission congestion (congestion) is the
condition that occurs when transmission capacity is not sufficient
to enable safe delivery of all scheduled or desired wholesale
electricity transfers simultaneously. Congestion results from a
transmission capacity constraint (constraint).
(A) the economic vitality and development of the corridor, or
the end markets served by the corridor, may be constrained by lack
of adequate or reasonably priced electricity;
[[Page 56993]]
(B)(i) economic growth in the corridor, or the end markets
served by the corridor, may be jeopardized by reliance on limited
sources of energy; and (ii) a diversification of supply is
warranted;
(C) the energy independence of the United States would be served
by the designation;
(D) the designation would be in the interest of national energy
policy; and
(E) the designation would enhance national defense and homeland
security.
16 U.S.C. 824p(a)(4).
FPA section 216 imposes several consultation requirements upon the
Department. FPA section 216(a)(1) states that the Department shall
conduct the congestion study in consultation with affected States. 16
U.S.C. 824p(a)(1). FPA section 216(a)(3) requires the Department to
conduct the congestion study and issue the report in consultation with
any appropriate Regional Entity. 16 U.S.C. 824p(a)(3).\3\ In addition,
FPA section 216(h)(9) states:
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\3\ Regional Entities are regional reliability organizations to
which the North American Electric Reliability Corporation (NERC), as
the designated Electric Reliability Organization under FPA section
215, has delegated authority to propose and enforce electric
reliability standards.
In exercising the responsibilities under this section, the
Secretary shall consult regularly with--
(A) the Federal Energy Regulatory Commission;
(B) electric reliability organizations (including related
regional entities); and
(C) Transmission Organizations approved by the Commission.
16 U.S.C. 824p(h)(9).\4\
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\4\ As defined in FPA section 215(a)(6), 16 U.S.C. 824o(a)(6),
``Transmission Organizations'' include Regional Transmission
Organizations (RTOs) and Independent System Operators (ISOs). RTOs
and ISOs are Federally regulated entities charged with operating a
regional transmission system in a manner that is non-discriminatory
and ensures safety and reliability. The existing RTOs and ISOs do
not own any transmission or generation and are run by independent
boards of directors.
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The effect of a National Corridor designation is to delineate
geographic areas within which, under certain circumstances, the Federal
Energy Regulatory Commission (FERC) may authorize ``the construction or
modification of electric transmission facilities.'' FPA section 216(b),
16 U.S.C. 824p(b). The statute imposes several conditions on the
exercise of FERC's permitting authority within a National Corridor.
Under FPA section 216(b)(1), FERC jurisdiction is triggered only
when either: the State does not have authority to site the project; the
State lacks the authority to consider the interstate benefits of the
project; the applicant does not qualify for a State permit because it
does not serve end-use customers in the State; the State has withheld
approval for more than one year; or the State has conditioned its
approval in such a manner that the project will not significantly
reduce congestion or is not economically feasible. 16 U.S.C.
824p(b)(1). FERC has issued regulations governing the process it will
follow when reviewing any applications under FPA section 216(b), and
those regulations incorporate the requirements of FPA section
216(b)(1).\5\ Further, FPA section 216(g) states, ``Nothing in this
section precludes any person from constructing or modifying any
transmission facility in accordance with State law.'' 16 U.S.C.
824p(g).
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\5\ Regulations for Filing Applications for Permits to Site
Interstate Electric Transmission Facilities, Order No. 689, 71 FR
69,440, 69,468 (Dec. 1, 2006), 117 FERC ] 61,202 at pp. 128-29
(2006) (to be codified at 18 CFR pts. 50 and 380) (FERC Order No.
689), order on reh'g, 119 FERC ] 61,154 (2007) (Sec. 50.6(e)
requires applicants to demonstrate that the conditions of FPA sec.
216(b)(1) are met).
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Under FPA section 216(b)(2)-(6), FERC may issue a permit only if
all of the following conditions are met: the facilities will be used
for the transmission of electric energy in interstate commerce; the
project is consistent with the public interest; the project will
significantly reduce congestion in interstate commerce and protect or
benefit consumers; the project is consistent with national energy
policy and will enhance energy independence; and the project maximizes,
to the extent reasonable and economical, the transmission capabilities
of existing towers or structures. 16 U.S.C. 824p(b)(2)-(6).\6\ With
regard to the condition that a project must ``significantly reduce
transmission congestion in interstate commerce and protects or benefits
consumers,'' FERC has stated that it interprets this to mean that a
project must significantly reduce the transmission congestion
identified by DOE.\7\
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\6\ See also id. (Sec. 50.6(f) requires applicants to
demonstrate that the conditions of FPA sec. 216(b)(2)-(6) are met).
\7\ See id., 71 FR 69,440, 69,446, 117 FERC ] 61,202 at P 41.
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In order to construct a transmission facility, a developer must
obtain both a construction permit as well as a right-of-way across each
piece of public or private property along the route. If FERC were to
issue a permit under FPA section 216(b), it would constitute the
construction permit; it would not, in and of itself, grant any rights-
of-way. Thus, the holder of a FERC permit would still need to obtain
rights-of-way. The first step in obtaining such rights-of-way would be
for the developer to initiate negotiations with each affected property
owner. If the permit holder could not acquire a necessary right-of-way
through negotiation with a private property owner, then the FERC permit
would entitle the permit holder to acquire the right-of-way by exercise
of the right of eminent domain in either Federal or State court. FPA
sec. 216(e)(1), 16 U.S.C. 824p(e)(1). The court would then determine
the just compensation owed to the property owner by the permit holder,
which would be the fair market value (including applicable severance
damages) of the property taken on the date of the exercise of eminent
domain authority. FPA sec. 216(f)(2), 16 U.S.C. 824p(f)(2).
The right of eminent domain would not apply to property owned by
the United States or a State. Id. Thus, if FERC were to issue a permit
for a transmission facility across Federal or State property, the
permit holder would still need to reach agreement with the Federal or
State agency responsible for managing that property in order to obtain
a right-of-way across that property. In addition, FPA section 216(j)(1)
provides that except as specifically provided, nothing in FPA section
216 affects any requirement of any Federal environmental law. 16 U.S.C.
824p(j)(1). Thus, a FERC permit does not absolve the permittee of
compliance with other Federal law, including obtaining authorizations
from other agencies implementing applicable Federal environmental laws.
The statute provides a specific mechanism by which States can
insulate themselves from the FERC permitting provisions of FPA section
216(b). FPA section 216(i) provides special treatment where three or
more contiguous States have entered into an interstate compact, subject
to approval by Congress, establishing a regional transmission siting
agency to carry out the electric transmission siting responsibilities
of the member States. If such a compact were established, FERC would
have no authority to issue a transmission permit within any of the
member States unless those members were in disagreement and the
Secretary, after notice and opportunity for a hearing, made a finding
that the conditions of FPA section 216(b)(1)(C) were met. FPA section
216(i)(4); 16 U.S.C. 824p(i)(4).
FPA section 216(a) does not shift to the Department the roles of
electric system planners or siting authorities in evaluating solutions
to congestion and constraint problems. Transmission expansion is but
one possible solution to a congestion or constraint problem. Other
potential solutions include increased demand response; improved energy
efficiency; deployment of
[[Page 56994]]
advanced technology; and siting of additional generation, including
distributed generation, close to load centers. Nothing in FPA section
216 requires or suggests that the Department should engage in a
comparison of the relative merits of these different solutions to
easing congestion in a specific geographic area.
For example, the congestion study required by FPA section 216(a)(1)
is described as ``a study of electric transmission congestion,'' rather
than a study of either the solutions to congestion or the need for
transmission. FPA section 216(a)(2) authorizes the Department to
designate areas experiencing constraints or congestion that adversely
affect consumers, rather than areas where more transmission is needed.
None of the considerations identified in FPA section 216(a)(4)
necessitate a comparison of transmission and non-transmission
solutions. The first two considerations, which look at whether economic
vitality is constrained by either lack of adequate or reasonably priced
electricity or reliance on limited sources of energy, focus on the
effects of congestion and constraints rather than the effects of any
potential solutions to such congestion or constraints. The remaining
considerations address whether a National Corridor designation, rather
than the construction of additional transmission, would promote energy
independence, national energy policy, or national defense and homeland
security.
Thus, FPA section 216(a) assigns to the Department the role of
identifying transmission congestion and constraint problems, and the
geographic areas in which these problems exist. A National Corridor
designation is not a determination that transmission must, or even
should, be built. Whether a particular transmission project, some other
transmission project, or a non-transmission project is an appropriate
solution to a congestion or constraint problem identified by a National
Corridor designation is a matter that market participants, applicable
regional planning entities, State authorities, and potentially FERC
will consider and decide before any project is built. A National
Corridor designation itself does not preempt State authority or any
State actions, including action to approve or order the implementation
of non-transmission solutions to congestion and constraint problems. If
FERC jurisdiction under FPA section 216(b) were triggered, the
designation of a National Corridor by the Secretary would not control
FERC's substantive decision on the merits as to whether to grant or
deny the permit application. Moreover, FERC has committed to
considering non-transmission alternatives, as appropriate, during its
permit application review process.\8\
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\8\ See id.; see also 119 FERC ] 61,154 at P 61 (``During the
pre-filing and application processes, Commission staff will work
with the applicant and stakeholders to define issues in each
proceeding, including the development of appropriate alternatives *
* *. The public will have the opportunity to participate and file
comments--which can include suggested alternatives of any kind--
throughout this review.'').
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Not only would a National Corridor designation not prejudice State
or Federal siting processes against non-transmission solutions, it also
should not discourage market participants from pursuing such solutions.
Implementation of one solution to a congestion or constraint problem
can reduce, and in some cases eliminate, the need for, and thus the
viability of, competing solutions. For example, if a transmission line
enabling the delivery of low-cost power from generation sources outside
of a load center were to be put into service, the economic incentive to
build a new generator closer to load could be eliminated. Designation
of a National Corridor, however, does not constitute, advocate, or
guarantee approval of any particular transmission project. Also, FERC,
as discussed above, may only issue a permit if the applicant has shown
that its project ``will significantly reduce transmission congestion in
interstate commerce and protects or benefits consumers.'' If competing
projects were to fully resolve the congestion or constraint problem
before the issuance of a FERC permit, it would be difficult for the
sponsor of a transmission project to make such a showing.\9\ Further,
developers who diligently pursue meritorious non-transmission solutions
may be able to obtain approval for those solutions long before a FERC
permit is issued. In many cases it has taken less time to plan, get
approval for, and implement non-transmission projects than transmission
projects.\10\ In fact, FPA section 216, far from disadvantaging certain
approaches to addressing congestion or constraint problems, is an
attempt by Congress to put transmission projects on more of a level
playing field with other congestion solutions.
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\9\ If non-transmission projects had not fully resolved the
congestion problem, it would seem appropriate to consider the need
for new transmission to supplement those non-transmission projects,
and non-transmission project sponsors would have no legitimate
expectation to the contrary.
\10\ See, e.g., S.P. Vajjhala and Paul S. Fischbeck, Quantifying
Siting Difficulty, A Case Study of U.S. Transmission Line Siting,
Resources For the Future Discussion Paper 06-03, at 3 (Feb. 2006)
(``Transmission line siting is one of the most extreme examples of
siting difficulty today * * *. Siting problems are not unique to the
electricity industry; however, siting difficulties associated with
transmission lines are especially complex.'').
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Nor are the time frames established under FPA section 216 likely to
provide any unfair head-start for transmission projects. A transmission
developer must first devise a detailed plan for the project. Given the
highly interconnected nature of the transmission grid, a developer
considering any significant transmission project would need to work
with the relevant RTO, ISO, or other regional or sub-regional
transmission planning entities to explore the feasibility, likely
costs, and likely system effects of alternative project designs. After
having done substantial preparatory analyses and settled on a project
design, the developer in most cases would file a permit application
with a State agency and could not seek FERC review until the State had
had one year to evaluate and act upon the application. FPA section
216(h) establishes a mechanism to ensure that requests for Federal
authorizations to construct transmission facilities, whether within or
outside a National Corridor, are acted upon within one year. 16 U.S.C.
824p(h).
However, a transmission developer must first complete a pre-filing
process before filing an application at FERC that would trigger the
one-year deadline under FPA section 216(h).\11\ FERC has indicated that
the pre-filing process for extensive projects may take a year to
complete.\12\ Thus, designation of a National Corridor should not
reduce the incentive or time available to sponsors of non-transmission
solutions to pursue such solutions.
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\11\ FERC Order No. 689, 71 FR 69,440, 69,466-67, 117 FERC ]
61,202 at pp. 122-27 (Sec. 50.5 establishes mandatory pre-filing
procedures).
\12\ Id., 71 FR 69,440, 69,453, 117 FERC ] 61,202 at P 112.
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A National Corridor designation is not the cause of proposals to
construct transmission. A National Corridor designation is not a
proposal to build a transmission facility and it does not direct anyone
to make a proposal. A National Corridor designation does not create or
discover the need to consider solutions to congestion or constraint
problems. Developers of electricity projects, be they transmission or
non-transmission, react to the state of the grid. It is the presence of
congestion and constraints, already well known to most market
participants, that causes developers to undertake projects.
Just as a National Corridor designation is not a decision about the
[[Page 56995]]
best solution to a congestion or constraint problem, it also is not a
siting decision. FPA section 216(a) does not shift to the Department
the role of designing routes for transmission facilities, and a
National Corridor designation does not dictate or endorse the route of
any transmission project. If a transmission project is proposed in a
National Corridor, it will be the State or local siting authorities,
and potentially FERC if certain conditions are met, that will determine
the specific route of that project. The designation of a National
Corridor by the Secretary does not control FERC's substantive decision
on the merits as to where any facilities covered by a permit should be
located, or what conditions should be placed on that permit. If FERC
jurisdiction were triggered by a proposed transmission project, FERC
would conduct an evaluation of the reasonably foreseeable effects of
transmission construction, including an analysis of alternative routes
and mitigation options. Based on that analysis, FERC has the authority
to approve the application, deny the application, or approve the
application with modifications.\13\
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\13\ See, e.g., id. 71 FR 69,440, 69,446, 117 FERC ] 61,202 at
PP 41-42 (``The Commission will conduct an independent environmental
analysis of the project and determine if there is no significant
impact as required by [the National Environmental Policy Act]. It
will look at alternatives * * *. It will review the alternatives for
their respective impacts on the environment and will determine
mitigation measures to lessen the adverse impacts * * *. The
Commission will also consider the adverse effects the proposed
facilities will have on land owners and local communities.''); and
71 FR 69,440, 69,470, 117 FERC ] 61,202 at p. 142-43 (Sec. Sec.
380.5(b)(14) and 380.6(a)(5) require either an environmental
assessment or an environmental impact statement for projects seeking
permits under sec. 216(b)).
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In sum, by adding section 216 to the FPA, Congress directed that
the National Corridor designation process establish a Federal safety
net to provide, in a defined set of circumstances, an opportunity for
analysis of the need for transmission from a national, rather than a
State or local, perspective.
B. Congestion Study
In accordance with the mandate of FPA section 216(a)(1), the
Department issued its initial congestion study (the Congestion Study)
for comment on August 8, 2006. The Congestion Study gathered historical
congestion data obtained from existing studies prepared by the regional
reliability councils, RTOs and ISOs, and regional planning groups. The
Congestion Study also modeled future congestion: The years 2008 and
2011 for the Eastern Interconnection; and the years 2008 and 2015 for
the Western Interconnection. The modeling focused on five metrics:
Binding hours (the number of hours per year that a path is loaded to
its safe limit and, thus, unable to accommodate all desired power
transactions), U90 (the number of hours per year that a path is loaded
above 90 percent of its limit), all-hours shadow price (the marginal
cost of generation redispatch required to accommodate a given
constraint averaged across all hours in the year), binding hours shadow
price (average shadow price over only those hours during which the
constraint is binding), and congestion rent (shadow price multiplied by
flow, summed over all hours the constraint is binding).
Based on the historical data and the modeling results, the
Congestion Study identified and classified the most significant
congestion areas in the country. Two ``Critical Congestion Areas''
(i.e. areas where the current and/or projected effects of congestion
are especially broad and severe) were identified: The Atlantic coastal
area from metropolitan New York through northern Virginia (the Mid-
Atlantic Critical Congestion Area); and southern California (the
Southern California Critical Congestion Area). Four ``Congestion Areas
of Concern'' (i.e. areas where a large-scale congestion problem exists
or may be emerging but more information and analysis appear to be
needed to determine the magnitude of the problem) were identified: New
England; the Phoenix-Tucson area; the San Francisco Bay area; and the
Seattle-Portland area. Also, a number of ``Conditional Congestion
Areas'' (i.e. areas where future congestion would result if large
amounts of new generation were to be developed without simultaneous
development of associated transmission capacity) were identified, such
as: Montana-Wyoming; Dakotas-Minnesota; Kansas-Oklahoma; Illinois,
Indiana and upper Appalachia; and the Southeast.
C. May 7 Notice
On May 7, 2007, the Department published a notice in the Federal
Register that summarized and responded to the comments relevant to
National Corridor designation received in response to the Congestion
Study. 72 FR 25,838 (May 7, 2007) (May 7 notice). The May 7 notice also
issued and solicited comment on draft National Corridor designations
for the two Critical Congestion Areas identified in the Congestion
Study: The draft Mid-Atlantic Area National Corridor; and the draft
Southwest Area National Corridor.
In the May 7 notice, the Department noted that the term
``constraints or congestion that adversely affects consumers'' as used
in FPA section 216(a)(2) is ambiguous and stated that while it was not
attempting to define the complete scope of the term, the term does
include congestion that is persistent. Thus, the Department stated that
FPA section 216(a) gives the Secretary the discretion to designate a
National Corridor upon a showing of the existence of persistent
congestion, as persistent congestion has adverse effects on consumers.
The Department also stated that the Secretary would decide whether to
exercise the discretion to make National Corridor designations based on
the totality of the information developed, taking into account relevant
considerations, including the considerations identified in FPA section
216(a)(4), as appropriate. Further, the Department concluded that it
would use a source-and-sink approach \14\ to delineate the boundaries
of the draft Mid-Atlantic Area National Corridor and the draft
Southwest Area National Corridor.
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\14\ ``Source'' refers to an area of existing or potential
future generation, and ``sink'' refers to the area of consumer
demand or ``load.''
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With regard to the Mid-Atlantic Critical Congestion Area, the
Department noted that the Congestion Study had identified this area
based on evidence of historical, persistent congestion caused by
numerous well-known constraints that are projected to continue and
worsen unless addressed through remedial measures. The Department
provided data documenting how frequently these constraints have been
binding, and noted that the modeling for the Congestion Study projected
that some of these constraints will continue to be problems in 2008,
along with other additional constraints. The Department also documented
the existence of persistent congestion through regional differences in
generation capacity factors within the footprints of the PJM
Interconnection, LLC, (PJM) \15\ and the New York Independent System
Operator (NYISO).\16\ Based on this information, the Department found
under FPA section 216(a)(2) that consumers in the Mid-Atlantic Critical
Congestion Area are being adversely affected by congestion.
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\15\ PJM is the RTO serving parts or all of Delaware, Illinois,
Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina,
Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the
District of Columbia.
\16\ NYISO is the ISO serving New York State.
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Having concluded that the Department may designate a National
Corridor for the Mid-Atlantic Critical Congestion Area, the Department
then examined whether it is appropriate to
[[Page 56996]]
exercise that discretion. Using historical data on locational marginal
prices (LMPs) and capacity prices, the Department documented that
congestion results in electricity consumers in the eastern portion of
PJM's footprint consistently paying higher electricity prices than
consumers in the western portion, and in consumers in southeast New
York consistently paying higher electricity prices than consumers in
the rest of the State. The Department documented that if action is not
taken to address congestion, consumers in the Baltimore-Washington-
Northern Virginia area, the northern New Jersey area, and southeast New
York face threats to the reliability of their electricity supply. The
Department also documented that congestion exacerbates the degree to
which consumers in the eastern portion of PJM and in southeast New York
rely on generation fueled by natural gas and oil. Finally, the
Department described the importance of the Mid-Atlantic Critical
Congestion Area to the security and economic health of the Nation as a
whole. Thus, the Department stated its belief that economic
development, reliability, supply diversity and energy independence, and
national defense and homeland security considerations warrant exercise
of the Secretary's discretion to designate a National Corridor for the
Mid-Atlantic Critical Congestion Area.
With regard to the Southern California Critical Congestion Area,
the Department noted that the Congestion Study had identified this area
based on evidence of historical, persistent congestion caused by
numerous well-known constraints that are projected to continue and
worsen unless addressed through remedial measures. The Department
provided data documenting how frequently these constraints have been
binding, and noted that the modeling for the Congestion Study projected
that some of these constraints will continue to be problems in 2008.
The Department also documented the existence of persistent congestion
using flow data, data on congestion and redispatch costs, and data on
transmission service denials. Based on this information, the Department
found under FPA section 216(a)(2) that consumers in the Southern
California Critical Congestion Area are being adversely affected by
congestion.
Having concluded that the discretion exists to designate a National
Corridor for the Southern California Critical Congestion Area, the
Department then examined whether it is appropriate to exercise that
discretion. The Department documented that if action is not taken to
address congestion, consumers in the Southern California Critical
Congestion Area face threats to the reliability of their electricity
supply. The Department also documented that congestion exacerbates the
reliance of consumers in Southern California Critical Congestion Area
on generation fueled by natural gas. Finally, the Department described
the importance of the Southern California Critical Congestion Area to
the security and economic health of the Nation as a whole. Thus, the
Department stated its belief that reliability, supply diversity, and
national defense and homeland security considerations warrant exercise
of the Secretary's discretion to designate a National Corridor for the
Southern California Critical Congestion Area.
To delineate the boundaries of both the draft Mid-Atlantic Area
National Corridor and the draft Southwest Area National Corridor, the
Department identified source areas that would enable a range of
generation options and then identified the counties linking the
identified source areas with the respective sink areas, i.e., the Mid-
Atlantic Critical Congestion Area and the Southern California Critical
Congestion Area.
The Department stated that it intended to set a 12-year term for
both the draft Mid-Atlantic Area National Corridor and the draft
Southwest Area National Corridor. The Department further stated that
FPA section 216(a)(1) did not require it to conduct an analysis of non-
transmission solutions to congestion before designating either the
draft Mid-Atlantic Area National Corridor or the draft Southwest Area
National Corridor, and that the National Environmental Policy Act of
1969 (NEPA) did not apply to either designation.
On June 7, 2007, the Department published a notice of correction
indicating that the May 7 notice had inadvertently omitted six counties
from the narrative list of counties comprising the draft Mid-Atlantic
Area National Corridor; the six counties had been correctly included,
however, in the map of the draft Mid-Atlantic Area National Corridor.
72 FR 31571 (June 7, 2007) (June 7 errata).
The comment period on the May 7 notice closed on July 6, 2007. The
Department also held a series of public meetings on the May 7
notice.\17\ All timely filed comments, as well as written comments
submitted at the public meetings and transcripts of those public
meetings were posted on the Department's Web site in order to
facilitate public review. In addition, the Department consulted with
each of the States within the two draft National Corridors,\18\ as well
as with the Regional Entities that have authority within the draft
National Corridors.\19\
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\17\ Arlington, VA, May 15, 2007; San Diego, CA, May 17, 2007;
New York City, NY, May 23, 2007; Rochester, NY, June 12, 2007;
Pittsburgh, PA, June 13, 2007; Las Vegas, NV, June 20, 2007; and
Phoenix, AZ, June 21, 2007.
\18\ The Department sent a letter to the Governor of each of the
States within the draft National Corridors and the Mayor of the
District of Columbia on April 26, 2007, requesting an opportunity to
consult with them on the draft designations. The Department then
held consultation meetings described below with the representatives
of the Governors and the Mayor. Delaware: The Department met with
Delaware on May 3, 2007, in the Governor's Washington, DC office. By
phone, a staff person from the Delaware Public Service Commission
and the Department of Natural Resources and Environmental Control
participated in the meeting. District of Columbia: The Department
met with the District of Columbia on June 27, 2007. This meeting
included staff from the DC Department of Environment and the Office
of the City Administrator. Maryland: On May 11, 2007, the Department
met with staff from the Governor's Washington, DC Office. New
Jersey: The Department met with New Jersey on May 9, 2007, in the
Governor's Washington, DC office. An aide from the Governor's staff
in New Jersey participated by phone. New York: The Department
conducted a conference call with staff from the Governor's Office in
Albany, NY on May 9, 2007. In addition, DOE met with staff from the
Governor's Washington, DC office on May 11, 2007. Ohio: The
Department met with Ohio on May 3, 2007, in the Governor's
Washington, DC office. By phone, this meeting included the
Governor's staff in Ohio and staff from the Public Utilities
Commission of Ohio. Pennsylvania: The Department met with staff from
the Governor's Office at DOE Headquarters on May 10, 2007. This
meeting included staff from the Pennsylvania Department of
Environmental Protection. Virginia: The Department conducted a
conference call with staff from the Governor's office on May 30,
2007. West Virginia: The Department conducted a conference call with
staff from the Governor's office on May 24, 2007. Arizona: The
Department met with staff from the Governor's Washington, DC office
on May 9, 2007. California: The Department conducted a conference
call with staff from the Governor's office on April 26, 2007. In
addition, the Department met with staff in the Governor's
Washington, DC office on May 3, 2007. Nevada: The Department met
with staff in the Governor's Washington, DC office on May 3, 2007.
\19\ On May 21, 2007, the Department sent letters to the
affected Regional Entities inviting consultation on the draft
designations. Northeast Power Coordinating Council, Inc. (NPCC)
responded and the Department conducted a conference call on July 6,
2007. ReliabilityFirst Corporation responded and the Department
conducted a conference call on July 3, 2007. SERC Reliability
Corporation and Western Electricity Coordinating Council (WECC) did
not respond, although WECC filed timely written comments in this
proceeding.
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D. Focus of This Report
1. Overview of Report
Section II of this report summarizes and responds to the comments
received on the draft Mid-Atlantic Area National Corridor. Section III
of this report summarizes and responds to the comments received on the
draft
[[Page 56997]]
Southwest Area National Corridor. Section IV summarizes and responds to
the comments received on the applicability of NEPA, the National
Historic Preservation Act (NHPA), and the Endangered Species Act (ESA)
to National Corridor designations. Section V of this report orders the
designation of the Mid-Atlantic Area National Corridor and the
Southwest Area National Corridor.
This report focuses on the two geographic areas of the Nation
experiencing the most acute and urgent electric transmission congestion
problems; the report takes no action with regard to the other
geographic areas discussed in the Congestion Study. The Department
recognizes that it has received many comments and suggestions
concerning the issues of: (1) National Corridor designation for areas
other than the two Critical Congestion Areas, (2) technical aspects of
the Congestion Study that relate to areas outside the two Critical
Congestion Areas, and (3) the conduct of future congestion studies. The
Department appreciates these comments and will consider these issues at
a later date.
2. Other Issues
Numerous commenters addressed issues that the Department considers
to be beyond the scope of this report. These issues are described
below.
a. Opposition to FPA Section 216
Summary of Comments
Many commenters opposed the very concept of a National Corridor and
urged the Department to refrain from designating any National
Corridors. Some of these commenters argued that the eminent domain and
Federal preemption provisions of FPA section 216 violate the Fifth and
Tenth Amendments to the U.S. Constitution \20\ and are
undemocratic.\21\ These commenters argued that a for-profit company
should never be granted eminent domain,\22\ and expressed skepticism
that the Federal government could appropriately balance competing
interests when reviewing applications to construct transmission.\23\
Some commenters objected to the provision in FPA section
216(b)(1)(C)(i) granting FERC jurisdiction within a National Corridor
where a State commission has withheld approval of a transmission
application for more than a year. These commenters argued that this
one-year deadline will not provide adequate time to assess meaningfully
the environmental impacts of a proposed transmission line project.\24\
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\20\ See, e.g., comments of Tommy and Kathy Hildebrand, Cindy
Carter, and Gary Manoni.
\21\ See, e.g., comments of Faith Bjalobok and statement of
Christopher Zimmerman at May 15, 2007, Arlington, VA public meeting.
\22\ See, e.g., comments of Joseph Zappulla and New York Public
Interest Research Group (NYPIRG). See also comments of the
Pennsylvania Senate.
\23\ See, e.g., comments of Howard Armfield (``The State
Corporation Commission of Virginia is in a better position than at
the Federal level to know the historical importance of areas under
consideration for a utility line.''), Donald Law (``The federal
government should not interfere with this process.''), Julie Keller
(``A state has better knowledge of the impact of transmission lines
etc. and bases it's decisions on the best interest of its local
citizens rather than private companies or federal agencies.''),
Jackie Grant (``I feel the public, local municipalities, and the
states should be able to address their energy needs locally. Local
and state efforts to resolve energy demands should not be undermined
by the federal government.''), and Chenango County Farm Bureau.
\24\ See, e.g., comments of the New Jersey Department of
Environmental Protection (NJDEP) and the Pennsylvania Department of
Environmental Protection (PaDEP).
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Other commenters urged the Department to refrain from designating
any National Corridors in light of various alleged generic adverse
effects of transmission, including: The effects of electromagnetic
fields on human health and the health of livestock and wildlife; \25\
the effect of herbicides used to maintain transmission rights of way;
\26\ disruption of farming; \27\ reduction of property values; \28\
effect on viewsheds; \29\ fragmentation of wildlife habitat; \30\ and
encroachment on open space.\31\
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\25\ See, e.g., comments of Lew McDaniel, David Katch, Alison
Hanham, and William Hopkins.
\26\ See, e.g., comments of Travis Turnley and Lee Scherer.
\27\ See, e.g., comments of Pennsylvania Farm Bureau.
\28\ See, e.g., comments of Sean Dobich, Jane Eickhoff, and
Henry Woolman III.
\29\ See, e.g., comments of Louise Peterson and Thomas Hoffman,
Jr.
\30\ See, e.g., comments of Murray Lantner and Ross Cooper.
\31\ See, e.g., comments of Michael McPoland and Aurore Giguet.
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Many commenters argued that instead of implementing FPA section
216(a), the Department should focus on developing and promoting a
national energy plan based on conservation, energy efficiency, and
distributed generation.\32\ These commenters argued that National
Corridor designations would encourage utilities to pursue outdated,
environmentally destructive transmission solutions and discourage the
development of more innovative, sustainable solutions. Michael
Arrington, for example, stated, ``[National Corridors] will only give
utilities another reason not to innovate or conserve.'' \33\
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\32\ See, e.g., comments of Upen Patel, John Sprieser, Raman
Jassal, Robert Hanham, Nora Palmatier, and Karen Kampfer, and
statement of Paul Miller at June 12, 2007, Rochester, NY public
meeting.
\33\ See also comments of Russell McKelway (``I believe that
cessation of land condemnation for power lines would force the kind
of conservation of energy that our country desperately needs to
reduce dependence on foreign sources of energy and to reduce global
warming.''), Nora Marsh (``Yes, we have energy issues but the
solution is not with old technology.''), and Sheila Paige
(``Conservation and anti-congestion planning are vitally important--
not to be swept under the rug by temporary and ill-researched band-
aids. These `corridors'--actually vast regions--represent nothing
but permission for power companies to continue doing what they do
badly.'').
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Numerous individuals suggested specific steps the Department should
take in lieu of designating National Corridors, including banning the
use of incandescent lights\34\ and mandating higher efficiency
standards in building codes.\35\
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\34\ See, e.g., comments of Joel Silverthorn and Karee Miller.
\35\ See, e.g., comments of Ben Pisarcik and A. Pellechia.
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DOE Response
These comments are essentially suggestions that Congress should not
have enacted FPA section 216, and requests that the Department ignore
FPA section 216(a) based on concerns about the very statutory
framework. The Department has an obligation to act consistent with the
terms of FPA section 216(a) as written and enacted into law. Objections
to the terms of this provision simply do not provide a basis for
declining to implement the statute.
The Department has no basis to conclude that the provision is
unconstitutional. The Fifth Amendment to the U.S. Constitution bars the
taking of private property for a public purpose without just
compensation, but as discussed in Section I.A above, FPA section
216(f)(2) explicitly provides for payment of just compensation in the
event that a FERC permit holder were to exercise the right of eminent
domain. While the Tenth Amendment reserves to States those powers not
delegated to the Federal government by the Constitution, the Interstate
Commerce Clause of Article I explicitly authorizes the Federal
government ``to regulate commerce with foreign nations, and among the
several states, and with Indian tribes.'' \36\ As discussed in Section
I.A above, FERC's permit authority is limited to facilities that will
be used for the transmission of electric energy in interstate commerce.
FPA section 216(b)(2), 16 U.S.C. 824p(b)(2).\37\
---------------------------------------------------------------------------
\36\ U.S. CONST. art. I, Sec. 8, cl. 3.
\37\ See also Pub. Util. Comm'n of R.I. v. Attleboro Steam &
Elec. Co., 273 U.S. 83, 86 (1927) (Attleboro) (transmission of
electricity from one State to another is interstate commerce); and
Fed. Power Comm'n v. Florida Power & Light, 404 U.S. 453, 462 (1972)
(FPL) (transmission of electricity within one State held to be
interstate commerce because the electricity commingled with
electricity that was being transmitted out of State).
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[[Page 56998]]
Further, there is nothing novel about either the concept of
granting eminent domain authority to for-profit utilities providing
services deemed to be in the public interest, or the concept of Federal
preemption with regard to the siting of interstate energy facilities.
In most States, for-profit utilities that obtain permits to construct
transmission facilities are granted the right of eminent domain.\38\
Also, FERC and its predecessor, the Federal Power Commission, have been
issuing permits for the construction of non-Federal hydropower
facilities and associated primary transmission lines since 1920 and for
the construction of interstate natural gas pipelines since 1938, all of
which permits granted the right of eminent domain. See FPA sec. 4(e)
and 21, 16 U.S.C. 797(e) and 814; and Natural Gas Act, sec. 7(a) and
(h), 15 U.S.C. 717f(a) and (h). In fact, given the inherently
interstate nature of transmission, Congress could have completely
preempted State siting of interstate transmission facilities, as it did
almost 70 years ago with regard to siting of interstate natural gas
pipelines.\39\
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\38\ See, e.g., ARIZ. REV. STAT. ANN. Sec. 12-1111 (2007); VA.
CODE ANN. Sec. 1-219.1 (2007); N.Y. TRANSP. CORP. LAW Sec. 11
(2006); W. VA. CODE ANN. Sec. 54-1-2 (2006); 66 PA. CONS. STAT.
ANN. Sec. 1104 (1978); CAL. PUB. UTIL. CODE Sec. 612 (1975).
Moreover, while FPA section 216(e)(1) provides holders of FERC
permits with the option of going to either Federal or State court to
exercise eminent domain, the statute also specifies that ``[t]he
practice and procedure'' in any Federal eminent domain proceeding
``shall conform as nearly as practicable to the practice and
procedure in a similar action or proceeding in the courts of the
State in which the property is located.'' FPA sec. 216(e)(3), 16
U.S.C. 824p(e)(3).
\39\ See, e.g., Attleboro, 273 U.S. at 86.
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As for those comments suggesting that a National Corridor
designation is never appropriate because of the risks posed by
transmission facilities, we note that all forms of energy
infrastructure pose risks and benefits. The nature and magnitude of the
risks and benefits posed by a particular infrastructure project (be it
transmission or non-transmission), the feasibility and cost of
mitigating those risks, and the comparison of the relative risks and
benefits of competing projects are all issues with which electric
system planners and siting authorities must grapple. However, as
discussed in Section I.A above, FPA section 216(a) does not shift to
the Department the roles of electric system planners or siting
authorities in evaluating solutions to congestion and constraint
problems. Moreover, the Department has no basis to conclude that the
effects of transmission are so adverse that National Corridor
designations are never warranted or are warranted only as a last
resort. In fact, FPA section 216 evinces Congress' concern that
transmission was not always being approved where and when needed.
With regard to comments that the Department should abandon
designation of National Corridors and pursue other energy policies, the
Department notes that it is already actively engaged in efforts to
promote conservation, energy efficiency, and distributed generation.
For example, the Department funds a broad range of research and
development in technologies that can be used as alternatives and
supplements to transmission lines, including: Advanced methods of
central generation such as nuclear energy, central solar, clean coal
and sequestration of its carbon emissions, wind, geothermal,
hydroelectric, and gas-fired combustion turbines; distributed
generation such as solar photovoltaics; energy efficiency; demand
response; better transmission conductors, such as those using high
temperature superconductivity, that greatly reduce transmission losses;
electricity storage; and ``smart grid'' technologies and related
methods. In addition, the Department provides best-practice-based
expert technical assistance to States that wish to enact electricity-
related laws, policies, or programs to encourage, allow, or otherwise
enable their electric utilities to make greater use of alternatives to
transmission lines. Upon the request of State utility regulators, the
Department also has facilitated efforts to build regional consensus on
means to improve energy efficiency, demand response, and distributed
generation in retail and wholesale electricity markets, such as through
the Mid-Atlantic Distributed Resources Initiative, the Midwest
Distributed Resources Initiative, the Pacific Northwest Distributed
Resources Project, the New England Demand Response Initiative, and the
2006 National Action Plan for Energy Efficiency.
Regardless, FPA section 216(a) requires the Department to conduct a
congestion study every three years, and upon completion of such a
study, to issue a report or reports in which it determines whether or
not to designate one or more National Corridors. FPA section 216(a)
does not grant the Department any other authorities or options.
Therefore, requests that the Department initiate other regulatory
activities are beyond the scope of these proceedings.
Further, the Department disagrees that designation of a National
Corridor limits or discourages non-transmission solutions (including
conservation, energy efficiency, and distributed generation) to
congestion or constraint problems. As discussed in Section I.A above,
the Department sees no reason to conclude that a National Corridor
designation would either prejudice State or Federal decision processes
against non-transmission solutions or discourage market participants
from pursuing such solutions.
The only ``benefit'' that a National Corridor designation confers
upon sponsors of proposed transmission projects is the provision of a
potential Federal forum for review. The existence of this procedural
option could well result in outcomes that differ from those that would
result in its absence. Thus, the end result could be the additional or
earlier construction of transmission. However, the fact that one
process may produce a different result than another is not proof that
the process is skewed in favor of a particular substantive result. For
example, allowing applicants to appeal agency decisions in court can
produce different outcomes than a system without a judicial right of
appeal, but the existence of such a right does not constitute a bias.
The Department has no reason to believe that designation of National
Corridors will result in transmission projects supplanting superior
non-transmission solutions.
As many commenters have noted, FPA section 216(a) does not mandate
the designation of any National Corridors; the statute states that the
Department ``may'' designate a National Corridor. As explained further
in Sections II and III below, the Department has concluded that in the
case of the Mid-Atlantic Critical Congestion Area, the reliability of
the supply of electricity to the political capital and to a key
financial center of this Nation is at some risk; in the case of the
Southern California Critical Congestion Area, a large and populous
portion of one State faces threats to reliability while an adjacent
State says that its generation resources should be reserved for the
benefit of its residents. While the statute does grant the Department
discretion, the Department believes that withholding the opportunity
for a Federal safety net in the circumstances presented would be
inconsistent with the intent of FPA section 216(a).
[[Page 56999]]
b. Comments on the Merits of Specific Transmission Projects
Summary of Comments
Most of the written comments as well as most of the oral statements
made at the Department's public meetings came from individuals who
indicated that they live or own property near the routes of particular
proposed transmission projects that would be within the draft National
Corridors. Many of these individuals commented on the adverse effects
that approval of these particular transmission projects would have on
them.\40\ Some of these individuals acknowledged that designation of a
National Corridor is not the same as approving a specific transmission
project. Nonetheless, they argued that designation of the draft
National Corridors would increase the chances that these particular
transmission projects would be approved, and, thus, consideration of
the merits of those particular lines in this proceeding is warranted.
For example, Cynthia Ridout commented:
---------------------------------------------------------------------------
\40\ See, e.g., comments of Kathleen Yasas (``I live along the
route that has been proposed by New York Regional Interconnect, Inc.
(NYRI) for a 400,000-volt direct current power line. This foreign-
owned project would bisect numerous communities, undermine our
already fragile economy, wreak havoc on our environment and raise
electric rates while delivering no benefits.''), Charles Elmes (``If
this [NYRI] line were to go through my property, it would take a
line through my farm about 6,000 feet long right through the middle
of my polo fields, essentially putting me out of business and
rendering the rest of my farm practically useless.''), Fred and
Debra Burnside (``I protest Allegheny Energy's Trans-Allegheny
Interstate Line. The line would run through my property and we only
own 1 acre. I fear it would reduce the value of my property. * *
*''), Janie Ricciuti (``We live within 600 ft of the proposed
APTrail. My husband served his country in Vietnam, he has CTCL from
Agent Orange Exposure. These towers are a death sentence for
him.''), Vanessa Mueller (``I would like to go on record as saying I
am opposed to Dominion's proposal to place power lines through this
area.''), Linda Rose (``We are opposed to Dominion VA Power's
attempted desecration of our local countryside. * * *''), Teresa
Barker (``I would like to express my opposition to the Sunrise
Powerlink * * *. The visual impacts will create a scar on our
landscape that will endure for generations.''), and Alison Law-
Mathisen (``The City of Los Angeles, under the guise of the `Green
Path Project,' is targeting many communities with blight * * *'');
see also statement of Jay Biba at June 12, 2007, Rochester, NY
public meeting, and statement of Terry Simmons at June 13, 2007,
Pittsburgh, PA public meeting.
My home is directly in the path of a proposed 500 kV
transmission line in Southwest PA. I speak today to defend that
home. The PA PUC is currently examining the proposal for the line,
and may yet deny permission for it to be built. This careful
investigation is the protection offered me as a citizen of PA. The
looming danger for me, though, is the threat of NIETC designation.
My fear is that private for-profit companies view the NIETC as a
carte blanche to quickly gain approval for and build transmission
lines to reap enormous profits.\41\
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\41\ See also comments of Eugene and Kristin Gulland, (``By
granting the designation, DOE would make a de facto endorsement of
the [Dominion's/Allegheny's] preferred pathway * * *'') and Kate
Severinsen (``Corridor designation allows NYRI to complete the state
Public Service Commission's review process knowing the federal
government can and will say 'yes' even if the State of New York says
`no' to it.'').
Numerous elected officials, environmental organizations, and other
groups raised similar objections to specific proposed transmission
projects.\42\
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\42\ See, e.g., comments of U.S. Rep. Hall, Chenango County Farm
Bureau, City of Paris, New York, and Communities United for Sensible
Power.
---------------------------------------------------------------------------
A number of other commenters described the alleged benefits of
specific proposed transmission projects that would be within the draft
National Corridors.\43\
---------------------------------------------------------------------------
\43\ See, e.g., comments of San Diego Gas and Electric (SDG&E),
New York Regional Interconnect Inc. (NYRI), Allegheny Energy, Inc.
(Allegheny), American Electric Power (AEP), and the California
Chamber of Commerce.
---------------------------------------------------------------------------
DOE response
As the Department stated in the May 7 Notice and as explained
further in Section I.A above, designation of a National Corridor is not
a siting decision, nor does such designation constitute approval or
disapproval, or endorsement or rejection of any transmission project.
The Department neither supports nor opposes any of the particular
transmission projects that have been proposed within the draft National
Corridors; indeed, the Department has not evaluated the merits of the
design or route of any specific proposed transmission project,
including whether any specific transmission project would meet the FPA
section 216(b)(2)-(6) criteria for issuance of a FERC permit. The
boundaries of the National Corridors being designated today are not
based on any proposed transmission projects.
The existence of a National Corridor designation does not mean that
any transmission project within that National Corridor will ultimately
be approved, let alone approved exactly as proposed by the project
sponsor. As discussed in Section I.A above, if FERC jurisdiction were
triggered, FERC could issue a permit only if all of the following
conditions are met: The facilities will be used for the transmission of
electric energy in interstate commerce; the project is consistent with
the public interest; the project will significantly reduce congestion
in interstate commerce and protect or benefit consumers; the project is
consistent with national energy policy and will enhance energy
independence; and the project maximizes, to the extent reasonable and
economical, the transmission capabilities of existing towers or
structures. FPA sec. 216(b)(2)-(6); 16 U.S.C. 824p(b)(2)-(6). FERC has
issued regulations governing the process it will follow under FPA
section 216(b). These regulations provide that if FERC jurisdiction
under FPA section 216(b) were triggered, FERC would conduct an
evaluation of the reasonably foreseeable effects of transmission
construction, including an analysis of alternative routes and
mitigation options. Based on that analysis, FERC has the authority to
approve the application, deny the application, or approve the
application with modifications.\44\
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\44\ FERC's experience in siting interstate natural gas
pipelines demonstrates the latitude that FERC possesses to modify
applications for energy infrastructure construction. FERC has
processed many applications to construct natural gas pipelines and,
where such applications have been approved, the final route has
almost always been different from that proposed by the project
sponsor. See, e.g., Millenium Pipeline Co., L.P., 97 FERC ] 61,292
(2001) (ordering developer to negotiate with elected officials and
interested parties and citizens to work toward an agreement on an
alternate route through Mount Vernon, NY); and Greenbrier Pipeline
Co., LLC, 103 FERC ] 61,024 (2003) (authorizing construction subject
to 47 different environmental conditions, including a major route
alternative and four route variations).
---------------------------------------------------------------------------
Determination of whether and where to site transmission facilities
raises important and difficult issues, the resolution of which is of
especially critical importance to the people who live and work near
those facilities. However, the pros and cons of any particular proposed
transmission project are not germane to the Department's determination
under FPA section 216(a) of whether consumers are being adversely
affected by constraints or congestion such that National Corridor
designation is appropriate.
c. Designation in the Absence of Current Congestion
Summary of Comments
A few commenters, including the Organization of MISO States (OMS),
the National Association of Regulatory Utility Commissioners (NARUC),
the Ohio Power Siting Board (OH Siting Board), the Michigan Public
Service Commission (MiPSC), and Communities Against Regional
Interconnect (CARI), expressed concern about the Department's statement
in the May 7 notice that the Secretary has discretion to designate a
National Corridor in the case of a constraint that is hindering the
development of generation that would be beneficial to consumers without
demonstrating present congestion.
[[Page 57000]]
These commenters argued that the Department's position appears
inconsistent with the plain language and legislative intent of FPA
section 216(a)(2). NARUC asked that the Department clarify how
constraints or congestion that adversely affects consumers can be
``experienced,'' as required by the statute, if there is not yet
generation that constrains or congests the system. OMS requests that
the DOE reconsider its position or refrain from making these and
similar findings in its final order on the two draft National
Corridors. OH Siting Board states that DOE should reserve the issue
regarding its authority to designate National Corridors for Conditional
Congestion Areas for a future time.
DOE Response
The May 7 notice addressed the question of designating a National
Corridor in the absence of current congestion in response to
conflicting comments we received on the Congestion Study. Some
commenters on the Congestion Study asked the Department to clarify that
it was not foreclosing the possibility of designating National
Corridors for Conditional Congestion Areas before the expected
generation was developed; others argued that no such designations were
permissible because the statute requires a showing that an area is
currently experiencing congestion adversely affecting consumers. In the
May 7 notice, we observed that there is no generally accepted
understanding of what constitutes a ``geographic area experiencing
electric energy transmission constraints or congestion that adversely
affects consumers,'' and the phrase, as used in the statute, is
ambiguous. We noted that one way in which constraints can adversely
affect consumers is by causing congestion that in turn adversely
affects consumers. However, we also noted that if Congress had intended
to limit the Secretary's designation authority over constraints to
cases where constraints are currently causing congestion, then there
would have been no need for the statutory language to refer to
congestion or constraints. Further, we agreed with those commenters who
argued that the total absence of a line connecting two nodes can be
just as, if not more, limiting to consumers than the presence of a line
that is operating at capacity and, therefore, that ``constraint''
includes the absence of transmission facilities between two or more
nodes. Thus, we stated that the statute does not appear to foreclose
the possibility of National Corridor designation in the absence of
current congestion, so long as a constraint, including the absence of a
transmission line, is demonstrably hindering the development of
desirable generation. We noted that this interpretation would not only
give meaning to all terms in the statutory phrase ``constraints or
congestion that adversely affects consumers,'' it would also be
consistent with the statutory reference to ``experiencing'' a
constraint. Under this interpretation, any National Corridor
designation would necessitate a showing that a current lack of capacity
exists and that such lack of capacity is having a current, tangible
effect--generation that would be of benefit to the general public
including consumers, is actually being hindered by the lack of capacity
to bring it to market. Finally, we noted that we were leaving open the
question of the type of information that would be required to
demonstrate that a constraint actually is hindering the development or
delivery of a generation source and that development or delivery of
such generation source would be beneficial to consumers.
The Department is not relying on this interpretation of its
statutory authority for either of the two designations being made in
this report. Despite the characterizations of some commenters, in the
case of both the Mid-Atlantic Area National Corridor and the Southwest
Area National Corridor, the Department's assertion of authority is
based on the conclusion that congestion adversely affecting consumers
is currently being experienced. Neither of these two designations
relies on any interpretation of the scope of the Department's authority
in the absence of current congestion. If and when the Department
considers making a National Corridor designation in the absence of
current congestion, it intends to provide such designation in draft
form for public comment and to consult with all affected States prior
to making any final decision. At that time, interested parties will
have a full opportunity to raise any concerns they have about the
adequacy of the Department's demonstration of authority. Further
clarification is beyond the scope of these proceedings.
d. FERC's Process
Summary of Comments
Some commenters raise objections to FERC's process for reviewing
permit applications under FPA section 216(b). These commenters dispute
FERC's interpretation of FPA section 216(b)(1)(C)(i) allowing it to
exercise jurisdiction where a State has denied, as opposed to simply
delayed action on, an application.\45\ NJDEP expresses concern about
how FERC will interpret the one-year timeframe for State action under
FPA section 216(b)(1)(C)(i). PaDEP expresses concern that FERC's review
will be narrowly restricted to the merits of a proposed line rather
than examining whether generation or demand resources can better
satisfy the underlying needs. PaDEP also expressed concern that
approval by one State of a portion of a multi-state project may
prejudice FERC's review.
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\45\ See, e.g., comments of the Delaware Department of Natural
Resources and Environmental Control (DeDNR) and the Public Utilities
Commission of Nevada and the Nevada State Office of Energy (Nevada
Agencies).
---------------------------------------------------------------------------
On the other hand, National Grid USA (National Grid) states that
FERC's siting rules include a substantial measure of deference to
existing regional, State, and local planning and siting processes.
DOE Response
Congress specifically granted to FERC, rather than to DOE, the
responsibility of reviewing any permit applications under FPA section
216(b). As required by FPA section 216(c)(2), FERC has issued
regulations governing the process it will follow when reviewing any
such applications. These regulations are being challenged in court.\46\
Any allegations of inadequacy or inconsistency with statutory intent
must be addressed there and are beyond the scope of these proceedings.
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\46\ See Piedmont Environmental Council, et al. v. FERC, 4th
Cir., Nos. 07-1651, et al.
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II. Mid-Atlantic Area National Corridor (Docket No. 2007-OE-01)
A. Procedural Matters
1. Parties to This Proceeding
The May 7 notice provided instructions on how to provide comments
and how to become a party to the proceeding in this docket. Consistent
with those instructions, the Department is granting party status in
this docket to all persons who either: (1) Filed comments
electronically at http://nietc.anl.gov on or before July 6, 2007; (2)
mailed written comments marked ``Attn: Docket No. 2007-OE-01'' to the
Office of Electricity Delivery and Energy Reliability, OE-20, U.S.
Department of Energy, 1000 Independence Avenue, SW., Washington, DC
20585, that were received on or before July 6, 2007; or (3) hand-
delivered written comments marked ``Attn: Docket No. 2007-OE-01'' at
one of the public meetings.
[[Page 57001]]
2. Fairness of the Designation Process
Summary of Comments
Many commenters, including numerous individuals, argued that the
Department had failed to provide adequate opportunity for the public to
review and comment on the draft National Corridors. For example, John
Balasko argued that the Department should have done more to inform and
involve the general public because, ``If this corridor is adopted, no
longer will landowners within the corridor be free to make sound land
management decisions because the hammer of the Federal Energy
Regulatory Commission and perhaps federal eminent domain is looming in
the background.'' CARI contends that designation of the draft Mid-
Atlantic Area National Corridor would be a ``rule'' subject to the
notice and comment rulemaking requirements of the Administrative
Procedure Act, 5 U.S.C. 553 (APA). Many commenters argued that more
public meetings should have been held and that they should have been
held along the routes of various proposed transmission projects within
the draft National Corridors.\47\ Numerous commenters requested an
extension of the comment period. In particular, commenters argued that
the June 7 errata published by the Department warranted an extension of
the comment period. Numerous individuals and organizations asserted
that the Department had failed to reveal the data underlying the draft
designations.\48\
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\47\ See, e.g., comments of Karen Smolar, Rand Carter, Dale
Roberts, U.S. Sen. Clinton, and NY Rep. Destito.
\48\ See, e.g., comments of Greene County, Rick Layton, and
Barbara Kessinger.
---------------------------------------------------------------------------
Many commenters, including a number of individuals, alleged that
the draft National Corridor designations were the result of improper
influence by transmission companies.\49\ Some commenters complained
that instead of conducting an independent study of congestion, the
Department improperly relied on data and analyses from utilities or
others with a vested interest in transmission expansion.\50\
---------------------------------------------------------------------------
\49\ See, e.g., comments of Diane Eisenberg (``The proposals
smack of cronyism, a lack of transparency, and improper attempts by
secretive private interests to influence national energy policy not
for the public benefit but for their own profit.'').
\50\ See, e.g., comments of Toll Brothers, Inc. (Toll Bros.) and
Jeffrey Brown.
---------------------------------------------------------------------------
DOE Response
The Department concludes that its process has been fair, open, and
transparent, and that it has provided ample opportunity for public
comment. DOE does not agree that the designation of National Corridors
is subject to the APA's informal rulemaking provisions. FPA section
216(a) does not expressly require rulemaking, and, in DOE's view, the
designation of National Corridors constitutes informal adjudication
under the APA. Absent a statutory or other legal requirement providing
otherwise, the choice whether to use rulemaking or adjudication in a
particular matter is the administrative agency's to make. The APA
defines ``adjudication'' as ``an agency process for the formulation of
an order.'' 5 U.S.C. 551(7). An order is ``the whole or a part of a
final disposition, whether affirmative, negative, injunctive, or
declaratory in form, of an agency in a matter other than rule making
but including licensing.'' 5 U.S.C. 551(6). A report designating a
National Corridor is the final disposition in declaratory form of how
DOE chooses to address the results of the study it must conduct under
FPA section 216(a), and, therefore, is an informal adjudication for APA
purposes.
Regardless of the label one applies to the designation of National
Corridors, DOE has employed procedures that satisfy all applicable
procedural requirements. DOE complied with FPA section 216(a)(2) by
soliciting comments on the Congestion Study through a notice of
availability and request for comments published on August 8, 2006 (71
FR 45047). DOE allowed 60 days for submission of public comments on the
Congestion Study. After considering the comments received pursuant to
that solicitation, DOE published the May 7 notice and provided a 60-day
public comment opportunity on draft National Corridor designations. The
May 7 notice stated that public comments would be considered prior to
DOE issuing a report as required by FPA section 216(a)(2). DOE provided
this comment opportunity even though FPA section 216(a) does not
require DOE to solicit comments on either the report or on any proposed
or draft National Corridor designations. FPA section 216(a) only
requires that DOE solicit comments on the study, upon which the report
and any designation of National Corridors are based.
In addition, the Department held a series of public meetings on the
draft National Corridors. Although the Department was not required to
hold any public meetings, it announced in the May 7 notice that it
would hold three public meetings. In response to numerous requests for
additional meetings, the Department held four more meetings. With
regard to complaints about the Department's failure to schedule
meetings along the routes of various proposed transmission projects,
the Department notes that, as discussed in Section I.A above,
designation of a National Corridor is not a siting decision, nor does
such designation constitute approval or endorsement of any transmission
project.
While some commenters argue that the June 7 errata warranted
extension of the comment period, the Department notes that the counties
inadvertently omitted from the narrative list were included in the
previously available map of the draft Mid-Atlantic Area National
Corridor. Further, given that the designations were issued in draft and
the Department was soliciting comment on those drafts, including
comment on its delineation of the boundaries of the draft National
Corridors, persons concerned about counties in the general vicinity of
the draft National Corridors were on notice on May 7, 2007, of the need
to provide comments by July 6, 2007.
The Department believes it has provided adequate disclosure of
information. The May 7 notice identified the specific data the
Department relied on to: Establish the existence of congestion
adversely affecting consumers, determine whether the Secretary should
exercise his discretion to designate a National Corridor, and delineate
the specific boundaries of the draft National Corridors. Those data
included memoranda that the Department has made available on its Web
site. In addition, as noted in the May 7 notice, the non-proprietary
data relied on in the Congestion Study has been available on the
Department's Web site since September 27, 2006.
The Department did not rely solely on data and information from any
single source or category of sources. While conducting the Congestion
Study, the Department contacted a wide range of stakeholders for
publicly available and current data, and then, through the notice of
inquiry and technical conference, opened the call for data to all
entities. The Department then performed its own review of the
information provided. All interested persons had an opportunity to
comment on the May 7 notice, and the Department has considered all
timely filed comments.
3. Adequacy of State Consultation
Summary of Comments
Some commenters asserted that the Department has failed to
adequately consult with affected States. For example, Virginia Governor
Kaine states
[[Page 57002]]
that the Congestion Study was performed without consultation with
Virginia, contrary to FPA section 216(a)(1). Pennsylvania Senator Casey
asserts that States were not adequately consulted. The Pennsylvania
Land Trust Association argued that various expressions of opposition to
the draft Mid-Atlantic Area National Corridor from elected officials
from Pennsylvania prove that the Department has failed to consult.\51\
CARI states that DOE has failed to consult adequately with New York.
---------------------------------------------------------------------------
\51\ See also comments of Energy Conservation Council of
Pennsylvania (ECCP) and statement of Robert Lazaro at May 15, 2007,
Arlington, VA public meeting.
---------------------------------------------------------------------------
DOE Response
The Department is cognizant of its responsibility to consult with
affected States and believes that it has fulfilled this responsibility.
As described in the May 7 notice, there are practical difficulties in
conducting the level of consultation that some may prefer in the
context of a study with the magnitude of the Congestion Study within
the statutorily mandated deadlines. However, the Department believes
that its consultation with States, as documented in the May 7 notice,
satisfied the requirements of FPA section 216(a)(1). Moreover, in
recognition of the importance of National Corridor designation to
States, upon issuance of the May 7 notice, the Department engaged in
additional consultation with each of the States within the draft
National Corridors and the District of Columbia, as documented in
Section I.C above.
The Department recognizes the value and importance of State
consultation. The Department has sought to ensure that it understands
the concerns of the States within the Mid-Atlantic Area National
Corridor and the Southwest Area National Corridor; that it has
accommodated those concerns where possible consistent with its
obligations under FPA section 216(a); and that it has fully explained
its position where it concludes it cannot accommodate those concerns.
B. Overall Comments on the Draft Mid-Atlantic Area National Corridor
The Department received comments from numerous State officials and
agencies generally opposed to the Department's designation of a Mid-
Atlantic Area National Corridor. Governor Kaine opposes designation of
a National Corridor that includes the Commonwealth of Virginia.\52\ The
PaDEP, filing comments on behalf of Governor Rendell, opposes
designation of the draft Mid-Atlantic Area National Corridor as
premature; the Pennsylvania Public Utilities Commission (PaPUC) also
filed comments opposing designation.\53\ Maryland Governor O'Malley
states that the Department should set aside the draft Mid-Atlantic Area
National Corridor and focus on other ways to address the region's
energy problems. DeDNR, filing comments on behalf of Governor Miner,
opposed designation of the draft Mid-Atlantic Area National Corridor.
In addition, the Department received comments opposing designation
from: The New York Public Service Commission (NYPSC) and the New York
Department of Environmental Conservation (NYDEC); the New Jersey Board
of Public Utilities, NJDEP, and the New Jersey Department of the Public
Advocate (NJ Public Advocate); and OH Siting Board.
---------------------------------------------------------------------------
\52\ See also comments of Virginia Department of Historic
Resources.
\53\ See also comments of the Pennsylvania House of
Representatives and the Pennsylvania Senate.
---------------------------------------------------------------------------
Numerous counties and cities within the draft Mid-Atlantic Area
National Corridor filed comments opposing designation. The Department
also received comments opposing designation from hundreds of
individuals residing within the draft Mid-Atlantic Area National
Corridor but outside of the Mid-Atlantic Critical Congestion Area.
Numerous non-profit organizations also filed comments opposing
designation.\54\
---------------------------------------------------------------------------
\54\ See, e.g., comments of Piedmont Environmental Council,
CARI, NYPIRG, and Sierra Club (National).
---------------------------------------------------------------------------
The New York City Economic Development Corporation, filing comments
on behalf of the City of New York (City of New York), supports
designation of a National Corridor for New York City. PJM supports
designation of the portion of the draft Mid-Atlantic Area National
Corridor within the PJM footprint. NYISO supports designation of the
draft Mid-Atlantic Area National Corridor based on the Department's
clarifications in the May 7 notice that the designation does not
represent either an endorsement of any individual project, a
determination that new transmission construction is necessarily
required, or a repudiation of regional planning mechanisms. Numerous
utilities also filed comments supporting designation of a Mid-Atlantic
Area National Corridor.\55\
---------------------------------------------------------------------------
\55\ See, e.g., comments of AEP, National Grid, Allegheny, NYRI,
and Old Dominion Electric Cooperative (ODEC); see also comments of
Edison Electric Institute (EEI).
---------------------------------------------------------------------------
NERC filed comments stating that the ultimate designation of
National Corridors will further bolster the reliability of the grid.
NPCC expressed concern about designation of an overly narrow National
Corridor.
DOE Response
These comments in general opposition to the designation of a Mid-
Atlantic Area National Corridor are essentially opposition to the
regimen established by FPA section 216(a). As stated in Section
I.D.2(a) above, the Department has an obligation to act consistent with
the terms of FPA section 216(a) as written and enacted into law.
Objections to the terms of this provision simply do not provide a basis
for declining to implement the statute.
C. Adequacy of Showing of Congestion That Adversely Affects Consumers
Summary of Comments
Numerous commenters argued that the Department had failed to make
the showing of congestion adversely affecting consumers required in
order to designate a Mid-Atlantic Area National Corridor. Some of these
commenters took issue with the Department's position that it has the
discretion to designate the Mid-Atlantic Area National Corridor upon a
showing of the existence of persistent congestion, without further
demonstration of adverse effects on consumers. For example, NYPSC
states that DOE's interpretation is contrary to the express language of
the statute, which recognizes that transmission congestion and
constraints do not, per se, adversely affect consumers. NYPSC states
that DOE's approach renders the statutory phrase ``that adversely
affects consumers'' entirely superfluous, contrary to a fundamental
canon of statutory construction. PaPUC states that DOE has misread the
statute to give itself unlimited power to designate National Corridors
almost anywhere in the United States, since every transmission pathway
may become congested at some point in time. PaPUC states that it is not
enough for the DOE to identify the existence of chronic congestion. OMS
states that although it may be relatively easy to demonstrate that
persistent congestion is adversely affecting consumers, OMS believes
that DOE still needs to explicitly demonstrate such adverse effects
before it can designate any National Corridor.\56\
---------------------------------------------------------------------------
\56\ See also comments of MiPSC, ECCP, Consolidated Edison
Company of New York, Inc. (Con Ed), CARI, Toll Bros., and City of
Paris, NY.
---------------------------------------------------------------------------
NYPSC argues that in regions such as New York State where
competitive markets have been established, higher prices for
transmission do not always
[[Page 57003]]
adversely affect consumers. NYPSC further states where the costs of
relieving congestion exceed the costs of the congestion itself,
consumers are not adversely affected by such congestion because such
congestion reflects the most economically efficient operation of the
grid.\57\ Erica Wiley states that areas of congestion or higher pricing
are a result of natural market forces, thus, one would expect New York
City's cost of energy to be higher than that in the Ohio River Valley,
much like real estate prices. Higher prices, this commenter argued, do
not adversely affect consumers, but rather have led to innovation and
conservation.
---------------------------------------------------------------------------
\57\ See also comments of Con Ed.
---------------------------------------------------------------------------
Some commenters argued that the Department's analysis relies on
inflated estimates of future congestion. A few commenters argued that
the Department had failed to consider that greenhouse gas regulation
will increase the price of coal-fired generation, and thereby reduce
congestion between areas of coal generation and load centers.\58\ Con
Ed argues that the Department should model new generation capacity in
the eastern portion of the PJM footprint resulting from the new
Reliability Pricing Model capacity market or other generation now
expected to be in service after 2011. Con Ed states that using average
losses instead of marginal losses also can serve to artificially
inflate projections of congestion. Con Ed further states that the three
cost curves for Upstate East, Upstate West, and Downstate New York used
in the Congestion Study modeling should have been combined into one
curve and the resulting energy prices compared to energy prices with
constraints. PaPUC states that rather than relying solely upon a static
direct current flow analysis, DOE should have performed dynamic
analysis of alternating current flows, as is used in actual
transmission grid planning models. CARI argues that the Department has
not adequately considered data from NYISO's most recent Reliability
Needs Assessment that suggests that future constraints and congestion
will not be as severe as the Congestion Study modeling predicts. Some
commenters argue that the Department failed to adequately consider the
effects of ongoing demand reduction efforts on congestion, including
New York Governor Spitzer's recent plan to decrease energy demand in
the State by 15 percent below forecasted load by 2015.\59\
---------------------------------------------------------------------------
\58\ See, e.g., comments of Sierra Club (National) and Con Ed.
\59\ See, e.g., comments of CARI, NYPRIG, and American Council
for an Energy-Efficient Economy.
---------------------------------------------------------------------------
Other commenters supported the Department's showing of congestion
adversely affecting consumers in the Mid-Atlantic Critical Congestion
Area. For example, PJM states that persistent and growing transmission
congestion such as that experienced in the Mid-Atlantic Critical
Congestion Area is a precursor to threats to reliability of service in
the near- and mid-term future.\60\ NYISO states that as a general rule,
the Department correctly identified those areas of New York State lying
along its major transmission pathways that historically have
experienced significant congestion.\61\
---------------------------------------------------------------------------
\60\ See also comments of WIRES.
\61\ See also comments of National Grid.
---------------------------------------------------------------------------
DOE Response
The Department concludes that it has sufficiently demonstrated and
found the existence of congestion that adversely affects consumers in
the Mid-Atlantic Critical Congestion Area. FPA section 216(a)(2) does
not define the term ``congestion that adversely affects consumers,''
nor is there any dictionary definition or common usage of that phrase
within the realm of electric system operations to clarify its meaning.
The considerations listed in FPA section 216(a)(4), which authorize the
Department to consider factors such as diversification of supply and
energy independence when determining whether to designate a National
Corridor, indicate that Congress intended the Department to consider
adverse effects on consumers beyond increases in the delivered price of
power. However, the statute provides no further clarification of the
type or magnitude of adverse effect intended. The statute also does not
dictate any particular method of determining the existence of
congestion adversely affecting consumers, except that such
determination is to be based on the study conducted pursuant to FPA
section 216(a)(1). In sum, the statute is ambiguous, and leaves to
agency discretion, as to when congestion can be said to adversely
affect consumers.
Nothing in the statute requires that the Department conduct a
separate explicit empirical analysis of the specific adverse effects of
an instance of congestion before designating a National Corridor. FPA
section 216(a)(1) describes the congestion study on which any
designation of a National Corridor must be based only as a ``study of
electric transmission congestion.'' Similarly the term ``congestion
that adversely affects consumers'' in FPA section 216(a)(2) does not
dictate a two-step analysis--first to determine the level of congestion
and second to determine the specific resulting adverse effects--before
a National Corridor designation may be made.
In the Congestion Study, the Department defined ``congestion'' as
the condition that occurs when transmission capacity is not sufficient
to enable safe delivery of all scheduled or desired wholesale
electricity transfers simultaneously. This definition was based on
common usage within electric system operations \62\ and spurred little
dissent among commenters on the Congestion Study. Under this
definition, determining and documenting the specific adverse effects
caused by specific instances of congestion could necessitate
identification of all the scheduled or desired power transactions that
were denied transmission service, all the alternative power
transactions that occurred as a result of the congestion, all the
parties to both sets of transactions, all the terms of both sets of
transactions, and all the sources of power for both sets of
transactions. Obtaining and analyzing such information for each area
under evaluation for potential National Corridor designation, assuming
all such information were accessible, would be a daunting task,
particularly in the context of a triennial study that must already
identify and analyze the existence of congestion itself throughout 47
States and the District of Columbia. Thus, given the practical
complications of conducting in each case a specific analysis of the
specific adverse effects caused by the specific instances of
congestion, the Department considered whether it was possible to
identify a class of congestion that necessarily adversely affects
consumers.
---------------------------------------------------------------------------
\62\ See, e.g., California Independent System Operator,
Conformed Simplified and Reorganized Tariff, App. A, Master
Definitions Supplement (April 6, 2007) (``Congestion--A condition
that occurs when there is insufficient Available Transfer Capacity
to implement all Preferred Schedules simultaneously or, in real
time, to serve all Generation and Demand.''); and Southwest Power
Pool, Glossary and Acronyms, http://www.spp.org/glossary.asp?letter=C
(``Congestion is a condition that occurs when
insufficient transfer capacity is available to implement all of the
preferred schedules for electricity transmission simultaneously.'').
---------------------------------------------------------------------------
Given the definition of ``congestion,'' any congestion prevents
some users of the transmission grid from completing their preferred
power transactions. These users include wholesale industrial consumers
of power as well as load-serving entities buying power on behalf of
retail consumers, all of whom are prevented by congestion from
obtaining delivery of desired quantities of electricity from desired
sources.
[[Page 57004]]
Thus, any congestion on a line necessarily interferes with the choices
of those who wish to use that line on their own or their customers'
behalf. Whenever there is congestion on a transmission path, there
simply is not enough transmission capacity to accommodate all the
desired power transactions, and some sort of rationing of available
capacity is needed. In areas with organized electricity markets, this
rationing generally occurs through a pre-established economic
mechanism, such as an LMP-based system designed to allocate the limited
capacity to the users who value it the most. In areas of the country
without organized markets, the rationing may involve the transmission
provider denying requests for transmission service, adjusting
schedules, or in some cases making pro rata curtailments in real time.
Regardless of how the rationing is resolved, however, one thing remains
true: Congestion results in some users of the transmission system being
denied the benefit of their preferred transactions.
Interference with customers' preferred power transactions poses
numerous potential adverse effects on consumers. One reason for
choosing a particular power seller is commodity price. Electricity
buyers frequently seek power from sellers who offer the lowest power
price. When congestion prevents those transactions from being
consummated, more expensive power must be purchased, which adversely
affects consumers. However, congestion can result in the loss of
benefits to consumers other than just low commodity prices. A seller
may offer contract terms other than lower commodity price that benefit
consumers, including better credit terms, greater long-term pricing
certainty, or greater flexibility in terminating contracts. A seller
may offer consumer benefits in terms of fuel source. For example, a
seller may offer power from a fuel source that would increase diversity
or energy independence, both of which protect consumers from unforeseen
events and market volatility related to fuel availability. Or a seller
may offer consumers the ability to buy renewable power, which offers
environmental benefits to consumers. A seller may offer consumer
benefits simply by being unaffiliated with a load-serving entity's
primary electricity supplier, which protects consumers from being
completely dependent on a single supplier. While analysis of why the
transactions thwarted by a particular instance of congestion were in
fact preferred by customers would reveal which of these specific
consumer benefits had been forgone, no such analysis is needed to
conclude that congestion thwarts customer choice resulting in the loss
of one or more of these benefits. Finally, congestion results in parts
of the transmission system being so heavily loaded that grid operators
have fewer options for dealing with adverse circumstances or
unanticipated events. Therefore, as congestion increases consumers are
exposed to increased risk of blackouts, forced interruptions of
service, or other grid-related disruptions.
Some commenters suggest that congestion only adversely affects
consumers if the costs of relieving the congestion are less than the
costs of the congestion itself. As discussed above, we conclude that
Congress intended the Department to consider adverse effects on
consumers beyond increases in the delivered price of power, some of
which effects may not be easily monetized. Further, designation of a
National Corridor does not dictate how or even whether to address a
particular instance of congestion. Therefore, the Department believes
that restricting the term ``congestion that adversely affects
consumers'' to congestion that can be cost-effectively relieved is an
overly narrow reading of the statute. Some commenters suggest that
congestion can actually benefit consumers by spurring energy efficiency
or the adoption of innovative technologies. The Department believes,
however, that their comments speak not to any true benefits of
congestion itself, but rather to the benefits of congestion management
systems that put a price on congestion, thus making it easier for
market participants to evaluate how best to address that congestion.
While the Department concludes that, in theory, any congestion
adversely affects at least some consumers, it is not adopting that
interpretation of the term ``congestion that adversely affects
consumers.'' Instead, the Department recognizes that isolated instances
of congestion can arise on any transmission path, and such events are
more in the nature of occasional inconveniences than a significant
adverse effect on consumers. However, as congestion becomes more
frequent on a particular path, the occasional inconveniences start to
accumulate until, at the point where congestion becomes persistent,
customers find that they must recurrently resort to less desirable
power sources. In fact, as customers lose the ability to access
preferred suppliers on a firm basis, they may need to make permanent
arrangements with less desirable suppliers, all to the detriment of
consumers.
Further, the Department recognizes that congestion remedies are not
free. As discussed above, the identification of congestion adversely
affecting consumers is not a determination of whether or how a
particular instance of congestion should be addressed. It is, however,
the first step in the process of determining whether to provide a
potential Federal forum that would examine whether addressing
congestion through transmission expansion is in the public interest.
Just as isolated or infrequent instances of congestion do not usually
cause significant adverse effects to consumers, they also do not
usually warrant consideration of structural changes, such as
transmission expansion, increased demand response, or siting of
additional generation. The ``solution'' to such transient instances of
congestion is short-term, temporary adjustments, such as redispatch.
Thus, when electric system planners consider whether structural changes
are needed in the system, they typically start by looking for recurrent
patterns of congestion and calculating the number of hours per year
that a given transmission line or path is congested.
The Department emphasizes that while a finding of congestion that
adversely affects consumers provides the Department with the discretion
to designate a National Corridor, it does not mean that the Department
will choose to exercise that discretion in all instances. Before making
any designation of a National Corridor, the Department will consider
whether such designation is in the national interest, based on the
totality of the information developed, taking into account relevant
considerations, including the considerations identified in FPA section
216(a)(4), as appropriate.
The Department concludes, based on its technical expertise and
policy judgment, that it is reasonable to interpret the phrase
``congestion that adversely affects consumers'' to include congestion
that is persistent. Thus, the Department believes that FPA section
216(a) gives the Secretary sufficient authority and discretion to
designate the Mid-Atlantic Area National Corridor upon a showing of the
existence of persistent congestion.
The Department further concludes that persistent congestion exists
into and within the Mid-Atlantic Critical Congestion Area. Some
commenters question assumptions made in the modeling performed in the
Congestion Study, and others suggest that the modeling be performed
again to
[[Page 57005]]
incorporate additional analysis or more recent data. All of these
comments concern the accuracy of projections of future levels of
congestion; however, the analysis in the Congestion Study and the May 7
notice was not limited to estimating future levels of congestion. The
Mid-Atlantic Area National Corridor is based on well-documented
existing constraints causing patterns of congestion that have persisted
over a number of years.
For example, Tables VIII-4 and VIII-5 in the May 7 notice
identified 25 different transmission elements in the PJM and NYISO
footprints that have been constrained more than five percent of the
time from 2004 through 2006.\63\ Some of these elements were
constrained much more than five percent of the time: Bedington-Black
Oak was constrained 52 percent and 45 percent of the time in the Day-
Ahead market in 2005 and 2006 respectively; the Kammer 765/500
transformer was constrained 39 percent and 23 percent of the time in
the Day-Ahead market in 2005 and 2006 respectively; Rainey to Vernon
345 kV was constrained 36 percent and 32 percent of the time in the
Day-Ahead market in 2005 and 2006 respectively; and Dun-Shore Road was
constrained 71 percent and 89 percent of the time in the Day-Ahead
market in 2005 and 2006 respectively. While some commenters question
how much and how quickly congestion in the Mid-Atlantic Critical
Congestion Area will increase or decrease, and how much and how quickly
various efforts will reduce the congestion, no one seriously questions
that this congestion exists now and that it will continue for some
period of time.\64\
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\63\ Given the large daily and seasonal swings in the level of
demand and the associated changes in the patterns of generation
dispatch, congestion on a line is significant even if the line is
not congested most of the hours in the year. For example, although
Path 15 in California was congested in only 11.9 percent of the
total hours in the Day-Ahead market and 4.7 percent in the Hour-
Ahead market in 2004 (see CAISO, 2004 Annual Report on Market Issues
and Performance, table 5.2 (April 2005)), upgrades implemented in
December 2004 are estimated to save consumers hundreds of millions
of dollars (see CAISO, Potential Economic Benefits to California
Load from Expanding Path 15-Year 2005 Prospect (Sept. 24, 2001)).
Congestion does not occur until a line is already loaded to its
safety limit; this means that in general congestion tends to occur
when demand is relatively strong, which happens only during a
portion of the day or year.
\64\ Further, as discussed in Section I.A above, FERC may only
issue a permit if the applicant has shown that its project will
significantly reduce congestion, and FERC has interpreted this to
mean that an applicant must make a showing that its project will
significantly reduce the congestion identified by DOE. Thus, if
congestion into or within the Mid-Atlantic Critical Congestion Area
were to be resolved before the issuance of a FERC permit, it would
be difficult for the sponsor of a transmission project to make such
a showing.
---------------------------------------------------------------------------
Moreover, while the Department concludes that the statute
authorizes the designation of the Mid-Atlantic Area National Corridor
upon the Department's finding of the existence of persistent
congestion, the Department nevertheless has provided additional
documentation. In the context of explaining the considerations that led
to the draft designation of the Mid-Atlantic Area National Corridor,
the Department documented that congestion is causing consumers in the
Mid-Atlantic Critical Congestion Area to face consistently higher
electricity prices; that congestion poses threats to the reliability of
electricity supply to consumers in the Mid-Atlantic Critical Congestion
Area; and that congestion limits supply diversity and energy
independence for Mid-Atlantic Critical Congestion Area consumers.\65\
For example, the May 7 notice explained that PJM has determined that
unless constraints into the Baltimore-Washington-Northern Virginia area
are mitigated, existing 500 kV transmission facilities serving that
area will become overloaded by 2011 in violation of NERC and PJM
reliability and planning criteria, and unless constraints into northern
New Jersey are mitigated, that area faces violations of NERC and PJM
reliability and planning criteria by 2014. The May 7 notice further
explained that NYISO has determined that constraints limiting delivery
of electricity to southeast New York pose a threat to reliability by
2011.
---------------------------------------------------------------------------
\65\ See May 7 notice, Section VIII.C.1-3. NJ Public Advocate
argues that the congestion rents calculated in the Congestion Study
exaggerate the adverse economic impacts on consumers because they
ignore the availability of transmission cost hedging instruments.
However, as explained in the May 7 notice, the Department believes
that while congestion rents are a useful indicator of the
persistence and pervasiveness of congestion, the Department is not
suggesting that such rents represent the actual monetary cost that
consumers pay specifically as a result of congestion. The May 7
notice's discussion of increased costs to consumers focused on
differences in actual power and capacity prices paid as a result of
the documented congestion, rather than projections of congestion
rents.
---------------------------------------------------------------------------
Far from simply assuming the presence of congestion that adversely
affects consumers, as some commenters allege, the Department has made a
reasoned determination that the statutory conditions triggering
discretion to designate a National Corridor for the Mid-Atlantic
Critical Congestion Area have been met.
D. Boundaries of the Mid-Atlantic Area National Corridor
Summary of Comments
Numerous commenters argued that the draft Mid-Atlantic Area
National Corridor is impermissibly broad. For example, ECCP states that
designation of an area spanning much of the Mid-Atlantic region exceeds
the Secretary's authority and the Department's expansive definition of
``corridor'' does not comport with Congress'' definition of
``corridor'' or Congress' intent in enacting FPA section 216. Upper
Delaware Preservation Coalition states that DOE exceeded its statutory
authority by disregarding the common usage of the word ``corridor''
under EPAct and drawing the boundaries of the draft Mid-Atlantic Area
National Corridor arbitrarily.\66\ Southern Environmental Law Center
(SELC) states that the definition employed by DOE in establishing
corridors under EPAct section 368 should also apply to National
Corridors designated under FPA section 216(a). Appalachian Trail
Conservancy states that the draft Mid-Atlantic Area National Corridor
is so broad as to be virtually meaningless.
---------------------------------------------------------------------------
\66\ See also comments of U.S. Sen. Casey, Pennsylvania Farm
Bureau, Piedmont Environmental Council, and numerous individuals.
---------------------------------------------------------------------------
ODEC states that a National Corridor designation that would provide
Federal backstop siting authority for any project in eastern portion of
the PJM footprint likely would be counter-productive to getting
transmission built in that region. PaPUC states that the draft Mid-
Atlantic Area National Corridor is both overly broad and overly narrow.
The draft Mid-Atlantic Area National Corridor is overly broad,
according to PaPUC, because it includes many areas that for a variety
of economic, environmental, or technical engineering reasons would be
excluded from any major transmission infrastructure project study; it
is overly narrow because the simplistic ``box'' methodology ignores the
actual topology of the existing transmission grid and excludes regions
outside the ``box'' that might be equally suitable or superior for
siting National Interest transmission infrastructure. PaPUC also
objects to the use of political boundaries that have no clear relevance
to electric infrastructure as a physical system. PaPUC suggests
defining one or more smaller National Corridors in the Mid-Atlantic
region, each with an entry point at the source, an exit point at the
load, and a congestion interface in the middle.
Numerous commenters argued that the statute requires any Mid-
Atlantic Area National Corridor to be limited to
[[Page 57006]]
the confines of the urban areas experiencing the congestion.\67\ CARI
states that if any area is to be designated in New York State, it
should be those limited portions of the existing New York transmission
system actually functioning as a transmission constraint or causing
persistent congestion that adversely affects consumers. CARI also
argues that a broad reading of the term ``geographic area experiencing
electric energy transmission capacity constraints or congestion that
adversely affects consumers'' violates the principle of statutory
construction known as the ``presumption against preemption.''
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\67\ See, e.g., comments of Karl Cehonski, Susan Morgan, and
City of Paris, New York.
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Some commenters suggested redrawing the Mid-Atlantic Area National
Corridor boundaries so as to follow existing transmission lines or
highways.\68\
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\68\ See, e.g., comments of Karen Gonzales and Laura Krauza.
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Other commenters supported the Department's approach. For example,
PJM and NYISO support the Department's source-and-sink approach. Pepco
Holdings, Inc. (PHI) states that the draft Mid-Atlantic Area National
Corridor is appropriately broad so as to encompass all necessary RTO-
approved system enhancements associated with major new transmission
solutions and to complement existing and foreseeable transmission
plans. National Grid states that the Department's approach to
establishing boundaries for the draft Mid-Atlantic Area National
Corridor is precisely the approach that accords deference to existing
regional, State, and local planning and siting authorities by
preserving the flexibility those authorities need to consider multiple
alternative solutions. EEI states that DOE has properly delineated the
draft Mid-Atlantic Area National Corridor as a general, inclusive
geographic area, and adds that if utility, State, or regional agency
staff indicate that the margins of the draft Mid-Atlantic Area National
Corridor need to be modified to encompass potential solutions, DOE
should make such modifications so that a full array of solutions can be
considered.
NPCC expressed concern that the Department's source-and-sink
approach may lead to the designation of overly narrow National
Corridors. NPCC cautions against making transmission improvements in
narrow corridors without giving sufficient attention to the possible
need for coordinated improvements in distant but related parts of the
Eastern Interconnection. NPCC points out, for example, that increasing
the west-to-east electricity flows in PJM without regard to broader
effects could exacerbate loop flows around Lake Erie. Accordingly, NPCC
recommends that DOE maintain an Interconnection-wide perspective in
making National Corridor designations and emphasize to all stakeholders
that adding more transmission capacity within a National Corridor could
exacerbate reliability problems outside the Corridor unless appropriate
and coordinated countermeasures are implemented.
DOE Response
The Department concludes that its approach to defining the
boundaries of the draft Mid-Atlantic Area National Corridor is
consistent with the statute. FPA section 216 does not explicitly define
the term ``national interest electric transmission corridor.'' FPA
section 216(a)(2) does, however, authorize the Department to designate
``any geographic area experiencing electric energy transmission
capacity constraints or congestion that adversely affects consumers''
as a National Corridor. 16 U.S.C. 824p(a)(2). ``Any geographic area''
connotes no particular shape, proportion, or size. Thus, the language
of FPA section 216(a) does not appear to limit the shape, proportion,
or size for a National Corridor.
A few commenters point to the approach being used by DOE and the
Federal land managing agencies to delineate energy right-of-way
corridors for oil, gas, and hydrogen pipelines and electricity
transmission and distribution facilities under EPAct section 368 as
evidence that the draft Mid-Atlantic Area National Corridor is too
broad to be consistent with the statute. We believe, to the contrary,
that the differences in the language and intent of FPA section 216(a)
and EPAct section 368 underscore the appropriateness of the
Department's overall approach to establishing the boundaries of the
draft Mid-Atlantic Area National Corridor.
In contrast to FPA section 216(a)(2)'s reference to ``any
geographic area,'' EPAct section 368(e) explicitly requires that ``[a]
corridor designated under this section shall, at a minimum, specify the
centerline, width, and compatible uses of the corridor.'' Congress
could have included similar language in FPA section 216(a) had it
intended the Department to use the same approach to delineating
National Corridors, but it did not. The plain language of EPAct section
368(e) limits its applicability to corridors ``designated under this
section.'' Further, despite the assertions of some commenters, the
Department sees no reason to conclude that the language of EPAct
section 368(e) implicitly governs FPA section 216(a)(2). Nothing in
EPAct section 368 suggests that the language of EPAct section 368(e)
was intended to establish a general definition of ``corridor'' for all
EPAct purposes. In fact, the heading of EPAct section 368(e)
characterizes that subsection not as a definition, but rather as
``Specifications of Corridor.'' Further, while FPA section 216 was
added to the FPA by EPAct section 1221(a), it was part of a stand-alone
title called the ``Electricity Modernization Act of 2005.'' \69\
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\69\ See EPAct sec. 1201.
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Moreover, National Corridors designated under FPA section 216(a)
serve a fundamentally different purpose than energy right-of-way
corridors for oil, gas, and hydrogen pipelines and electricity
transmission and distribution facilities, designated under EPAct
section 368; therefore, use of different approaches to delineating the
respective corridors is not only appropriate, it is necessary. The
corridors called for by EPAct section 368 are specifically
characterized as ``right-of-way corridors.'' Congress required that the
Federal land-managing agencies designate these right-of-way corridors
through amendments to their land use resource management plans or
equivalent land use plans. Thus, designation of right-of-way corridors
under EPAct section 368 is in the nature of land use planning.
In contrast, when the Department designates National Corridors
under FPA section 216(a) it is not engaging in land use planning. FPA
section 216(a) established a profoundly different task for the
Department, a task that is novel in the realm of electric system
planning and development. As discussed in Section I.A above, the
Department's role under FPA section 216(a) is limited to the
identification of congestion and constraint problems and the geographic
areas in which these problems exist, and does not extend to the
functions performed by siting authorities in evaluating routes for
transmission facilities. None of the considerations listed in FPA
section 216(a)(4) speak to land use issues. Thus, unlike an EPAct
section 368 energy right-of-way corridor, an FPA section 216(a)
National Corridor is not intended to identify a potential transmission
siting route. As the Supreme Court recently held, ``A given term in the
same statute may take on distinct characters from association with
distinct statutory objects calling for different implementation
strategies.'' \70\
---------------------------------------------------------------------------
\70\ Environmental Def. v. Duke Energy Corp., 127 S. Ct. 1423,
1432 (2007).
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[[Page 57007]]
Numerous commenters argue that the draft Mid-Atlantic Area National
Corridor is inconsistent with common meanings of the term ``corridor.''
Given the statutory reference to ``any geographic area'' as well as the
novel nature of FPA section 216(a), it is not clear that common
meanings or past uses of the term ``corridor'' have much relevance for
the delineation of National Corridor boundaries. Nonetheless, the
Department does not believe that the draft Mid-Atlantic Area National
Corridor is inconsistent with such commonly accepted meanings. There
was broad consensus among the commenters on the Congestion Study that
if a project-based approach were not used to set National Corridor
boundaries, then a source-and-sink approach should be. The Department
used a source-and-sink approach to develop the boundaries of the draft
Mid-Atlantic Area National Corridor. Such an approach comports with the
common usage of ``corridor'' as an area linking two other areas. This
approach is also consistent with the physical properties of the
electric grid, because a transmission line into a congested or
constrained load area will not benefit that load unless the line
connects with a source of power that could help to serve the load.
In addition to dictionary definitions of ``corridor,'' commenters
offer examples of usage of the term to argue that the draft Mid-
Atlantic Area National Corridor is overly broad. Again, the Department
questions the relevance of such examples, even the examples of
electricity industry usage, given the novel nature of a National
Corridor under FPA section 216(a). However, the Department notes that
there are examples of the term ``corridor'' being used in other
contexts to refer to geographic areas not dissimilar in size and shape
to the draft Mid-Atlantic Area National Corridor.\71\
---------------------------------------------------------------------------
\71\ For example, in the trade context, ``corridors'' are often
very broad. The North American Free Trade Agreement led to the
establishment of various trade corridors in North America. Not
unlike National Corridors, these trade corridors are areas where
there is a need to develop transportation and communications
infrastructure to facilitate trade. These trade corridors include
the ``Pacific Corridor,'' which ``includes the entire geographic
band formed by the Rocky Mountain range and the Pacific Coast.'' See
North American Forum on Integration Web site at http://www.fina-nafi.org/eng/integ/corridors.asp?langue=eng&menu=integ
.
---------------------------------------------------------------------------
The Department does not think it is reasonable, as some commenters
have suggested, to interpret the term ``geographic area experiencing
electric energy transmission capacity constraints or congestion that
adversely affects consumers'' as restricting a National Corridor
designation to the specific confines of the load being adversely
affected by congestion or the constrained transmission lines causing
such congestion. FPA section 216(a)(4)(A) and (B) both refer to the
Department considering economic factors in ``the corridor, or the end
markets served by the corridor.'' Since the end markets served by a
National Corridor are the load centers where consumers are being
adversely affected by congestion, this language indicates that Congress
envisioned designation of National Corridors that extend beyond the
location of the adversely affected consumers. FPA section 216(b)(6)
requires that before FERC issues a permit for a project in a National
Corridor, it must make a finding that the project ``will maximize, to
the extent reasonable and economical, the transmission capabilities of
existing towers or structures.'' Thus, FERC is authorized to issue a
permit for projects that do not use existing towers, provided that it
concludes that use of existing towers is not reasonable or economical.
Since FERC can only issue permits within the bounds of a National
Corridor, this language indicates that Congress envisioned designation
of National Corridors that extend beyond existing constrained
transmission lines.
The term ``geographic area experiencing electric energy
transmission capacity constraints or congestion that adversely affects
consumers'' envisions an area that encompasses the load being adversely
affected by congestion and the constrained transmission lines causing
such congestion, but the statute is ambiguous with regard to the
precise scope of the area. The Department believes its source-and-sink
approach to delineating the boundaries of the draft Mid-Atlantic Area
National Corridor represents a reasonable interpretation of this
ambiguous statutory term.
As discussed in Section I.A above, FPA section 216(a) does not
shift to the Department the roles of electric system planners or siting
authorities in evaluating or selecting solutions to congestion and
constraint problems. Thus, in implementing its source-and-sink
approach, the Department has attempted to identify source areas that
would enable a range of generation options. Theoretically, a sink area
could be served by generation sources from across the entire
interconnection. Also, given the long lead time involved in planning,
obtaining regulatory approvals for, and constructing transmission
projects, areas without a current surplus of generation could well
develop additional power sources by the time a transmission project is
completed. Therefore, not only could areas with existing surplus
generation function as source areas, but also areas with projected
surplus generation, or areas with available fuel supply for additional
generation. The Department was faced, therefore, with a considerable
range of potential source areas from which to choose when delineating
the draft Mid-Atlantic Area National Corridor.
In exercising its judgment as to which source areas to use for
purposes of delineating the boundaries of the draft Mid-Atlantic Area
National Corridor, the Department was guided by several factors. The
Department has tried to balance the objective of accommodating a range
of options against the practical limitations on delivery of power over
increasingly longer distances.\72\ The Department has also taken into
consideration State concerns about the size of any Mid-Atlantic Area
National Corridor, as well as the fact that Congress opted for a
limited approach to Federal preemption of transmission siting. The
Department has been further guided by the considerations identified in
FPA section 216(a)(4). Finally, consistent with the language of FPA
section 216(a)(2) referring to designation of a geographic area
experiencing constraints or congestion that adversely affects
consumers, the Department has restricted its selection of source areas
to those separated from the identified sink area, i.e. the Mid-Atlantic
Critical Congestion Area, by one or more of the constraints identified
in Section VIII.B of the May 7 notice as causing congestion adversely
affecting consumers.
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\72\ The Department recognizes, as some commenters have pointed
out, that the longer the transmission line, the greater the
associated line losses, and that generation that is remote from a
load center is less effective in providing some of the ancillary
services required to maintain reliability than generation that is
closer to the load center.
---------------------------------------------------------------------------
The result of this analysis was the identification of two
categories of source areas: (1) The closest locations with substantial
amounts of existing, under-used economic generation capacity separated
from the identified sink area by one or more of the constraints
identified as causing congestion adversely affecting consumers; and (2)
the closest locations with the potential for substantial development of
wind generation capacity separated from the identified sink area by one
or more of the constraints identified as causing congestion adversely
affecting consumers. Identification of the first category is consistent
with FPA section
[[Page 57008]]
216(a)(4)(A), which emphasizes the importance of ensuring adequate
supplies of reasonably priced power. Identification of the second
category is consistent with FPA section 216(a)(4)(B), which emphasizes
diversification of supply, and FPA section 216(a)(4)(C), which
emphasizes promotion of energy independence. Much of the generation in
the first category happens to be coal-fired, thus identification of
that category is also consistent with FPA section 216(a)(4)(B) and
(C).\73\
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\73\ As discussed in Section VIII.C.3 of the May 7 notice, much
of the existing generation fleet in the eastern portion of PJM's
footprint and in the downstate portion of New York is fueled by oil
or natural gas. While NJBPU argues that increasing access to coal-
fired generation would reduce fuel diversity within the PJM
footprint as a whole, the Department notes that this does not alter
the desirability of reducing where possible the reliance on oil and
natural gas. Further, given this source area's consistency with the
other considerations in FPA section 216(a)(4), we conclude that its
use in setting an outer bound for the draft Mid-Atlantic Area
National Corridor was appropriate.
---------------------------------------------------------------------------
The Department then delineated the draft Mid-Atlantic Area National
Corridor by identifying the counties linking the identified source
areas with the Mid-Atlantic Critical Congestion Area. While the
Department recognizes that political boundaries have nothing to do with
the characteristics of the electric system, we continue to believe that
it is important to establish precise, easily identified boundaries for
the Mid-Atlantic Area National Corridor. We conclude that use of county
boundaries is a reasonable means of providing such certainty.
Thus, the Department delineated the draft Mid-Atlantic Area
National Corridor by connecting the sink area containing consumers
adversely affected by congestion with a range of source areas separated
from the identified sink area by the constraints causing such
congestion.\74\ While many commenters complain that the identified
source areas are too far from the sink area or that the draft Mid-
Atlantic Area National Corridor is too broad, we note that these
commenters have not identified specific alternative source areas or
specific alternative Corridors.\75\ Further, we acknowledge NPCC's
concerns that the draft Mid-Atlantic Area National Corridor may be too
narrow; the grid is highly interconnected and modifications to one
portion of the transmission system can have significant effects on
power flows over other distant portions. However, the desire to ensure
that all potentially required reliability upgrades are encompassed must
be balanced against other statutory considerations. Thus, given the
overall framework of FPA section 216 and the physical properties of the
electric grid, the Department concludes that its approach to
delineating the draft Mid-Atlantic Area National Corridor is consistent
with the statutory call for the designation of a ``geographic area
experiencing electric energy transmission capacity constraints or
congestion that adversely affects consumers.'' \76\
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\74\ The Department notes that in this instance the sink area is
large and diverse, and there are many possible sources, meaning that
DOE could have drawn a large number of narrower but crossing or
overlapping source-and-sink corridors. The result, however, would
have been confusing, and could have given the impression that DOE
was prescribing or advocating which source should be linked with
which sub-part of the sink area. Designating one National Corridor
encompassing the sink area and the source areas is a more practical
approach that is consistent with the source-and-sink concept while
preserving the latitude of others to make their decisions on the
basis of more specific analyses.
\75\ While commenters have failed to identify specific
alternative source areas, some commenters have offered examples of
significant potentials for increased efficiency and distributed
generation. As discussed in Section I.A above, designation of the
draft Mid-Atlantic Area National Corridor will neither prejudice
State or Federal siting processes against such non-transmission
solutions, nor discourage market participants from pursuing such
solutions. Thus the existence of such non-transmission alternatives
does not provide a basis for adjusting the boundaries of the draft
Mid-Atlantic Area National Corridor or declining to designate the
Corridor.
\76\ With regard to comments about the ``presumption against
preemption,'' this doctrine arises when there is a controversy
whether a given State authority conflicts with, and thus has been
displaced by, the existence of a Federal authority. New York v.
FERC, 535 U.S. 1, 17-18 (2002). We are not concerned here with the
validity of any State law or regulation, nor are we invalidating any
such law or regulation. Thus, the doctrine is not applicable.
---------------------------------------------------------------------------
Some commenters complain that the draft Mid-Atlantic Area National
Corridor fails to provide adequate guidance on appropriate transmission
solutions and, thus, the Department should go back to the drawing board
to determine specific routes linking specific sources and sinks.
However, the Department is deliberately not attempting to identify
preferred transmission solutions. As discussed in Section I.A above,
the Department has concluded that FPA section 216(a) was not intended
to shift to the Department the roles of electric system planners or
siting authorities. \77\
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\77\ With regard to PaPUC's comment that the draft Mid-Atlantic
Area National Corridor includes areas that for a variety of
economic, environmental, or technical engineering reasons would be
excluded from any major transmission infrastructure project study,
the Department notes that if PaPUC's assessment is correct, then no
transmission project will be proposed in such areas. Thus, the
objection is more academic than of real consequence.
---------------------------------------------------------------------------
The Department recognizes that some States are concerned about
unintended expansion of Federal siting authority to include proposed
transmission projects that happen to be located within the Mid-Atlantic
Area National Corridor but are unrelated to the problem that prompted
its designation. The Department recognizes that while Congress could
have completely preempted State siting of interstate transmission
facilities, it instead chose a more limited approach. However, the
Department does not believe that designation of the Mid-Atlantic Area
National Corridor will result in the exercise of Federal permitting
authority beyond that envisioned by Congress. FPA section 216(b)(4)
specifies that FERC jurisdiction is limited to projects that will
``significantly reduce transmission congestion in interstate commerce
and protects or benefits consumers.'' As discussed in Section I.A
above, FERC has stated that it interprets this to mean that a project
must significantly reduce the transmission congestion identified by
DOE. Therefore, only those transmission projects within the Mid-
Atlantic Area National Corridor that would significantly reduce
congestion into or within the Mid-Atlantic Critical Congestion Area
would be eligible for a FERC permit.
In the May 7 notice, the Department stated that determining the
exact boundaries of a National Corridor under a source-and-sink
approach is more an art than a science, and there will rarely be a
dispositive reason to draw a boundary in one place as opposed to some
number of miles to the left or right. This statement was not, as some
commenters allege, an admission that the boundaries of the draft Mid-
Atlantic Area National Corridor are arbitrary and capricious. Rather,
the statement was a recognition that no single boundary line can be
determined based solely upon analysis of the data and, thus, the
drawing of the boundary necessarily involves the exercise of judgment.
The Department believes that it has exercised that judgment in a
reasonable manner.
Finally, numerous commenters have requested that particular
counties be added or removed from the Mid-Atlantic Area National
Corridor. \78\ The Department has carefully considered these requests.
However, it concludes that its approach to delineating the draft Mid-
Atlantic Area National Corridor, as described above, does not warrant
further adjustment.
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\78\ See, e.g., comments of Fauquier County, VA, Philip Morin,
Jayne Baran, AEP, ODEC, Allegheny, and FirstEnergy Service Company.
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[[Page 57009]]
E. Inclusion of Environmentally, Historically, or Culturally
Significant Lands
Summary of Comments
Many commenters, including numerous individuals, argued that the
Department should exclude National Parks, State parks, and other
environmentally, historically, or culturally significant lands from any
Mid-Atlantic Area National Corridor. For example, National Parks
Conservation Association (NPCA) opposes inclusion of any units of the
National Park System in the Mid-Atlantic Area National Corridor. NPCA
states that the draft Mid-Atlantic Area National Corridor conflicts
with the National Park Service Organic Act and the provisions of the
Land and Water Conservation Fund program. Many commenters objected to
the inclusion of the Upper Delaware River Valley in the draft Mid-
Atlantic Area National Corridor. For example, the Upper Delaware
Preservation Coalition noted that the Upper Delaware River is a
Federally designated Wild and Scenic River, whose management plan
declares ``major electric lines'' as incompatible uses. Other
commenters urged exclusion of various historic sites in the Piedmont
and Shenandoah Valley regions of Virginia. The Pennsylvania Land Trust
Association states that public lands, including lands subject to
conservation easements, having been protected through public and
private resources, must be exempted from conversion to the private use
of the energy industry. \79\
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\79\ See also statement of Arthur Gray Coyner at May 15, 2007,
Arlington, VA public meeting.
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DOE Response
The Department concludes that exclusion of environmentally,
historically, or culturally sensitive lands from the Mid-Atlantic Area
National Corridor is neither required nor necessary. First, with regard
to public lands such as parks and wildlife refuges, nothing in the
statute suggests that the Department should exclude such lands from a
national interest electric transmission corridor. In fact, FPA section
216(f)(2), as discussed in Section I.A above, expressly excludes
property owned by the United States or a State from a FERC permit
holder's exercise of eminent domain authority. Given that FERC can only
issue permits that cover geographic areas within a National Corridor,
the presence of explicit statutory language clarifying that a FERC
permit does not provide the right of eminent domain over Federal or
State property indicates that Congress envisioned that such property
could be included within National Corridors. \80\
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\80\ The significance of the absence of any express exclusion of
Federal or State property from the reach of FPA section 216(a) is
further underscored by Congress' explicit exemption of National
Parks and certain other Federal lands from the Presidential appeal
process established by FPA section 216(h)(6). See FPA section
216(j)(2), 16 U.S.C. 824p(j)(2).
---------------------------------------------------------------------------
The Department sees no need to exclude Federal or State property
from the Mid-Atlantic Area National Corridor. As discussed in Section
I.A above, if FERC were to issue a permit for a transmission facility
slated to cross any Federal or State property, the permit holder would
still need to obtain a right-of-way across that property. Inclusion of
Federal or State property in a National Corridor does nothing to change
the process for obtaining such a right-of-way. In the absence of a
National Corridor designation, a developer seeking to build a
transmission facility on Federal or State property would need to obtain
the permission of the Federal or State agency responsible for managing
that property. If Federal or State property were included in a National
Corridor, a developer seeking to build a transmission facility on such
property would still need to obtain the permission of the Federal or
State agency responsible for managing that property. Further, neither a
National Corridor designation nor the issuance of a FERC permit
controls a Federal or State land management agency's decision whether
to grant or deny a right-of-way. Thus, contrary to the assertions of
various commenters, inclusion of Federal and State property within the
Mid-Atlantic Area National Corridor creates no additional risk that
such property might become the site of a transmission facility.
Exclusion of Federal or State property from the Mid-Atlantic Area
National Corridor is not only unnecessary, it could also unduly
restrict existing flexibility in siting transmission facilities. In the
absence of a National Corridor designation, a transmission project
could be built on Federal or State property if the developer obtained a
construction permit from a State siting agency and a right-of-way from
the Federal or State land managing agency. FERC's authority to issue a
permit is limited to the geographic extent of the designated National
Corridor. If Federal and State property were excluded from the Mid-
Atlantic Area National Corridor, then FERC would not be able to issue a
permit for any portion of a transmission project that crossed such
property, even if the Federal or State agency responsible for managing
that property were willing to grant a right-of-way. There is no reason
to believe that Congress intended such a result.
Some commenters recommended that the Mid-Atlantic Area National
Corridor exclude certain environmentally, historically, or culturally
significant lands not owned by the United States or a State. Nothing in
the statute suggests that the Department should exclude such lands from
the Mid-Atlantic Area National Corridor. None of the considerations
listed in FPA section 216(a)(4) address any specific environmental,
historical, or cultural factors or even land use issues in general.
While FPA section 216(a)(4) is not an exclusive list of the factors
that the Department may consider when designating a National Corridor,
the Department does not believe that analysis of the effect of
transmission construction on environmentally, historically, or
culturally significant lands is warranted at the National Corridor
designation stage. If FERC jurisdiction were triggered under FPA
section 216(b), FERC would conduct an evaluation of the reasonably
foreseeable effects of transmission construction on any
environmentally, historically, or culturally significant lands,
including an analysis of alternative routes and mitigation options.\81\
Based on that analysis, FERC has the authority to approve the
application, deny the application, or approve the application with
modifications. The Department has delineated the Mid-Atlantic Area
National Corridor broadly enough to enable FERC to consider a wide
range of alternative routes. Thus, the Department sees no need to
exclude environmentally, historically, or culturally significant lands
from the Mid-Atlantic Area National Corridor. Further, as with Federal
and State property, exclusion of such lands could unduly restrict
existing flexibility in siting transmission facilities, and there is
nothing in FPA section 216 that indicates Congress intended such a
result.
---------------------------------------------------------------------------
\81\ See FERC Order No. 689, 71 FR 69,440, 69,459, 117 FERC ]
61,202 at P 177 (avoidance of special land use areas will be
explored through the course of the NEPA review).
---------------------------------------------------------------------------
Some commenters have argued that certain Federal laws bar the
construction of transmission facilities in certain areas, and thus the
Department should exclude those areas from the Mid-Atlantic Area
National Corridor. To the extent that any Federal laws do limit or
prohibit construction of transmission facilities in certain areas, FERC
as well as the States and other siting authorities
[[Page 57010]]
already are bound by those limitations or prohibitions.\82\ Therefore,
no exclusion of such areas from the Mid-Atlantic Area National Corridor
is needed.
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\82\ See FPA sec. 216(j), 16 U.S.C. 824p(j) (except as
specifically provided, nothing in FPA section 216 affects any
requirement of any Federal environmental law).
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F. Consideration of Alternatives Under FPA Section 216(a)(2)
Summary of Comments
Several commenters, including Governor O'Malley and Governor Kaine,
argue that the Department should evaluate non-transmission solutions to
congestion before designating the Mid-Atlantic Area National Corridor.
Many of these commenters argued that FPA section 216(a)(2) requires
such an evaluation. SELC states that designation of a Mid-Atlantic Area
National Corridor would put in place a process that allows for fast-
tracking the approval of high-voltage transmission lines, whereas the
designation would do nothing to fast-track investments in energy
efficiency, conservation, or other alternative solutions to congestion.
NYPSC states that efficient price signals allow market participants to
make informed choices when determining whether investment in new or
improved transmission is economically justified. Therefore, NYPSC
states, the Mid-Atlantic Area National Corridor should only be
designated if a cost/benefit analysis shows a transmission solution
will clearly yield a net positive benefit to the system. Otherwise,
NYPSC asserts, project developers may abandon already planned
facilities, such as additional generation facilities downstream of
constrained or congested transmission facilities, and States' ability
to pursue non-transmission solutions will be compromised.
OMS states that while the Department asserted in the May 7 notice
that it was not making findings on the optimal remedy for congestion,
the May 7 notice nonetheless contains statements that suggest the
contrary, for example, statements that efforts to increase demand
response in PJM do not appear capable of forestalling the need for
additional transmission.
Other commenters, such as the National Rural Electric Cooperative
Association and the American Public Power Association, stated that
DOE's proposed designations do not and should not be interpreted to
prejudge any particular solution. NYISO argues that the Department
should not take on the function of comparing the merits of alternative
solutions to congestion. Duke Energy Corporation argues that developers
will make project proposals and decisions based upon business-case
economic analyses and the availability of appropriate cost-recovery
mechanisms, and designation of a Mid-Atlantic Area National Corridor
does not bias this process in favor of any particular solution.\83\
---------------------------------------------------------------------------
\83\ See also comments of PHI.
---------------------------------------------------------------------------
DOE Response
The Department concludes that consideration of non-transmission
solutions to the congestion problems facing the Mid-Atlantic Critical
Congestion Area is neither required nor necessary as a precondition to
designating the Mid-Atlantic Area National Corridor. FPA section
216(a)(2) calls for the Secretary to consider ``alternatives and
recommendations from interested parties'' before making a National
Corridor designation. The statute, however, does not specify what the
term ``alternatives'' refers to. Numerous commenters would have us
interpret the phrase to mean alternative solutions to congestion or
constraint problems, which would then necessitate a comparison of non-
transmission solutions against transmission solutions. Nothing in the
language of FPA section 216 requires or suggests such an
interpretation.
As discussed in Section I.A above, the very structure of FPA
section 216 indicates that the Department's role is limited to the
identification of congestion and constraint problems and the geographic
areas in which these problems exist, and does not extend to the
functions of electric system planners or siting authorities in
evaluating solutions to congestion and constraint problems. Even the
statutory requirement to consider alternatives is not couched in terms
of an independent analysis of a reasonable range of alternatives, as
one would expect if Congress had intended the Department to analyze and
select a solution, but rather refers merely to the Department
considering those alternatives and recommendations offered by
interested parties. The Department believes that expanding its role to
include analyzing and making findings on competing remedies for
congestion could supplant, duplicate, or conflict with the traditional
roles of States and other entities.
Not only does the statute not require the Department to analyze
non-transmission alternatives, such analysis is also not warranted as a
matter of discretion. The primary concern of those arguing for analysis
of non-transmission solutions to congestion or constraints is that
National Corridor designation disadvantages those solutions, and thus,
according to these comments, the Department should only make such a
designation where it has determined that transmission is the best
solution. As discussed in Section I.A above, the Department sees no
basis to conclude that designation of the Mid-Atlantic Area National
Corridor would either prejudice State or Federal siting processes
against non-transmission solutions or discourage market participants
from pursuing such solutions.
The Department concludes that the phrase ``alternatives and
recommendations from interested parties'' as used in FPA section
216(a)(2) is ambiguous. For the reasons given above, the Department
declines to interpret the phrase to mean non-transmission solutions to
congestion or constraint problems. The Department believes it is more
appropriate to interpret this phrase in a manner that recognizes the
statutory limits on DOE's authority. Upon completion of a congestion
study, the statute gives the Department two options: Designate one or
more National Corridors or do not designate any National Corridors. In
light of this statutory framework, the Department concludes that the
term ``alternatives and recommendations from interested parties'' was
intended to refer to comments suggesting National Corridor designations
for different congestion or constraint problems, comments suggesting
alternative boundaries for specific National Corridors, and comments
suggesting that the Department refrain from designating a National
Corridor.
With regard to OMS' concerns about certain statements in the May 7
notice, the Department reiterates that its designation of the Mid-
Atlantic Area National Corridor is an identification of congestion
problems and the geographic areas in which these problems exist. The
designation does not constitute a determination of the best solution to
those problems. The Department is expressing no opinion about how the
identified congestion problems should or will be addressed. To the
extent that any statements in the May 7 notice suggested the contrary,
that was not the Department's intent.
G. Whether DOE Should Exercise Its Discretion To Designate the Draft
Mid-Atlantic Area National Corridor
Summary of Comments
Several commenters agreed with the May 7 notice's analysis that
economic
[[Page 57011]]
development, reliability, supply diversity, energy independence, and
national defense and homeland security considerations warrant the
exercise of the Secretary's discretion to designate the draft Mid-
Atlantic Area National Corridor. For example, PJM argued that all of
the considerations identified by the Department demonstrate the
critical importance of designating at least the portion of the draft
Mid-Atlantic Area National Corridor within the PJM footprint. PJM
further notes that its most recent 2007 Regional Transmission Expansion
Plan reveals additional looming violations of NERC's and PJM's own
reliability criteria beyond those already identified in the May 7
notice. The City of New York argues that designation of a National
Corridor would increase reliability; heighten national security; allow
for increased economic transfers from the PJM and upstate New York
markets into the New York City load pocket; reduce reliance on
antiquated and inefficient generating plants that raise air quality
issues in the densely populated New York City urban environment; and
increase diversity of fuel sources for New York City, which is overly
reliant on an increasingly constrained natural gas supply system.
Other commenters argued that the considerations identified by the
Department do not support designation of the draft Mid-Atlantic Area
National Corridor. Numerous commenters argued that economic development
considerations do not warrant designation of the draft Mid-Atlantic
Area National Corridor. A few commenters argued that improving access
to coal-fired generation in the Midwest would not in fact result in
lower power prices for consumers in the sink area. For example, OH
Siting Board states that the generation fleet in the Midwest is old,
due for several retirements, and uncontrolled in emissions. Therefore,
OH Siting Board states, the additional environmental and operational
costs associated with increased generation from these plants, in
conjunction with bidding into a different wholesale market, may
eliminate the expected economic benefit of improving the sink area's
access to such plants. NJBPU argues that with the likely advent of
greenhouse gas regulation, the cost of power from these plants will
increase, making their output less competitive in eastern load
centers.\84\
---------------------------------------------------------------------------
\84\ See also comments of Sierra Club (National).
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Many commenters argued that even if economic development in the
sink area would benefit from designation of the draft Mid-Atlantic Area
National Corridor, such benefit must be weighed against the negative
economic effect that construction of transmission would have on other
areas within the Mid-Atlantic Area National Corridor. For example, New
York Farm Bureau (NYFB) states that construction of transmission lines
within the upstate New York portions of the draft Mid-Atlantic Area
National Corridor would increase upstate wholesale electric costs, thus
reducing the ability of the region to recruit new upstate employment
opportunities and negatively affecting farm businesses. Pike County,
Pennsylvania states that its recreation and tourism industries will
suffer if the draft Mid-Atlantic Area National Corridor is designated.
Many commenters argued that some areas within the draft Mid-
Atlantic Area National Corridor away from the sink area are already in
a worse economic position than the sink area that the draft Corridor is
designed to serve. Chenango County Farm Bureau states that upstate New
York, as a region, has had one of the lowest job growth rates in the
Nation over the past ten years. Pennsylvania House of Representatives
Majority Leader DeWeese states that if the draft Mid-Atlantic Area
National Corridor were designated, Pennsylvania would become an energy
hub for the urban centers of the Mid-Atlantic region, while residents
of western Pennsylvania would face increased electric rates and receive
no economic or quality-of-life benefit from the resulting transmission
lines.\85\
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\85\ See also comments of OH Siting Board, Pennsylvania Farm
Bureau, and Fauquier County, VA.
---------------------------------------------------------------------------
Many individuals residing within the draft Mid-Atlantic Area
National Corridor but away from the sink area argued that designation
would require them to bear an unfair burden. For example, Jameson
O'Donnell stated:
I believe this is really an effort to take away local control of
our region to our detriment and for the benefit of other areas which
have not planned accordingly * * *. Especially in today's electronic
world, the tremendous economic development occurring in MD and VA
could occur in other places (e.g. southwestern PA) however, that
opportunity is being taken away from us as those states try to make
us the armpit of the region by dumping all of their trash here,
using all the coal without adequate compensation for the damage
caused, and now through the destruction of our land and economic
development potential by scarring us with generation plants and
transmission lines they don't want in their own states.\86\
---------------------------------------------------------------------------
\86\ See also comments of Debra Bohunicky (``[I]t is
unconscionable that these intentions to increase power availability
should only serve the interests of a few in a specifically overusing
region (such as NY city) to the grave disadvantage of those
displaced by or put under the deleterious effects of the entire
line.''), and William Loftus (``This idea of source/sink areas is
repugnant, and will cause rural properties to be impacted so that
urban dwellers may continue to have access to cheaper power.'').
With regard to reliability considerations, Con Ed states that the
Department has failed to account for the adverse reliability impacts of
favoring long-haul transmission.
Numerous commenters argued that instead of promoting national
defense and homeland security, the draft Mid-Atlantic Area National
Corridor would actually create security problems by promoting the
construction of long above-ground transmission lines that would become
prime targets for terrorist attacks.\87\ NYFB states that before
designating a Mid-Atlantic Area National Corridor, the Department
should examine all areas surrounding New York City and Long Island from
which power could be supplied.
---------------------------------------------------------------------------
\87\ See, e.g., comments of York County, PA Planning Commission,
Frances Cooley, and Ralph Neal.
---------------------------------------------------------------------------
Environmental Defense states that although it is not categorically
opposed to construction of new interstate transmission facilities, the
draft Mid-Atlantic Area National Corridor demonstrates a bias toward
large interstate transmission projects serving coal and nuclear
generating stations to the detriment of demand response programs,
energy efficiency, and distributed generation, all of which would do
more to enhance national defense, homeland security, and energy
independence, and to provide an adequate and reasonably priced supply
of electricity.
Other commenters argued that additional considerations beyond those
identified in the May 7 notice warrant the Department exercising its
discretion not to designate the draft Mid-Atlantic Area National
Corridor. Many commenters argued that the Department should have
factored in environmental considerations, and that had it done so, it
would have concluded that designation is not justified. Some of these
commenters raised concerns about the effects of long transmission lines
on viewsheds and wildlife habitat. Numerous commenters, including many
individuals, argued that the draft Mid-Atlantic Area National Corridor
would worsen greenhouse gas emissions and air quality, because, they
claim, the PJM portion of the Corridor is designed to increase coal-
based generation.\88\ For example, NJDEP is concerned that the
designation would undermine any reductions in greenhouse gas emissions
[[Page 57012]]
New Jersey may achieve through its legislative and regulatory programs,
including the State's recently enacted Global Warming Response Act.
Other commenters stated that some of the coal-based plants in the
source areas identified in the May 7 notice are already among the most
polluting in the country and construction of additional transmission
capacity to enable these plants to operate at higher levels will result
in additional risk to human health and the environment.
---------------------------------------------------------------------------
\88\ See, e.g., comments of NPCA, Wickliffe Walker, Mitzi Price,
and Kevin Brogley.
---------------------------------------------------------------------------
Other commenters argued that the Department should accord more
deference to existing State and regional planning and siting processes
and hold off on any designation of a Mid-Atlantic Area National
Corridor until and unless it is clear that a Federal siting forum is
needed. These commenters offered descriptions of existing State siting
and PJM and NYISO planning processes. For example, PaDEP states that
designation of the draft Mid-Atlantic Area National Corridor would be a
premature usurpation of State authority given that there is no evidence
that the PaPUC has either refused to site proposed transmission
projects, obstructed the siting of such projects, or modified such
projects in a way that renders them uneconomic. Governor Kaine states
that Virginia enacted an energy plan in 2006 that expressly recognizes
the importance of regional considerations, as well as new energy
efficiency and conservation measures. NYPSC states that because the
transmission siting process in New York works well, there has been no
demonstrated need to designate any National Corridor within New York
State.\89\
---------------------------------------------------------------------------
\89\ See also comments of NJ Public Advocate, CARI, and ODEC.
---------------------------------------------------------------------------
Those commenters who suggested that the Department defer
designation of any Mid-Atlantic Area National Corridor argued that such
deferral would be consistent with FPA section 216's recognition that
States retain primary authority over transmission siting. These
commenters also argue that designation of a Mid-Atlantic Area National
Corridor would have an extremely disruptive effect on energy planning
efforts currently ongoing in the States. For example, Governor Kaine
states that designation of a Mid-Atlantic Area National Corridor along
with ensuing FERC siting proceedings could have the effect of delaying
construction of transmission in Virginia, contrary to the purpose of
FPA section 216. Governor O'Malley states that designation would
significantly reduce incentives for utilities to continue to work
cooperatively with Maryland agencies.
On the other hand, some commenters urged the Department not to
defer designation of a Mid-Atlantic Area National Corridor. For
example, AEP argued that Federal backstop authority would provide the
impetus needed to bring parties together and resolve any impasse in a
timely fashion. AEP states that the obstacles and excessive delays it
encountered during the 15-year process of siting and building its
Jacksons Ferry--Wyoming line demonstrate the dire need for National
Corridors to be designated. National Grid argues that as a practical
matter, no prudent transmission developer would rely on a National
Corridor designation to circumvent regional, State, or local planning
and siting rules and processes, because the developer will need the
support of key stakeholders such as customers, States, and local
authorities for other reasons.\90\
---------------------------------------------------------------------------
\90\ See also comments of WIRES and statement of Bill May at May
23, 2007, New York, NY public meeting.
---------------------------------------------------------------------------
DOE Response
The Department recognizes that FPA section 216 adopted a novel
approach to addressing congestion problems, and that many commenters
have grave concerns about the effects of this new approach. However,
after careful consideration of these concerns, the Department concludes
that designation of the draft Mid-Atlantic Area National Corridor is
consistent with the intent of FPA section 216(a).
As an initial matter, the Department notes that a number of the
comments seem premised on the assumption that designation of the draft
Mid-Atlantic Area National Corridor would create a bias in favor of
long transmission lines running the full length of the Corridor, and in
particular long transmission lines connecting to coal-fired generation.
The Department regards such an assumption as unfounded. As discussed in
Section I.A above, a National Corridor designation does not constitute
a finding that transmission must or even should be built; it does not
prejudice State or Federal siting processes against non-transmission
solutions; and it should not discourage market participants from
pursuing such solutions. Further, even within the realm of potential
transmission solutions, designation of the draft Mid-Atlantic Area
National Corridor would not favor any particular transmission project
within the Corridor. While the Department did identify regions with
coal-fired generation as source areas when it delineated the draft Mid-
Atlantic Area National Corridor, such delineation was not a
determination that transmission lines connecting those particular
source areas to the sink area must or should be built, or that such
projects are preferable to other transmission projects. The
Department's identification of source areas was a means of setting an
outer bound on the geographic range of potential transmission projects
that could become subject to FERC jurisdiction. Designation of the
draft Mid-Atlantic Area National Corridor no more dictates or endorses
the construction of transmission lines to access coal-fired generation
than it does the construction of transmission lines to access the wind-
rich identified source areas. If a transmission project were proposed
within the draft Mid-Atlantic Area National Corridor to deliver
generation to the Mid-Atlantic Critical Congestion Area from somewhere
other than the identified source areas, the developer of the project
would be eligible to seek a FERC permit, provided it met the standards
of FPA section 216(b). The Department sees no reason to conclude that
designation of the draft Mid-Atlantic Area National Corridor would
discourage any such projects.\91\
---------------------------------------------------------------------------
\91\ For example, when explaining its rationale for the eastern
boundary of the draft Mid-Atlantic Area National Corridor in the May
7 notice, the Department explicitly recognized that if additional
generating capacity were developed at the Calvert Cliffs nuclear
plant, additional transmission capacity would likely be needed to
enable the electricity output to be moved from the Calvert Cliffs
substation to the load centers in the sink area. Since the issuance
of the May 7 notice, UniStar Nuclear has filed a partial application
with the Nuclear Regulatory Commission to construct an additional
unit at Calvert Cliffs. See UniStar Nuclear, NRC Project No. 746,
Submittal of a Partial Combined License Application, Acc. No.
ML071980292 (filed July 13, 2007).
---------------------------------------------------------------------------
Given that designation of the draft Mid-Atlantic Area National
Corridor does not determine whether or which transmission projects will
be built, concerns about the reliability, national security, and
environmental effects of long transmission lines and transmission lines
accessing coal-fired generation are not germane at this stage. If FERC
jurisdiction under FPA section 216(b) were triggered, FERC would
analyze and take into consideration the reasonably foreseeable effects
of that project, including the reliability impacts of the project,\92\
implications for
[[Page 57013]]
national security,\93\ and air quality and greenhouse gas impacts, as
required by NEPA and other environmental laws.\94\
---------------------------------------------------------------------------
\92\ See FERC Order No. 689, 71 FR 69,440, 69,446, 117 FERC ]
61,202 at P 41 (``[The Commission] will investigate and determine
the impact the proposed facility will have on the existing
transmission grid and the reliability of the system.'').
\93\ See id., 71 FR 69,440, 69,459, 117 FERC ] 61,202 at P 180
(``Homeland security related issues will be addressed on a case-by-
case basis.'').
\94\ See id., 71 FR 69,440, 69,456, 117 FERC ] 61,202 at P 141.
---------------------------------------------------------------------------
Commenters have disputed the Department's reliance on economic
growth considerations. Some have argued that improving access to coal-
fired generation in the Midwest will not reduce power prices in the
Mid-Atlantic Critical Congestion Area because of likely increases in
the cost of generation from such sources. The Department has documented
that consumers in the Mid-Atlantic Critical Congestion Area are
currently paying higher power prices because of persistent congestion
that thwarts access to cheaper power sources.\95\ As discussed above,
designation of the Mid-Atlantic Area National Corridor is not a
determination that transmission must, or even should, be built, let
alone that transmission to a particular generation source must be
built. If potential future events, such as the adoption of greenhouse
gas regulation, were to occur and increase the operating costs of
generation sources that are currently relatively cheap, such
developments would be taken into consideration by market participants
evaluating their economic incentives to build a transmission project to
those sources. Such developments would likely also be relevant in any
FERC permit proceeding, given FPA section 216(b)(4)'s requirement that
any project authorized by FERC must benefit or protect consumers.
Moreover, we note that our designation of the draft Mid-Atlantic Area
National Corridor is not motivated solely by a concern over price
differentials. Consumers in the Mid-Atlantic Critical Congestion Area
are facing near-term threats to the adequacy of their electricity
supply.\96\ Even if coal-fired power from some of the identified source
areas becomes more expensive, it may still be needed in substantial
amounts to serve demand in the Mid-Atlantic Critical Congestion Area.
---------------------------------------------------------------------------
\95\ See May 7 notice, Sections VIII.B and VIII.C.1.
\96\ See id., Section VIII.C.2; see also comments of PJM.
---------------------------------------------------------------------------
With regard to the other comments concerning economic development
considerations, the Department recognizes that it is critically
important to consider the relative effect that proposed transmission
facilities will have on the economic development of the communities
through which they are routed versus the communities those facilities
will serve. However, how a transmission line actually affects a
community through which it is routed is chiefly a function of how the
line is sited and how its costs are allocated, neither of which is
determined by a National Corridor designation.\97\ Further, FPA section
216(a)(4)(A) provides for consideration of the effect that congestion
and constraints are having on economic development; it does not speak
to the economic impacts of adding transmission capacity to address such
congestion and constraints. While FPA section 216(a)(4) is not an
exclusive list of the factors that the Department may consider when
deciding whether to designate a National Corridor, the Department does
not believe that consideration of the effect of adding transmission
capacity on economic development is warranted at the National Corridor
designation stage. If FERC jurisdiction under FPA section 216(b) were
triggered, FERC would consider the reasonably foreseeable economic
effects of the proposed project on the communities through which it is
proposed to be routed.\98\
---------------------------------------------------------------------------
\97\ As discussed in the May 7 notice, cost allocation for
transmission facilities is a long-standing FERC function.
\98\ See, e.g., FERC Order No. 689, 71 FR 69,440, 69,446, 117
FERC ] 61,202 at P 42 (``The Commission will also consider the
adverse effects the proposed facilities will have on land owners and
local communities.''); see also id., 71 FR 69,440, 69,456-57, 117
FERC ] 61,202 at P 150 (applicant required to provide information
concerning the impact of the proposed project on the towns and
counties in the vicinity of the project).
---------------------------------------------------------------------------
Some commenters urge us to defer any designation of a Mid-Atlantic
Area National Corridor until States and regional planning efforts have
had more time to address the congestion problems. These commenters
provide details on the effectiveness of various State and RTO or ISO
planning processes. As the Department stated in the May 7 notice, we do
not believe that Congress envisioned the adoption of a wait-and-see
approach to National Corridor designation. Nothing in the comments we
have received on the May 7 notice has changed our view of this subject.
Congress could have instructed the Department to study the adequacy
of State siting processes and consider that information when making
National Corridor designations, but Congress did not do so. Nothing in
FPA section 216(a) even mentions the issue of the State siting
processes. Instead, Congress itself, in FPA section 216(b)(1),
specified the conditions related to State siting processes that would
trigger potential Federal siting authority after designation of a
National Corridor.\99\ Thus, the Department believes that evidence of
the adequacy of State siting processes is not relevant to the
Department's decision-making under FPA section 216(a).
---------------------------------------------------------------------------
\99\ Specifically, as discussed in Section I.A above, FERC
jurisdiction is triggered only when either: The State does not have
authority to site the project; the State lacks the authority to
consider the interstate benefits of the project; the applicant does
not qualify for a State permit because it does not serve end-use
customers in the State; the State has withheld approval for more
than one year; or the State has conditioned its approval in such a
manner that the project will not significantly reduce congestion or
is not economically feasible. 16 U.S.C. 824p(b)(1).
---------------------------------------------------------------------------
Some commenters appear to regard National Corridor designation as
tantamount to punishing the States within the Corridor and, thus,
suggest that States who have ``good'' energy policies should be spared
such punishment. However, National Corridor designation is not an
indictment of State siting processes. The Department strongly supports
State and regional efforts to collectively address the congestion
problems confronting the region, whether those efforts are focused on
transmission solutions, non-transmission solutions, or a combination of
both. Despite the assertions of some commenters, the Department does
not believe that designation of the draft Mid-Atlantic Area National
Corridor necessarily will disrupt ongoing State or regional planning
processes. As discussed in Section I.A above, a National Corridor
designation itself does not preempt State authority or any State
actions. Thus, States retain the authority to work together to address
aggressively the congestion problems confronting the region. Further,
we expect utilities within the Mid-Atlantic Area National Corridor to
continue to work cooperatively with State and local authorities and to
participate in the regional planning processes of PJM and NYISO. We
note that FERC has indicated that it will consider any allegations that
an applicant has acted in bad faith in State proceedings when it
reviews permit applications under FPA section 216(b)(1)(C)(i).\100\
---------------------------------------------------------------------------
\100\ See FERC Order No. 689, 71 FR 69,440, 69,443-44, 117 FERC
61,202 at P22 (``The Commission expects all potential applicants
under FPA section 216 to act in good faith as it relates to State
jurisdiction. Although the Commission may exercise jurisdiction in
all instances where a State has withheld approval for more than one
year, the Commission, in determining whether to do so, will weigh
heavily clear evidence that an applicant has abused the State
process.''); see also 119 FERC ] 61,154 at P 35 (* * * if questions
arise during pre-filing concerning the adequacy of the applicant's
efforts to site the facility at the state level and Commission staff
determines that more processing at the state level is appropriate,
it will not hesitate to suspend the pre-filing process while the
state process continues'').
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[[Page 57014]]
State and regional efforts may well resolve the congestion problems
afflicting the Mid-Atlantic Critical Congestion Area without any
invocation of FERC authority. However, as the May 7 notice documented,
economic development, reliability, supply diversity, energy
independence, and national defense and homeland security considerations
all warrant designation of the draft Mid-Atlantic Area National
Corridor.\101\ Given the increasingly interconnected nature of the
transmission grid and wholesale power markets, siting of electricity
infrastructure poses increasingly complex questions about how to
balance equitably all competing interests. Tensions can exist between
what is perceived to be best for a region as a whole versus what is
perceived to be best for an individual State or a portion of one
State.\102\ National Corridor designation provides, in a defined set of
circumstances, a potential mechanism for analyzing the need for
transmission from a national, rather than State or local, perspective.
The comments the Department has received on the draft Mid-Atlantic Area
National Corridor reveal the presence of the kinds of tensions that
prompted Congress to create such a mechanism. The Department
acknowledges that designation of the draft Mid-Atlantic Area National
Corridor introduces a significant new possibility into the process of
siting transmission, and that the existence of this possibility may
pose challenges for States and may ultimately prove unnecessary.
However, given the totality of circumstances, including the expanse of
the congestion problem, the presence of looming reliability violations,
and the significance of the Mid-Atlantic Critical Congestion Area to
the security and economic health of the Nation as a whole, the
Department concludes that it would be inconsistent with the intent of
FPA section 216(a) to withhold the Federal safety net of National
Corridor designation.\103\
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\101\ See May 7 notice, Section VIII.C.
\102\ While some commenters have questioned the Department's
authority to designate a National Corridor in reaction to the
presence of congestion problems within a single State, courts have
long recognized the inherently interstate nature of transmission,
even transmission within one State. See FPL, 404 U.S. at 462.
Congestion problems within one State may well raise issues of
national concern. Nothing in FPA section 216(a) suggests that the
Department is limited to addressing congestion that crosses State
lines, provided that the Department determines that constraints or
congestion are adversely affecting consumers and that designation is
warranted, taking into account relevant considerations, including
the considerations identified in FPA section 216(a)(4), as
appropriate.
\103\ Further, whereas Congress could have completely preempted
State siting of interstate transmission facilities, allowing for the
potential exercise of limited Federal preemption in accordance with
FPA section 216(a) does not intrude on any State rights or
prerogatives.
---------------------------------------------------------------------------
In sum, having found the presence of congestion that adversely
affects consumers in the Mid-Atlantic Critical Congestion Area, the
Secretary has the discretion to designate a National Corridor. The
Secretary concludes, based on the totality of the information
developed, taking into account relevant considerations, including the
considerations identified in FPA section 216(a)(4), as appropriate,
that exercise of his discretion to designate the draft Mid-Atlantic
Area National Corridor is warranted.
H. Duration of the Mid-Atlantic Area National Corridor Designation
Summary of Comments
Several commenters objected to setting a twelve-year term for the
Mid-Atlantic Area National Corridor. For example, NARUC opposes the use
of a twelve-year term as inconsistent with the statute. NARUC argues
that the requirement that the Department conduct a congestion study
every three years indicates that the factual basis for National
Corridors must be reexamined and updated every three years, and, thus,
only a three-year term, subject to three-year extensions, is
permissible. NARUC states that use of a twelve-year term could easily
result in a designation remaining in place long after congestion issues
have been resolved.\104\ NYFB advocates a nine-year term rather than a
twelve-year term.
---------------------------------------------------------------------------
\104\ See also comments of OH Sitting Board and The Wilderness
Society.
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Other commenters, including National Grid and PJM, support a
twelve-year term for the Mid-Atlantic Area National Corridor
designation as consistent with planning needs.
RDOE Response
FPA section 216(a) does not itself impose any time limit on a
National Corridor designation, nor does the statute require the
Department to impose any such limit. While the statute requires the
Department to conduct a congestion study every three years, nothing in
the statute suggests that a National Corridor designation based on one
congestion study should sunset unless re-justified in the next
congestion study.
Some commenters express concern about FERC retaining jurisdiction
to issue permits within a National Corridor after the congestion
problem that motivated the Corridor has been resolved. However, as
discussed in Section I.A above, FERC has clarified that only those
transmission projects within a designated National Corridor that would
significantly reduce the congestion identified by DOE would be eligible
for a FERC permit. Therefore, even without an expiration date, a
National Corridor designation would not result in any exercise of
Federal permitting authority beyond that envisioned by Congress.
Nevertheless, in recognition of State concerns about open-ended
National Corridor designations, the Secretary has decided to condition
the Mid-Atlantic Area National Corridor designation by imposing a time
limit on it. Any such time limit, however, must balance State concerns
against the disruptive effect that regulatory uncertainty can have on
transmission investment. Given the time frames involved in planning and
developing a transmission project, the Secretary concludes that it is
appropriate to set a twelve-year term for the Mid-Atlantic Area
National Corridor designation, subject to the Department's right to
rescind, renew or extend the designation after notice and opportunity
for comment. Further, the Department does not intend to allow the
termination of the Mid-Atlantic Area National Corridor designation as
it may apply to an accepted permit application pending at FERC, or,
once FERC has granted a permit, during the period in which the approved
facilities are being constructed.
III. Southwest Area National Corridor (Docket No. 2007-OE-02)
A. Procedural Matters
The May 7 notice provided instructions on how to provide comments
and how to become a party to the proceeding in this docket. Consistent
with those instructions, the Department is granting party status in
this docket to all persons who either: (1) Filed comments
electronically at http://nietc.anl.gov on or before July 6, 2007; (2)
mailed written comments marked ``Attn: Docket No. 2007-OE-02'' to the
Office of Electricity Delivery and Energy Reliability, OE-20, U.S.
Department of Energy, 1000 Independence Avenue, SW., Washington, DC
20585, that were received on or before July 6, 2007; or (3) hand-
delivered written comments marked ``Attn: Docket No. 2007-OE-02'' at
one of the public meetings.
[[Page 57015]]
B. Overall Comments on the Draft Southwest Area National Corridor
The Department received comments from State agencies and officials
expressing a range of views about the draft Southwest Area National
Corridor. Arizona Governor Napolitano and the Arizona Corporation
Commission (ACC) both filed comments opposing designation of the draft
Southwest Area National Corridor. Nevada Agencies, filing comments on
behalf of the State of Nevada, oppose inclusion of Clark County in the
draft Southwest Area National Corridor.
The California Energy Commission (CEC) supported designation of the
draft Southwest Area National Corridor but recommended that the
Department develop a process to identify and protect environmentally
sensitive areas that are unsuitable for transmission. The California
Public Utilities Commission (CPUC) opposes designation of a Southwest
Area National Corridor that would include all of southern California.
However, CPUC notes that since the issuance of the May 7 notice, ACC
has rejected an application by Southern California Edison Company (SCE)
to construct the Devers-Palo Verde 2 project (DPV2),\105\ which,
according to CPUC, would increase transfer capability between the
desert Southwest and southern California and had already been approved
by the CPUC, the California Independent System Operator (CAISO),\106\
and the Arizona Power Plant and Transmission Line Siting Committee.
Thus, CPUC supports designation of a National Corridor that is more
narrowly targeted than the draft Southwest Area National Corridor, such
as a National Corridor along the Arizona section of the proposed DPV2
route.
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\105\ See Order Denying a Certificate of Environmental
Compatibility, ACC Dec. No. 69638 (June 6, 2007).
\106\ CAISO is the ISO serving most of California.
---------------------------------------------------------------------------
The Wyoming Infrastructure Authority (WIA) supports designation of
the draft Southwest Area National Corridor.
The Department received dozens of comments from individuals
opposing designation of the draft Southwest Area National Corridor.
Numerous non-profit organizations also filed comments opposing
designation.\107\ The Imperial Irrigation District (IID) opposed
designation of the draft Southwest Area National Corridor.
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\107\ See, e.g., comments of San Diego Renewable Energy Society
(SDRES) and the Sierra Club (Grand Canyon Chapter).
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The California Chamber of Commerce supported designation of the
draft Southwest Area National Corridor. A number of utilities also
filed comments supporting designation of the draft Southwest Area
National Corridor.\108\
---------------------------------------------------------------------------
\108\ See, e.g., comments of SCE, SDG&E, and Coral Power, LLC
(Coral); see also comments of EEI.
---------------------------------------------------------------------------
NERC filed comments stating that the ultimate designation of
National Corridors will further bolster the reliability of the grid.
The Transmission Expansion Policy Planning Committee of the Western
Electricity Coordinating Council (TEPPC) filed comments raising a
number of questions, but stated that it was not advocating for or
against the draft Southwest Area National Corridor.
C. Adequacy of Showing of Congestion That Adversely Affects Consumers
Summary of Comments
Numerous commenters argued that the Department had failed to make
the showing of congestion adversely affecting consumers required in
order to designate a Southwest Area National Corridor. Some of these
commenters took issue with the Department's position that it has the
discretion to designate the draft Southwest Area National Corridor upon
a showing of the existence of persistent congestion, without a further
demonstration of adverse effects on consumers. For example, ACC states
that DOE has not demonstrated adverse effects on consumers as required
by FPA section 216(a)(2). ACC argues that DOE has inappropriately
assumed that all persistent congestion harms the public interest and
that no evidence or analysis supports this broad, unfounded conclusion.
CPUC states that congestion and constraints do not, in and of
themselves, adversely affect consumers, and DOE must develop valid
criteria for measuring congestion and transmission constraints and show
how they impact consumers.\109\ TEPPC notes that the Congestion Study
did not provide an analysis of the economic benefits of relieving this
congestion. CPUC states that congestion costs over major transmission
inter-ties between southern California and Arizona/Nevada amounted to
about $30 million per year in 2006, a small fraction of the annualized
cost of a major transmission project.
---------------------------------------------------------------------------
\109\ See also comments of Colorado Public Utilities Commission
and OMS.
---------------------------------------------------------------------------
TEPPC questions whether the Western Area Power Administration
(WAPA) data on denial of transmission service requests cited in the May
7 notice reveal an actual lack of physical capacity as contrasted to a
contractual issue.
Some commenters argue that the Department has exaggerated the
significance of congestion into and within southern California. CPUC
states that the Congestion Study itself indicates that the major
transmission paths into southern California have recently been less
fully loaded than other Western transmission paths. TEPPC states that
the data in the Congestion Study do not support an unequivocal finding
of congestion on paths within the draft Southwest Area National
Corridor as compared to other paths within the Western Interconnection
and that CAISO data do not appear to show a clear pattern of congestion
over a number of years.
Other commenters supported the Department's showing of congestion
adversely affecting consumers in the Southern California Critical
Congestion Area. For example, SDG&E states that persistent congestion
adversely affects consumers because buyers must rely on power from
less-preferred generating sources, a smaller range of generators is
available, and the grid operators have fewer options for dealing with
unanticipated events.
DOE Response
The Department concludes that it has sufficiently demonstrated and
found the existence of congestion that adversely affects consumers in
the Southern California Critical Congestion Area. As discussed in
Section II.C above with regard to the Mid-Atlantic Area National
Corridor, congestion prevents users of the transmission grid from
completing their preferred power transactions, which in turn can deny
those users the benefit of lower prices, diversity of supply, and
increased grid operator flexibility, all to the detriment of consumers.
Loss of these benefits increases as congestion on a particular path
becomes more frequent. Thus, the Department believes that FPA section
216(a) gives the Secretary the discretion to designate a Southwest Area
National Corridor upon a showing of the existence of persistent
congestion.
Some commenters suggest that congestion into and within the
Southern California Critical Congestion Area does not adversely affect
consumers unless the costs of relieving the congestion are less than
the costs of the congestion itself. As discussed in Section II.C above,
the Department concludes that Congress intended the Department to
consider adverse effects on consumers beyond increases in the delivered
price of power, some of which effects may not be easily monetized.
Further, designation of a National Corridor does not dictate how or
even whether to address a particular instance of congestion. Therefore,
the Department
[[Page 57016]]
believes that restricting the term ``congestion that adversely affects
consumers'' to congestion that can be cost-effectively relieved is an
overly narrow reading of the statute.
The Department further concludes that it has adequately
demonstrated the existence of persistent congestion into and within the
Southern California Critical Congestion Area. The May 7 notice
identified data establishing the presence of existing constraints
causing patterns of congestion that have persisted over a number of
years. The data included line flow data revealing the presence of
congestion from 1999 through 2005 on a number of lines into and within
southern California, as well as CAISO data from 2004 through 2006
showing binding hours on paths into and within southern California. The
Department also noted that the modeling performed for the Congestion
Study projected that several historical constraints into and within
southern California would continue to cause congestion in 2008.
The WAPA data questioned by TEPCC are but one category of data used
in the May 7 notice to establish the presence of persistent congestion.
Further, for the same reasons that the Department does not see a need
to analyze the potential solutions to congestion at the National
Corridor designation stage, the Department does not believe it is
necessary at the National Corridor designation stage to analyze the
causes of persistent congestion. Regardless of whether congestion is
the function of power flows reaching operational limits or of capacity
being contractually committed yet unused, users of the transmission
system are denied the benefit of their preferred transactions. If FERC
jurisdiction under FPA section 216(b) were triggered, parties to the
FERC proceeding could raise any concerns they had about the contractual
nature of the congestion and whether market operation alternatives
would be preferable to the construction of additional capacity.
Moreover, while the Department concludes that the statute
authorizes the designation of a Southwest Area National Corridor upon a
finding of the existence of persistent congestion, the Department
nevertheless has provided additional documentation. In the context of
explaining the considerations that led to the draft designation of the
Southwest Area National Corridor, the Department documented that
congestion poses threats to the reliability of electricity supply to
consumers in the Southern California Critical Congestion Area, and that
congestion limits supply diversity for Southern California Critical
Congestion Area consumers. For example, the May 7 notice explained that
CAISO has determined that the San Diego area is projected to be
deficient in overall generation capacity by the year 2010 due to severe
import limits, and that there are looming reliability problems on the
South of Lugo path, a major CAISO internal path that serves the Los
Angeles Basin.
Some commenters complain that pathways into and within southern
California are less congested than other paths in Western
Interconnection and that the Department has failed to develop specific
criteria and metrics for evaluating the significance of congestion.
However, the relative level of congestion into and within southern
California as compared to other paths in the Western Interconnection is
not dispositive of whether consumers are adversely affected by
congestion. FPA section 216(a) does not require the Department to rank
different levels of congestion, nor does it restrict the Department to
considering National Corridor designation only in those areas
experiencing the highest levels of congestion. FPA section 216(a)(2)
authorizes the Department to designate as a National Corridor ``any
geographic area experiencing electric energy transmission capacity
constraints or congestion that adversely affects consumers.'' While
some of the metrics used in the Congestion Study do suggest that the
level of congestion on paths into and within southern California is
lower than on other paths in the Western Interconnection, congestion
into and within southern California is a precursor of a serious
reliability problem. This serious threat to the reliability of
electricity supply to the Southern California Critical Congestion Area
constitutes an adverse effect on consumers that, in conjunction with
other factors discussed here, warrants consideration of a National
Corridor designation.
In conclusion, far from simply assuming the presence of congestion
that adversely affects consumers, as some commenters allege, the
Department has made a reasoned determination that the statutory
conditions triggering discretion to designate a National Corridor for
the Southern California Critical Congestion Area have been met.
D. Boundaries of the Draft Southwest Area National Corridor
Summary of Comments
Numerous commenters argued that the draft Southwest Area National
Corridor is impermissibly broad. ACC argues that DOE's source-and-sink
approach to delineating the draft Southwest Area National Corridor is
insufficient under the statute. Governor Napolitano states that DOE
should revisit its broad-brush approach and consider adopting a more
targeted method for defining a National Corridor. CPUC states that
designation of a National Corridor as broad as the draft Southwest Area
National Corridor would provide a basis for second-guessing, forum-
shopping, and re-litigation of decisions regarding complex issues. CPUC
also states that while the focus of FPA section 216(a) is on interstate
transmission, more than 48,000 square miles of the draft Southwest Area
National Corridor falls within California alone. CPUC states that the
prospect of Federal transmission siting over this in-State area
effectively trumps California's ability to establish and pursue its own
energy goals. CPUC states that any National Corridor to address
congestion in the Southern California Critical Congestion Area should
be more narrowly focused on connecting specific sink nodes with
specific supply nodes, such as along the proposed DPV2 route.
IID states that DOE cannot reasonably assert that designation of an
area as large as the draft Southwest Area National Corridor complies
with FPA section 216(a), which limits designation of National Corridors
to constrained areas. IID states that DOE should tailor its designation
to locations where congestion problems truly exist, such as along Path
42 between IID's system and SCE's system. Citizens Campaign for the
Environment supports limiting the Southwest Area National Corridor to
only those lines and substations that are critically congested and
constrained.
The Colorado Public Utilities Commission suggests DOE reclassify
the draft Southwest Area National Corridor as a ``Zone'' and then
designate narrower paths of specific widths and lengths within this
Zone as National Corridors.
Some commenters suggested redrawing National Corridor boundaries so
as to follow existing transmission lines or highways.\110\
---------------------------------------------------------------------------
\110\ See, e.g., comments of William Haven.
---------------------------------------------------------------------------
Nevada Agencies believes that the Department has failed to
adequately support the inclusion of Clark County, Nevada in the draft
Southwest Area National Corridor. Nevada Agencies states that the
Congestion Study did not identify any portion of Clark County as part
of either a Critical Congestion Area or a Congestion Area of Concern,
and the May 7 notice identified Arizona, not
[[Page 57017]]
Nevada, as a source area. Nevada Agencies argues that the Department's
only rationale for including Clark County is the statement that it
would be useful to think of the transmission facilities around Mead as
closely related to those around Palo Verde; however, according to
Nevada Agencies, Palo Verde and Mead are considered two separate and
distinct trading hubs. Thus, Nevada Agencies argues that the Department
has bootstrapped Clark County into the draft Southwest Area National
Corridor in violation of the statute.
Some commenters objected to the Department's use of county
boundaries to delineate the outer bounds of the draft Southwest Area
National Corridor. For example, Governor Napolitano states that Arizona
counties are some of the largest in the country.\111\
---------------------------------------------------------------------------
\111\ See also comments of Nevada Agencies.
---------------------------------------------------------------------------
Other commenters supported the Department's approach to delineating
the boundaries of the draft Southwest Area National Corridor. For
example, EEI states that DOE has properly delineated the draft
Southwest Area National Corridor as a general, inclusive geographic
area, and adds that if utility, State, or regional agency staff
indicate that the margins of the draft Southwest Area National Corridor
need to be modified to encompass potential solutions, DOE should make
such modifications so that a full array of solutions is considered.
DOE Response
The Department concludes that its general approach to defining the
boundaries of the draft Southwest Area National Corridor is consistent
with the statute. As discussed in Section II.D above, the language of
FPA section 216(a), which refers to designation of a ``geographic
area,'' does not dictate any particular shape, proportion, or size for
a National Corridor, and the Department's approach to delineating
right-of-way corridors under EPAct section 368 does not inform the
delineation of National Corridors under FPA section 216(a). Further, to
the extent that common meanings and usage of the term ``corridor'' are
relevant to the determination of a National Corridor under FPA section
216(a), the overall size and shape of the draft Southwest Area National
Corridor are not inconsistent with such meanings and usage.
Some commenters have suggested that the statute should be
interpreted as restricting any National Corridor designation to the
specific confines of the load being adversely affected by congestion or
the constrained transmission lines causing such congestion. For the
reasons detailed in Section II.D above, the Department disagrees with
this interpretation. The term ``geographic area experiencing electric
energy transmission capacity constraints or congestion that adversely
affects consumers'' envisions an area that encompasses the load being
adversely affected by congestion and the constrained transmission lines
causing such congestion, but the statute is ambiguous with regard to
the precise scope of the area. The Department believes its source-and-
sink approach to delineating the boundaries of the draft Southwest Area
National Corridor represents a reasonable interpretation of this
ambiguous statutory term.
As with the Mid-Atlantic Area National Corridor, in implementing
its source-and-sink approach to delineating the draft Southwest Area
National Corridor, the Department has attempted to identify source
areas that would enable a range of generation options. In exercising
its judgment as to which source areas to use for purposes of
delineating the draft Southwest Area National Corridor, the Department
was guided by several factors. The Department has tried to balance the
objective of accommodating a range of options against the practical
limitations on delivery of power over increasingly longer distances.
The Department has also taken into consideration State concerns about
the size of any Southwest Area National Corridor as well as the fact
that Congress opted for a limited approach to Federal preemption of
transmission siting. The Department has been further guided by the
considerations identified in FPA section 216(a)(4). Finally, consistent
with the language of FPA section 216(a)(2) referring to designation of
a geographic area experiencing constraints or congestion that adversely
affects consumers, the Department has restricted its selection of
source areas to those separated from the identified sink area, i.e. the
Southern California Critical Congestion Area, by one or more of the
constraints identified in Section IX.B of the May 7 notice as causing
congestion adversely affecting consumers.
The result of this analysis was the identification of two
categories of source areas: (1) The closest locations with substantial
amounts of existing, under-used generation capacity separated from the
identified sink area by one or more of the constraints identified as
causing congestion adversely affecting consumers; and (2) the closest
locations with the potential for substantial development of wind,
geothermal, or solar generation capacity separated from the identified
sink area by one or more of the constraints identified as causing
congestion adversely affecting consumers. Identification of the first
category is consistent with FPA section 216(a)(4)(A), which emphasizes
the importance of ensuring adequate supplies of power. Identification
of the second category is consistent with FPA section 216(a)(4)(B),
which emphasizes diversification of supply, and FPA section
216(a)(4)(C), which emphasizes promotion of energy independence.
Having identified source areas, the Department then delineated the
draft Southwest Area National Corridor by identifying the counties
linking the identified source areas with the sink area.\112\ While the
Department recognizes that counties are generally larger in the West
than in the East, we continue to believe in the importance of
establishing precise, easily identified boundaries for the Southwest
Area National Corridor. Thus, we conclude that use of county boundaries
is a reasonable means of providing such certainty.
---------------------------------------------------------------------------
\112\ ACC and CPUC note that certain plants identified as
potential sources in Table IX-4 of the May 7 notice were not
actually included within the draft Southwest Area National Corridor.
In recognition of concerns about the size of National Corridors, DOE
chose not to include each entire identified source area in the draft
Southwest Area National Corridor. Instead, for source areas located
where the transmission grid is already relatively strong, the
Department extended the draft Southwest Area National Corridor only
so far into those source areas as needed to encompass one or more
possible strong points on the transmission network that serves those
areas.
---------------------------------------------------------------------------
The Department's approach to delineating the draft Southwest Area
National Corridor was designed to connect the sink area containing
consumers adversely affected by congestion with a range of source areas
separated from the identified sink area by the constraints causing such
congestion. Given the overall framework of FPA section 216 and the
physical properties of the electric grid, the Department concludes that
this approach is consistent with the statutory call for the designation
of a ``geographic area experiencing electric energy transmission
capacity constraints or congestion that adversely affects consumers.''
However, upon further consideration, the Department concludes that
inclusion of Clark County, Nevada in the Southwest Area National
Corridor is not consistent with this approach. Nevada Agencies
correctly note that the May 7 notice did not identify Clark County as
either a sink area, a source area, or an area containing a constraint
separating an
[[Page 57018]]
identified sink area from an identified source area. Rather, the May 7
notice stated that the Hoover Dam area southeast of Las Vegas, Nevada
and the area around Palo Verde, Arizona are the two principal portals
for transferring bulk power from the east into southern California, and
that from a transmission planning and operational perspective, it is
useful to think of these two pathways as closely related. As Nevada
Agencies point out, the area around Las Vegas is experiencing
tremendous growth. This growth could result in congestion that may at
some future date warrant expansion of the Southwest Area National
Corridor or designation of additional National Corridors in the
Southwest. For now, though, the Department has decided to exclude Clark
County, Nevada from today's Southwest Area National Corridor
designation.
Some commenters complain that the draft Southwest Area National
Corridor fails to provide adequate specificity on appropriate
transmission solutions and suggest that the Department should go back
to the drawing board to determine narrower routes linking specific
sources and sinks. However, the Department is deliberately not
attempting to identify preferred transmission solutions. As discussed
in Section I.A above, FPA section 216(a) was not intended to shift to
the Department the roles of electric system planners or siting
authorities.
The Department recognizes the concerns about unintended expansion
of Federal siting authority to include proposed transmission projects
that happen to be located within the Southwest Area National Corridor
but are unrelated to the problem that prompted the National Corridor
designation. However, as discussed in Section II.D above, only those
transmission projects within the Southwest Area National Corridor that
would significantly reduce congestion into the Southern California
Critical Congestion Area would be eligible for a FERC permit.
Therefore, the Department does not believe that designation of the
draft Southwest Area National Corridor, modified to exclude Clark
County, Nevada, will result in the exercise of Federal permitting
authority beyond that envisioned by Congress. Finally, while CPUC
questions the Department's authority to designate a National Corridor
when a large portion of that Corridor lies within a single State, the
Department notes that courts have long recognized the inherently
interstate nature of transmission, even transmission within one
State.\113\
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\113\ See FPL, 404 U.S. at 462.
---------------------------------------------------------------------------
E. Inclusion of Environmentally, Historically, and Culturally
Significant Lands
Summary of Comments
Many commenters argued that the Department should exclude National
Parks, State parks, and other environmentally, historically, or
culturally significant lands from any Southwest Area National Corridor.
For example, CEC argues that certain ``no-touch zones'' should be
established so that environmental impacts and controversies can be
avoided. Governor Napolitano expresses concern about the sensitive
wildlife areas included in the draft Southwest Area National Corridor.
NPCA opposes inclusion of any unit of the National Park System in the
Southwest Area National Corridor. Numerous commenters urged the removal
of Death Valley National Park, Joshua Tree National Park, and Anza
Borrego State Park from the draft Southwest Area National
Corridor.\114\
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\114\ See, e.g., comments of Polly Pistker, Steven Ellsworth,
Claudia Sall, and Vivian Hopkins, and statement of Peter Frigeri at
June 20, 2007, Las Vegas, NV public meeting.
---------------------------------------------------------------------------
DOE Response
For the reasons detailed in Section II.E above, the Department
concludes that exclusion of environmentally, historically, or
culturally sensitive lands from the Southwest Area National Corridor is
neither required nor necessary. Nothing in the statute suggests that
the Department must or should exclude such lands. With regard to
Federal- and State-owned land, inclusion of such lands within the
Southwest Area National Corridor does nothing to change the process for
obtaining a right-of-way across such property. With regard to
environmentally, historically, or culturally sensitive lands that are
not owned by the U.S. or a State, the Department notes that designation
of the Southwest Area National Corridor is not a determination that
transmission will or should be built; it does not constitute, advocate,
or guarantee approval of any transmission project; and it is not a
determination of the route of any transmission project. If FERC
jurisdiction under FPA section 216(b) were triggered, FERC would
conduct an evaluation of the reasonably foreseeable effects of
transmission construction on any environmentally, historically, or
culturally significant lands, including an analysis of alternative
routes and mitigation options. To the extent that any Federal laws do
limit or prohibit construction of transmission facilities in certain
areas, FERC is bound by those limitations or prohibitions. Further,
exclusion of environmentally, historically, or culturally sensitive
lands, whether public or private, could unduly restrict existing
flexibility in siting transmission facilities, and the Department sees
no reason to conclude that Congress intended such a result.
F. Consideration of Alternatives Under FPA Section 216(a)(2)
Summary of Comments
Several commenters argue that the Department should evaluate non-
transmission solutions to congestion before designating the Southwest
Area National Corridor. Many of these commenters argued that FPA
section 216(a)(2) requires such an evaluation. For example, ACC states
that designation of a Southwest Area National Corridor would tip the
market toward transmission solutions by dampening or extinguishing
market signals for other solutions, such as constructing generation
close to load centers, that may better serve the public interest.
DOE Response
For the reasons set forth in Section II.F above, the Department
concludes that no analysis of alternative solutions to congestion is
required or warranted under FPA section 216(a) before designation of
the Southwest Area National Corridor. While FPA section 216(a)(2) calls
for the Secretary to consider ``alternatives and recommendations from
interested parties'' before making a National Corridor designation, the
Department concludes that, given the overall statutory framework, this
term was intended to refer to comments suggesting National Corridor
designations for different congestion or constraint problems, comments
suggesting alternative boundaries for specific National Corridors, and
comments suggesting that the Department refrain from designating a
National Corridor. Moreover, as discussed in Section I.A above,
designation of the Southwest Area National Corridor does not prejudice
State or Federal siting processes against non-transmission solutions or
discourage market participants from pursuing such solutions.
G. Whether DOE Should Exercise Its Discretion To Designate the Draft
Southwest Area National Corridor
Summary of Comments
Several commenters agreed with the May 7 notice's analysis that
reliability,
[[Page 57019]]
supply diversity, and national defense and homeland security
considerations warrant the exercise of the Secretary's discretion to
designate a Southwest Area National Corridor. For example, CEC supports
the Department's conclusion that one of the consequences of congestion
in southern California is heightened dependence on natural gas for the
generation of electricity. The California Chamber of Commerce argued
that designation of the draft Southwest Area National Corridor would
help ensure reliability, noting that power failures that occur in
California may affect neighboring States. SDG&E states that southern
California has been subject to severe reliability impacts in recent
years, and these impacts are likely to continue if congestion is not
addressed. SDG&E adds that reliable power supplies for the Navy and
Marine Corps bases in San Diego County are critical from a national
security standpoint, and that the need for increased transmission
access to meet California's portfolio diversity targets is self-
evident. SCE states that resolving congestion into and within the
Southern California Critical Congestion Area is not only vital for
California and its residents, it is important for the region and the
Nation as a whole. WIA urges the Department to consider broader
National Corridor designations in the Western Interconnection, but
supports designation of the draft Southwest Area National Corridor as a
first step, given that it addresses a relatively discrete area that,
according to WIA, is beyond any reasonable doubt experiencing
congestion adversely affecting consumers.
Other commenters argued that designation of the draft Southwest
Area National Corridor is not warranted. ACC argues that reliability
considerations do not necessarily warrant designation of the draft
Southwest Area National Corridor, because adding generation close to
load centers can be preferable from a reliability perspective to adding
new transmission accessing remote generation. ACC further states that
differences in LMPs between California and Arizona may not reflect an
``apples to apples'' comparison of costs, in light of the different
market structures in place in those two States. Therefore, according to
ACC, the presence of higher LMPs in California than in Arizona does not
necessarily indicate that California consumers are being harmed, and
efforts to reduce such price differences could result in subsidies to
California consumers at the expense of Arizona consumers.
Some commenters raised equity concerns. Governor Napolitano states
that the draft Southwest Area National Corridor improperly focuses
solely on the energy needs of California. ACC states that Arizona's
economy is as important to the Nation as that of California, and that
designation of the draft Southwest Area National Corridor would
unfairly require Arizona to provide resource adequacy for California.
ACC states that Arizona has no resource advantages for siting gas-fired
generation compared to California, yet California has failed to site
sufficient generation to meet its needs. ACC argues that California
should not be allowed to rely on Arizona generation when the cost of
externalities would be borne by Arizona consumers. ACC notes that
Arizona's population has grown 20.2 percent since 2000, with Maricopa
County being the fastest growing county in the Nation. As a result, ACC
argues, any current excess generation in Arizona will actually be
needed within the State by 2010.
IID states that designation of the draft Southwest Area National
Corridor could have a significant adverse impact upon Imperial County's
agricultural businesses and desert ecosystem. Individuals residing
within the draft Southwest Area National Corridor but away from the
sink area argued that designation of the draft Southwest Area National
Corridor would require them to bear an unfair burden.\115\
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\115\ See, e.g., comments of Albert Coonrod, Jr. (``[P]ush CA to
solve their own needs in their own state and stay out of AZ.'') and
John Batka (``Perhaps California should start building power plants
again. Don't string a lifeline electric grid from the Palo Verde
Nuclear Generating Station to support their growing population.'');
see also statement of Tom Wray at June 21, 2007, Phoenix, AZ public
meeting.
---------------------------------------------------------------------------
Some commenters argued that the Department should accord more
deference to existing State and regional planning and siting processes
and hold off on any designation of a Southwest Area National Corridor
until and unless it is clear that a Federal siting forum is needed. ACC
argues that Federal intervention is unnecessary unless State and
regional processes are not addressing the problem in a timely manner.
ACC states that if State siting processes are efficient, transparent,
and responsive to the market, as ACC asserts its process is, the
Secretary should not designate a National Corridor. Governor Napolitano
states that Arizona agencies and utilities have a strong record of line
siting and infrastructure planning, in contrast to California, and that
designation of the draft Southwest Area National Corridor would create
great uncertainty in State and local efforts to plan for growth,
infrastructure, and protection of natural resources.\116\
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\116\ See also comments of IID and SDRES.
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On the other hand, some commenters urged the Department against
deferring designation of the draft Southwest Area National Corridor.
For example, Coral states that provision of a Federal backstop is
necessary to solve the congestion problems into and within the Southern
California Critical Congestion Area and to assist California in meeting
demand within the State. Coral argues that the mere possibility that
FERC could step in and approve or reject siting proposals in the draft
Southwest Area National Corridor may itself provide the necessary
incentive for the States to find a common solution. But, according to
Coral, if the States fail to do so, FERC, removed from local pressures,
will be able to make the hard decisions that the States have been
unable to make. SCE states that designation of the draft Southwest Area
National Corridor will focus both State and local efforts on the
resolution of key congestion issues.
DOE Response
The Department recognizes that FPA section 216 adopted a novel
approach to addressing congestion problems, and that some commenters
have grave concerns about the effects of this new approach. However,
after careful consideration of these concerns, the Department concludes
that designation of the draft Southwest Area National Corridor,
modified to exclude Clark County, Nevada, is consistent with the intent
of FPA section 216(a).
A number of the comments seem premised on the assumption that
designation of a Southwest Area National Corridor would create a bias
in favor of long transmission lines running the full length of the
Corridor, and in particular long transmission lines connecting to
generation located in Arizona. The Department regards such an
assumption as unfounded. As discussed in Section I.A above, a National
Corridor designation does not constitute a finding that transmission
must or even should be built; it does not prejudice State or Federal
siting processes against non-transmission solutions; and it should not
discourage market participants from pursuing such solutions. Further,
even within the realm of potential transmission solutions, designation
of a Southwest Area National Corridor would not favor any particular
transmission project within the Corridor. While the Department did
identify source areas in Arizona when it delineated the draft
[[Page 57020]]
Southwest Area National Corridor, such delineation was not a
determination that transmission lines connecting those particular
source areas to the sink area must or should be built, or that such
projects are preferable to other transmission projects. The
Department's identification of source areas was a means of setting an
outer bound on the geographic range of potential transmission projects
that could become subject to FERC jurisdiction. Designation of a
Southwest Area National Corridor no more dictates or endorses the
construction of transmission lines to access generation in the
identified source areas in Arizona than it does the construction of
transmission lines to access the identified source areas in California.
If a transmission project were proposed within the Southwest Area
National Corridor to deliver generation to the Southern California
Critical Congestion Area from somewhere other than the identified
source areas, the developer of the project would be eligible to seek a
FERC permit, provided it met the standards of FPA section 216(b). The
Department sees no reason to conclude that designation of a Southwest
Area National Corridor would discourage any such projects.
Given that designation of a Southwest Area National Corridor does
not determine whether or which transmission projects will be built,
ACC's concerns about the reliability effects of constructing
transmission accessing remote generation are not germane at this stage.
If FERC jurisdiction under FPA section 216(b) were triggered, FERC
would analyze and take into consideration the reasonably foreseeable
effects of a proposed project, including the reliability impacts.\117\
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\117\ See FERC Order No. 689, 71 FR 69,440, 69,446, 117 FERC ]
61,202 at P 41 (``[The Commission] will investigate and determine
the impact the proposed facility will have on the existing
transmission grid and the reliability of the system.'').
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With regard to comments about the equities of building transmission
to access generation in one area to serve the needs of another area,
the Department recognizes that consideration of the relative effects
that a proposed project will have on the areas where the facilities are
located versus the areas served by those facilities is critically
important. However, how a transmission line actually affects a
community through which it is routed is a function of how the line is
sited and how the costs of the transmission line are allocated, neither
of which is determined by a National Corridor designation.\118\ If FERC
jurisdiction under FPA section 216(b) were triggered, FERC would
consider the reasonably foreseeable effects of the proposed project on
the communities through which it is proposed to be routed.\119\
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\118\ As discussed in the May 7 notice, cost allocation for
transmission facilities is a long-standing FERC function.
\119\ See, e.g., FERC Order No. 689, 71 FR 69,440, 69,446, 117
FERC ] 61,202 at P 42 (``The Commission will also consider the
adverse effects the proposed facilities will have on land owners and
local communities.''); see also id., 71 FR 69,440, 69,456-57, 117
FERC ] 61,202 at P 150 (applicant required to provide information
concerning the impact of the proposed project on the towns and
counties in the vicinity of the project).
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Although ACC argues that efforts to reduce power price differences
between California and Arizona could result in subsidies to California
consumers at the expense of Arizona consumers, the Department's
designation of a Southwest Area National Corridor is not motivated by
price differentials between California and Arizona. In the May 7
notice, the Department specifically identified the considerations that
it believed warranted designation of the draft Southwest Area National
Corridor. The Department documented that if action is not taken to
address congestion, consumers in the Southern California Critical
Congestion Area face threats to the reliability of their electricity
supply. The Department also documented that congestion exacerbates the
reliance of consumers in the Southern California Critical Congestion
Area on generation fueled by natural gas. Finally, the Department
described the importance of the Southern California Critical Congestion
Area to the security and economic health of the Nation as a whole.
Thus, the Department stated its belief that reliability, supply
diversity, and national defense and homeland security considerations
warrant designation of a National Corridor for the Southern California
Critical Congestion Area; the Department did not identify higher prices
in southern California as a consideration justifying designation of a
Southwest Area National Corridor.\120\
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\120\ Similarly, the Department's showing of the existence of
congestion adversely affecting consumers in the Southern California
Critical Congestion Area does not rely on the presence of price
differentials between southern California and Arizona. The May 7
notice detailed the data on which the Department is relying to
establish the presence of congestion that adversely affects
consumers. Those data included line flow data revealing the presence
of congestion from 1999 through 2005 on a number of lines into and
within southern California, as well as CAISO data from 2004 through
2006 showing binding hours on paths into and within southern
California. The Department did note that the modeling performed for
the Congestion Study projected that several historical constraints
into and within southern California would continue to cause
congestion in 2008, and the Congestion Study modeling did quantify
projected congestion rents derived from estimated LMP differences.
However, congestion rents were only one of the metrics used in the
Congestion Study modeling; in the May 7 notice, the Department
emphasized the modeling's projection of U75 and U90 for pathways
into and within southern California.
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ACC also argues that the rate of load growth in Arizona warrants
elimination of Arizona from the draft Southwest Area National Corridor.
However, as discussed above, designation of a Southwest Area National
Corridor does not dictate or guarantee that transmission lines will be
built to export power from Arizona to California. The Department
included three counties in Arizona within the draft Southwest Area
National Corridor because those counties have access to currently
available excess generation capacity.\121\ If load growth in Arizona
were to result in all existing generation capacity in the State, as
well as all additional capacity coming on line in Arizona, being
unavailable for export to California, that development would be taken
into consideration by market participants evaluating their economic
incentives to build a transmission project to facilitate such exports.
Such a development would likely also be relevant in any FERC permit
proceeding, given FPA section 216(b)(4)'s requirement that any project
authorized by FERC must benefit or protect consumers. The Department
recognizes the growing needs of Arizona consumers, and, in fact,
identified the Tucson-Phoenix area as a Congestion Area of Concern in
the Congestion Study. The growing demand in Arizona and the resulting
growing congestion may at some future date warrant expansion of the
Southwest Area National Corridor or designation of additional National
Corridors in the Southwest. However, given the urgency of addressing
the reliability threats facing consumers in the Southern California
Critical Congestion Area and State concerns over the designation of
broad National Corridors, the Department believes that designation of
the draft Southwest Area National Corridor, modified to exclude Clark
[[Page 57021]]
County, Nevada, is an appropriate first step.
---------------------------------------------------------------------------
\121\ We further note that as market participants consider
development of new coal/wind generation and transmission capacity in
Wyoming and other areas beyond Arizona, the Phoenix area has the
potential to become even more important than it is now as a trans-
shipment point for electricity headed for urban centers in southern
California. See, e.g., ``High Plains Express Transmission Study
Joined by the Wyoming and New Mexico Transmission Authorities,''
Denver Business News, Aug. 15, 2007, at http://denver.dbusinessnews.com/shownews.php?newsid=129768&type&_news=latest
.
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Some commenters urge us to defer any designation of a Southwest
Area National Corridor until State and regional planning efforts have
had more time to address the congestion problems. These commenters
provide details on the purported effectiveness of State and regional
planning processes. As discussed in Section II.G above, we do not
believe that Congress envisioned the adoption of a wait-and-see
approach to National Corridor designation.
The Department strongly supports State and regional efforts to
collectively address the congestion problems confronting the region,
whether those efforts are focused on transmission solutions, non-
transmission solutions, or a combination of both. Despite the
assertions of some commenters, the Department does not believe that
designation of the Southwest Area National Corridor necessarily will
disrupt ongoing State or regional planning processes. As discussed in
Section I.A above, a National Corridor designation itself does not
preempt State authority or any State actions. Thus, States retain the
authority to work together to address aggressively the congestion
problems confronting the region. Further, we expect utilities within
the Southwest Area National Corridor to continue to work cooperatively
with State and local authorities. We note that FERC has indicated that
it will consider any allegations that an applicant has acted in bad
faith in State proceedings when it reviews permit applications under
FPA section 216(b)(1)(C)(i).
State and regional efforts may well resolve the congestion problems
afflicting the Southern California Critical Congestion Area without any
invocation of Federal review. However, as the May 7 notice documented,
reliability, supply diversity, and national defense and homeland
security considerations all warrant designation of a Southwest Area
National Corridor.\122\ Given the increasingly interconnected nature of
the transmission grid and wholesale power markets, siting of
electricity infrastructure poses increasingly complex questions about
how to balance equitably all competing interests. Tensions can exist
between what is perceived to be best for a region as a whole versus
what is perceived to be best for an individual State or an individual
portion of one State. National Corridor designation provides, in a
defined set of circumstances, a potential mechanism for analyzing the
need for transmission from a national, rather than State or local,
perspective. The comments the Department has received on the draft
Southwest Area National Corridor reveal the presence of the kind of
tensions that prompted Congress to create such a mechanism. The
Department acknowledges that designation of a Southwest Area National
Corridor introduces a significant new possibility into the process of
siting transmission, and that the existence of this possibility may
pose challenges for States and may ultimately prove unnecessary.
However, given the totality of the circumstances, including the
presence of looming reliability violations and the significance of the
Southern California Critical Congestion Area to the security and
economic health of the Nation as a whole, the Department concludes that
it would be inconsistent with the intent of FPA section 216(a) to
withhold the Federal safety net of National Corridor designation.\123\
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\122\ See May 7 notice, Section IX.C.
\123\ Further, whereas Congress could have completely preempted
State siting of interstate transmission facilities, allowing for the
potential exercise of limited Federal preemption in accordance with
FPA section 216(a) does not intrude on any State rights or
prerogatives.
---------------------------------------------------------------------------
In sum, having found the presence of congestion that adversely
affects consumers in the Southern California Critical Congestion Area,
the Secretary has the discretion to designate a National Corridor. The
Secretary concludes, based on the totality of the information
developed, taking into account relevant considerations, including the
considerations identified in FPA section 216(a)(4), as appropriate,
that exercise of his discretion to designate the draft Southwest Area
National Corridor, modified to exclude Clark County, Nevada, is
warranted.
H. Duration of the Southwest Area National Corridor Designation
Summary of Comments
Several commenters, including CPUC and Nevada Agencies, objected to
setting a twelve-year term for the Southwest Area National Corridor.
For example, NARUC opposes the use of a twelve-year term as
inconsistent with the statute. NARUC argues that the requirement that
the Department conduct a congestion study every three years indicates
that the factual basis for National Corridors must be reexamined and
updated every three years, and, thus, only a three-year term, subject
to three-year extensions, is permissible. NARUC states that use of a
twelve-year term could easily result in a designation remaining in
place long after congestion issues have been resolved.\124\
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\124\ See also comments of Citizens Campaign for the Environment
and The Wilderness Society.
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DOE Response
For the reasons discussed in Section II.H above, the Department
concludes that imposition of a time limit on the Southwest Area
National Corridor designation is not required by law. Nevertheless, in
recognition of State concerns about open-ended National Corridor
designations, as balanced against the disruptive effect that regulatory
uncertainty can have on transmission investment, the Department has
decided to set a twelve-year term for the Southwest Area National
Corridor designation, subject to the Department's right to rescind,
renew or extend the designation after notice and opportunity for
comment. Further, the Department does not intend to allow the
termination of the Southwest Area National Corridor designation as it
may apply to an accepted permit application pending at FERC, or, once
FERC has granted a permit, during the period in which the approved
facilities are being constructed.
IV. NEPA, NHPA, and ESA
A. Overview of Comments on NEPA
Summary of Comments
Several commenters, including PHI, PJM, WIRES, EEI and National
Grid, asserted that the Department is not required to prepare an
Environmental Impact Statement (EIS) or conduct other NEPA review for
the designation of National Corridors. Many other commenters asserted
that the Department should conduct a Programmatic EIS (PEIS) before
designating any National Corridors because designation itself requires
NEPA review.\125\
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\125\ See, e.g., comments of ECCP, Environmental Defense,
National Trust for Historic Preservation, Columbia Environmental Law
Clinic, SELC, Sierra Club (Pennsylvania Chapter), Western
Pennsylvania Conservancy, Toll Bros., CARI, Appalachian Trail
Conservancy, NCPA, Wilderness Society, NYDEC, and Piedmont
Environmental Council; see also statement of Tom Darin at May 17,
2007, San Diego, CA public meeting.
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DOE response
Section 102(2)(C) of NEPA requires that all Federal agencies
include an EIS for ``every recommendation or report on proposals for
legislation and other major Federal actions significantly affecting the
quality of the human environment.'' 42 U.S.C. 4332(2)(C). NEPA section
102(2)(C) ensures that Federal agencies provide full and fair
discussion of significant environmental impacts and
[[Page 57022]]
informs decision makers and the public of reasonable alternatives that
would avoid or minimize adverse impacts or enhance the quality of the
human environment. NEPA review is designed to examine the foreseeable,
measurable, and predictable consequences of a proposed Federal action;
it is not intended to forecast hypothetical or unknowable proposals or
results. National Corridor designations have no environmental impact.
They are only designations of geographic areas in which DOE has
identified electric congestion or constraint problems.
B. Federal Plan/Program
Summary of Comments
Several commenters asserted that NEPA review is required because
the designation of National Corridors is part of a continuing agency
action constituting a new Federal scheme, program, or policy to site
transmission projects. They argue that the Council on Environmental
Quality regulations implementing NEPA require that EISs be prepared for
broad Federal actions such as the adoption of new agency programs or
for a group of concerted actions to implement a specific policy or
plan. They also suggest that DOE and FERC are acting jointly to effect
the single goal of establishing transmission projects.
DOE Response
The designation of the Mid-Atlantic Area National Corridor and the
Southwest Area National Corridor is not part of a group of concerted
agency actions to implement a Federal scheme or program of siting
transmission projects. These two National Corridors, and any potential
future National Corridors, have been designated for reasons unrelated
to each other. Not only is each of the National Corridors being
designated today manifestly separate and distinct in size and location,
but also different considerations led to the designation of each of
them. For example, economic development and energy independence
considerations played a role in the Department's decision to designate
the Mid-Atlantic Area National Corridor but were not factors in the
decision to designate the Southwestern Area National Corridor.
These National Corridor designations are not part of a unitary
agency action taken jointly by DOE and FERC. As specified by statute,
and described in Section I.A., the factors that FERC will consider when
reviewing any application to construct transmission facilities are
different from the factors that DOE has considered in designating
National Corridors. Although DOE's designations allow FERC to assert
jurisdiction in specified circumstances to permit transmission
projects, DOE and FERC have separate and distinct statutory obligations
and objectives. Congress expressly authorized DOE to identify
congestion, and authorized FERC to review permit applications under FPA
section 216(b).
C. Authorization for Future Action
Summary of Comments
Several commenters stated that NEPA review is required whenever an
agency makes a decision that permits some other party, whether private
or governmental, to take action affecting the environment. Commenters
claimed that NEPA review is required here because DOE's decision to
designate National Corridors provides FERC with jurisdiction to site
transmission projects and gives applicants who receive construction
permits for transmission projects the authority to exercise the right
of eminent domain, without DOE approval, within the National Corridors.
DOE Response
The designation of National Corridors is not a precondition to
siting transmission projects. In particular, designation is not a
prerequisite for anyone taking actions with environmental consequences
within National Corridors. Designation gives no permission nor
establishes any entitlement to construct a transmission project. States
can still permit transmission facilities, just as they have always
done. As described in Section I.A., FPA section 216(g) contemplates
continued State action: ``Nothing in this section precludes any person
from constructing or modifying any transmission facility in accordance
with State law.'' Although FPA section 216(b) establishes a new and
additional potential procedural forum for transmission applicants,
designation of National Corridors does not in itself authorize
development of transmission projects that could not otherwise be built.
D. Ability To Preclude Surface-Disturbing Activity
Summary of Comments
Commenters asserted that an agency cannot delay NEPA review unless
the agency reserves the ability to prevent surface-disturbing
activities at a later stage. These commenters claimed that after
designation of a National Corridor, DOE loses the ability to preclude
surface-disturbing activity because permitting authority is in the
exclusive control of FERC after designation.
DOE Response
As provided in the Ordering Paragraphs in Section V below, the
Department is explicitly reserving the right to rescind, renew or
extend the designations or modify the scope of the designations, should
circumstances so require.\126\
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\126\ Any such change in a National Corridor designation would
be made only after notice and opportunity for public comment.
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E. Bias in Favor of Transmission Solutions
Summary of Comments
Certain commenters, including the Sierra Club (National), Sierra
Club (Grand Canyon Chapter), and West Virginia Environmental Council
stated that the May 7 notice understated the likelihood that National
Corridor designation will lead to widespread FERC permitting of
transmission projects and growth in associated generation, specifically
coal-fired power plants. They commented that National Corridor
designation favors a transmission-based solution to congestion and is
tantamount to permitting transmission projects.
DOE Response
The Department's designation of National Corridors itself has no
environmental impact: It neither permits nor precludes the construction
of any transmission projects or any other ground-disturbing activity.
One of the primary themes voiced by commenters is that DOE's
designation of National Corridors will somehow inexorably lead to the
construction of transmission projects and that DOE should, in an EIS,
predict their range, extent, and impact on the environment. However,
DOE has no authority to site transmission. Moreover, FERC's discretion
to approve transmission projects located within National Corridors is
circumscribed. As discussed in Section I.A above, FERC may only issue a
permit if the applicant has shown that its project will significantly
reduce congestion. If competing projects, including non-transmission
projects, were to resolve the congestion or constraint problem before
the issuance of a FERC permit, the sponsor of a transmission project
would be hard pressed to make such a showing. FERC, at the siting
stage, will determine whether a transmission-based solution to
particular instances of congestion is warranted.
[[Page 57023]]
Any commitment to groundbreaking activities with environmental
impacts is made only after FERC authorizes construction. Before that
point, FERC will have conducted a full NEPA review of the proposed
project.
F. Pending Transmission Proposals
Summary of Comments
Several commenters, including the National Trust for Historic
Preservation, NPCA, the Wilderness Society, and the Sierra Club (Grand
Canyon chapter), have argued that DOE should prepare a PEIS now based
upon transmission projects that are currently under review by State
permitting agencies or are currently being planned within the Mid-
Atlantic Area National Corridor or the Southwest Area National
Corridor.
DOE Response
The Department concludes that conducting a PEIS based on currently
pending transmission proposals would be premature and speculative. The
Department does not know if these specific proposed projects will be
permitted, or if they are permitted, the ultimate location of the
transmission facilities. Considering the impacts of pending
transmission proposals would inappropriately presume the outcome of
permitting actions, first by the States and then by FERC. If the
proposed transmission projects are permitted by the States, FERC would
never become involved and there would be no Federal action other than
DOE's designation. If the transmission projects were not permitted by
the States, sponsors of the proposals may or may not seek construction
permits from FERC. If FERC were to receive an application, FERC would
conduct a full NEPA review. FERC, as a result of its own NEPA review,
could very well decide to pick alternative transmission routes that
would reduce the environmental impact of currently proposed routes. As
described in Sections II.D and III.D, the Mid-Atlantic Area National
Corridor and the Southwest Area National Corridor are sufficiently
broad to account for numerous alternative transmission routes and
sources of generation including renewables and nuclear.\127\ Thus, any
PEIS performed by DOE now would be entirely speculative and could
improperly second-guess both the States and FERC.
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\127\ Arnold & Porter, filing comments on behalf of several
Virginia landowners, commented that the Department has issued draft
National Corridor designations that are wide to the point of
rendering meaningless any environmental review of the National
Corridors. See also statement of Milton Wagner at June 21, 2007,
Phoenix, AZ public meeting. However, the geographic breadth of the
Mid-Atlantic Area National Corridor and the Southwest Area National
Corridor ensure that FERC has flexibility to choose alternative
siting locations if its jurisdiction under FPA section 216(b) is
triggered.
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G. Cumulative Impacts
Summary of Comments
Certain commenters asserted that DOE should anticipate the impacts
from current pending applications for transmission projects and analyze
the cumulative impact of such projects in a PEIS. They argue that only
DOE, and not FERC, has the ability to assess the overall impact to an
area of multiple new transmission facilities and potential associated
generation, such as coal-fired power plants.
DOE Response
The Department cannot determine the number, size, or location of
new transmission facilities that might be permitted within the National
Corridors. The Department also does not know whether any new
electricity generation, or what type of generation, will develop in the
future. While commenters assert that designation of the Mid-Atlantic
Area National Corridor will spur additional coal-fired generation, the
Department concludes, as discussed in Section II.G above, that such
designation neither favors transmission solutions to congestion over
non-transmission solutions nor favors transmission projects accessing
one type of generation over transmission projects accessing any other
type of generation. Thus, it may be just as likely that renewable or
nuclear generation would increase. Cumulative impacts are speculative
at this stage; through this designation DOE is not setting criteria for
particular transmission facilities, the number of transmission
facilities, or type of generation that may be developed within the
National Corridors. The Department has no control over how and when any
such development might occur and therefore cannot predict or estimate
its impacts. It is apparent from a reading of the FPA section 216 that
Congress anticipated that the States would be the first to determine
whether to site projects within their borders; Congress then gave FERC,
in certain specified circumstances, the authority to site projects. If
any parties are capable of analyzing or affecting cumulative impacts it
would be FERC and the States, and then only after they had actual
projects to consider.
H. Planning for Conservation Areas
Summary of Comments
Some commenters, including Sierra Club (National), the ECCP, and
the Piedmont Environmental Council, argued that designation of National
Corridors will have an immediate impact on conservation easements and
State decisions about allocating land as parks and green space.
Commenters assert that because existing conservation districts in
designated National Corridors are not exempt from potential Federal
siting, such areas will lose their State protection. Additionally,
commenters claim that because property owners and State planners will
anticipate that land within designated National Corridors will be the
site of future eminent domain proceedings and transmission
construction, property owners will not place property into new
conservation easements and States will not designate new protected
lands within any designated National Corridors.\128\
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\128\ Similarly, several commenters argue that designation of
National Corridors will lead private sector parties and States to
make other decisions based on the assumption that construction of
transmission lines is inevitable within the National Corridors. For
example, some commenters have said that designation will lead to a
decline in the value of real estate in areas within the National
Corridors such that residents will move elsewhere. The Department's
response to comments on protected lands in this subsection applies
with equal force to these comments about other types of planning
decisions and commitments made in anticipation of future development
within the National Corridors.
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DOE Response
The possibility that State land planners and property owners will
make land use decisions based on the assumption that there will be
future development through environmentally sensitive areas within the
Mid-Atlantic Area National Corridor or the Southwest Area National
Corridor is too attenuated an impact to require a NEPA review.
Analyzing such decisions would require DOE to speculate about actions
that are at best weakly linked to the designation of National
Corridors, namely how State and property land owners might react to
their subjective, perceived risk of FERC granting construction permits
for projects that will affect the physical environment in particular
sections of the National Corridors.
Even if FERC were to authorize the construction of transmission
facilities in the future, FERC would address avoidance of special land
use areas in its NEPA review.\129\ To the extent that
[[Page 57024]]
the National Corridors may have any impact on land use planning
decisions, those impacts are too speculative and uncertain at this
point to meaningfully analyze.
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\129\ See FERC Order No. 689, 71 FR 69,440, 69,459, 117 FERC ]
61,202 at P 177.
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In addition, as described in Section I.A, transmission developers
will need rights-of-way in addition to a construction permit when
developing State property. The right of eminent domain under FPA
section 216 does not apply to State property. Thus, any current State
lands will not lose existing conservation protection unless authorized
by the appropriate State authorities. In addition, State authorities
will not lose any incentive to create new parks or State conservation
areas.
I. State Environmental Protection Statutes
Summary of Comments
Certain commenters, including the ECCP, Environmental Defense, the
National Trust for Historic Preservation, SELC, the Sierra Club
(Pennsylvania Chapter), NJ Highlands Water Protection and Planning,
NYDEC, and the Piedmont Environmental Council, raised concerns that
designation of National Corridors will have an immediate impact on the
environment because it undercuts the ability of States, who are more
intimately familiar with local environmental issues and historic
artifacts, to implement their own procedural and substantive
environmental statutes during the siting process. According to these
commenters, State environmental review statutes may, in some instances,
be more stringent than NEPA, and such State reviews will be
shortchanged in order to meet the one-year timeframe for State action
under FPA section 216(b)(1)(C)(i).
DOE Response
The effect of designation of National Corridors on prospective
State environmental and cultural reviews would have no physical impact
on the environment and is also too remote, indirect, and speculative to
require NEPA review. The Department recognizes that designation of
National Corridors could theoretically prompt States with lengthy
environmental review processes to speed up their environmental and
cultural analyses in order to meet the one-year deadline for review
established by Congress. However, at the National Corridor designation
stage, the environmental effects from such a potential procedural
impact are entirely speculative. National Corridor designation may lead
to no change in the degree of environmental review or in the role of
State expertise in the permitting decision; the States will have an
opportunity to share their analysis and expertise during FERC's NEPA
comment period. In such instances, even though NEPA may limit the
applicability of State environmental review statutes, the substance of
a State's environmental review actually becomes an important piece of
the NEPA review. Even where State environmental review statutes may be
more stringent, FERC's NEPA review will provide a second hard look at
environmental impacts. Thus, National Corridor designation may
ultimately lead to FERC environmental reviews that are more thorough
and/or protective of the environment than State reviews.
J. EPAct Section 368
Summary of Comments
Several commenters, including Environmental Defense, Sierra Club
(Grand Canyon Chapter), SELC, and the Advisory Council on Historic
Preservation, stated that DOE should be preparing a PEIS because DOE
and several other agencies are preparing a PEIS for the designation of
corridors on Federal lands in eleven western States under EPAct section
368. For example, Environmental Defense asserts that DOE in both EPAct
section 368 and FPA section 216(a) will set the stage for potential
site-specific activity and establish energy policy, and that both
decisions therefore require a PEIS.
DOE Response
While both EPAct section 368 and FPA section 216(a) call for
designation of ``corridors,'' as discussed in Section II.D above the
purposes and effects of the two provisions are quite different.
Pursuant to EPAct section 368, the Departments of the Interior,
Agriculture, Energy, Defense, and Commerce are required to designate
right-of-way corridors on Federal lands in eleven western States for
oil, gas, and hydrogen pipelines and electricity transmission and
distribution facilities. Congress required very different corridors
under EPAct section 368 than it authorized under FPA section 216(a)--
EPAct section 368 corridors must have a defined centerline, width, and
compatible uses. Congress required that the Federal land management
agencies designate these right-of-way corridors through amendments to
their land use resource management plans or equivalent land use plans.
Finally, EPAct section 368 requires the Federal land management
agencies to institute procedures to expedite applications to construct
energy transport systems within the corridors. As such, EPAct section
368 influences Federal land use planning decisions. EPAct section 368
is ultimately a land use provision, one which arises in a subtitle on
``Access to Federal Lands.'' \130\
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\130\ EPAct, Title III, Subtitle F.
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In contrast, the Department, in implementing FPA section 216(a), is
not establishing right-of-way corridors or making any other land use
planning decision that is even remotely connected to ground-breaking
activity that might affect the physical environment. In fact, in
implementing FPA section 216(a), the Department is designating National
Corridors that are sufficiently broad for FERC to select from a wide
array of geographic routes for any transmission facilities that it may
permit. As such, FERC, not the Department, will make land use choices;
the Department here makes no decisions about the suitability of
particular geographical routes for future development of transmission
facilities.
In sum, EPAct section 368 and FPA section 216(a) are fundamentally
different. Because EPAct section 368 necessarily alters how Federal
land management agencies manage their lands, the designation of EPAct
section 368 right-of-way corridors is an action less removed from
ground-breaking impacts than the designation of National Corridors
under FPA section 216(a), which does not itself influence land
management decisions.
K. NHPA and ESA
Summary of Comments
Several commenters, including the ECCP, Sierra Club (National),
National Trust for Historic Preservation, SELC, Sierra Club
(Pennsylvania Chapter), Advisory Council on Historic Preservation,
NPCA, Wilderness Society, Arnold & Porter (filing comments on behalf of
several landowners in Virginia), Virginia State Historic Preservation
Office, and Piedmont Environmental Council, express concern about the
lack of DOE review pursuant to NHPA section 106 and ESA section 7. The
Advisory Council on Historic Preservation requested clarification of
the Department's position on whether NHPA section 106 consultation is
required for the designation of National Corridors.
DOE Response
As stated above, the Department does not believe that the
designation of National Corridors, in itself, is a major
[[Page 57025]]
Federal action significantly affecting the quality of the human
environment, requiring NEPA review. Similarly, and for the same
reasons, the designation of National Corridors, in itself, is not an
undertaking that has the potential to cause effects on historic
properties, requiring NHPA review, nor is the designation of National
Corridors a Federal action that is likely to jeopardize the continued
existence of any endangered species or threatened species or result in
the destruction or adverse modification of habitat of such species. If
FERC jurisdiction were triggered under FPA section 216(b), FERC would
conduct all appropriate NHPA and ESA reviews.\131\
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\131\ See, e.g., FERC Order No. 689, 71 FR 69,440, 69,457, 117
FERC ] 61,202 at P148 (``The Commission will not authorize
construction, however, until the permittee has complied with all the
requirements of NHPA and all other relevant environmental laws.'').
The Wilderness Society asserts that DOE must engage in consultation
and carry out conservation programs for listed species pursuant to
ESA section 7(a)(1). Section 7(a)(1) is not triggered by specific
Federal actions and, in particular, not by ones that are not likely
to jeopardize the continued existence of any endangered species or
threatened species or result in the destruction or adverse
modification of habitat of such species.
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V. Ordering Paragraphs
For the reasons set forth in the May 7 notice as clarified in this
report above, it is hereby ordered that:
A. In Docket No. 2007-OE-01, the Department designates the Mid-
Atlantic Area National Interest Electric Transmission Corridor as a
national interest electric transmission corridor pursuant to FPA
section 216(a)(2) encompassing the following counties and cities: Kent
County, DE, New Castle County, DE, and Sussex County, DE; Washington,
DC; Allegany County, MD, Anne Arundel County, MD, Baltimore County, MD,
Calvert County, MD, Caroline County, MD, Carroll County, MD, Cecil
County, MD, Charles County, MD, Dorchester County, MD, Frederick
County, MD, Garrett County, MD, Harford County, MD, Howard County, MD,
Kent County, MD, Montgomery County, MD, Prince George's County, MD,
Queen Anne's County, MD, St. Mary's County, MD, Talbot County, MD,
Washington County, MD, Wicomico County, MD, Worcester County, MD, and
City of Baltimore, MD; Atlantic County, NJ, Bergen County, NJ,
Burlington County, NJ, Camden County, NJ, Cape May County, NJ,
Cumberland County, NJ, Essex County, NJ, Gloucester County, NJ, Hudson
County, NJ, Hunterdon County, NJ, Mercer County, NJ, Middlesex County,
NJ, Monmouth County, NJ, Morris County, NJ, Ocean County, NJ, Passaic
County, NJ, Salem County, NJ, Somerset County, NJ, Sussex County, NJ,
Union County, NJ, and Warren County, NJ; Albany County, NY, Bronx
County, NY, Broome County, NY, Cayuga County, NY, Chenango County, NY,
Clinton County, NY, Columbia County, NY, Delaware County, NY, Dutchess
County, NY, Erie County, NY, Franklin County, NY, Fulton County, NY,
Genesee County, NY, Greene County, NY, Herkimer County, NY, Jefferson
County, NY, Kings County, NY, Lewis County, NY, Livingston County, NY,
Madison County, NY, Monroe County, NY, Montgomery County, NY, Nassau
County, NY, New York County, NY, Niagara County, NY, Oneida County, NY,
Onondaga County, NY, Ontario County, NY, Orange County, NY, Orleans
County, NY, Otsego County, NY, Putnam County, NY, Queens County, NY,
Renssalaer County, NY, Richmond County, NY, Rockland County, NY, St.
Lawrence County, NY, Saratoga County, NY, Schenectady County, NY,
Schoharie County, NY, Seneca County, NY, Suffolk County, NY, Sullivan
County, NY, Ulster County, NY, Wayne County, NY, Westchester County,
NY, and Wyoming County, NY; Belmont County, OH, Carroll County, OH,
Columbiana County, OH, Harrison County, OH, Jefferson County, OH,
Monroe County, OH, and Stark County, OH; Adams County, PA, Allegheny
County, PA, Armstrong County, PA, Beaver County, PA, Bedford County,
PA, Berks County, PA, Blair County, PA, Bradford County, PA, Bucks
County, PA, Butler County, PA, Cambria County, PA, Carbon County, PA,
Centre County, PA, Chester County, PA, Clearfield County, PA, Clinton
County, PA, Columbia County, PA, Cumberland County, PA, Dauphin County,
PA, Delaware County, PA, Fayette County, PA, Franklin County, PA,
Fulton County, PA, Greene County, PA, Huntingdon County, PA, Indiana
County, PA, Jefferson County, PA, Juniata County, PA, Lackawanna
County, PA, Lancaster County, PA, Lebanon County, PA, Lehigh County,
PA, Luzerne County, PA, Mifflin County, PA, Monroe County, PA,
Montgomery County, PA, Montour County, PA, Northampton County, PA,
Northumberland County, PA, Perry County, PA, Philadelphia County, PA,
Pike County, PA, Schuylkill County, PA, Snyder County, PA, Somerset
County, PA, Susquehanna County, PA, Union County, PA, Wayne County, PA,
Washington County, PA, Westmoreland County, PA, Wyoming County, PA, and
York County, PA; Arlington County, VA, Clarke County, VA, Culpeper
County, VA, Fairfax County, VA, Fauquier County, VA, Frederick County,
VA, Loudon County, VA, Madison County, VA, Page County, VA, Prince
William County, VA, Rappahannock County, VA, Rockingham County, VA,
Shenandoah County, VA, Stafford County, VA, Warren County, VA, City of
Alexandria, VA, City of Harrisonburg, VA, City of Fairfax, VA, City of
Falls Church, VA, City of Manassas, VA, City of Manassas Park, VA, and
City of Winchester, VA; and Barbour County, WV, Berkeley County, WV,
Boone County, WV,\132\ Braxton County, WV, Brooke County, WV, Calhoun
County, WV, Clay County, WV, Doddridge County, WV, Gilmer County, WV,
Grant County, WV, Hampshire County, WV, Hancock County, WV, Hardy
County, WV, Harrison County, WV, Jackson County, WV, Jefferson County,
WV, Kanawha County, WV, Lewis County, WV, Marion County, WV, Marshall
County, WV, Mason County, WV, Mineral County, WV, Monongalia County,
WV, Morgan County, WV, Nicholas County, WV, Ohio County, WV, Pendleton
County, WV, Pleasants County, WV, Pocahontas County, WV, Preston
County, WV, Putnam County, WV, Randolph County, WV, Ritchie County, WV,
Roane County, WV, Taylor County, WV, Tucker County, WV, Tyler County,
WV, Upshur County, WV, Webster County, WV, Wetzel County, WV, Wirt
County, WV, and Wood County, WV. This designation is effective on
October 5, 2007 and will remain in effect until October 7, 2019. The
Department reserves the right to rescind, renew or extend this
designation or modify the scope of this designation after notice and
opportunity for comment.
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\132\ Boone County, WV, was inadvertently omitted from the
narrative description of the draft Mid-Atlantic Area National
Corridor in the May 7, 2007, notice at 72 FR 25909. It was correctly
included in the May 7, 2007 map of the draft National Corridor.
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B. In Docket No. 2007-OE-02, the Department designates the
Southwest Area National Interest Electric Transmission Corridor as a
national interest electric transmission corridor pursuant to FPA
section 216(a)(2) encompassing the following counties: Imperial County,
CA, Kern County, CA, Los Angeles County, CA, Orange County, CA,
Riverside County, CA, San Bernardino County, CA, and San Diego County,
CA; and La Paz County, AZ, Maricopa County, AZ, and Yuma County, AZ.
This designation is effective on October 5, 2007 and will remain in
effect until October 7, 2019. The Department reserves the right to
rescind, renew or extend this
[[Page 57026]]
designation or modify the scope of this designation after notice and
opportunity for comment.
C. The Department grants party status in Docket No. 2007-OE-01 to
all persons who either: (1) Filed comments marked ``Attn: Docket No.
2007-OE-01'' electronically at http://nietc.anl.gov on or before July
6, 2007; (2) mailed written comments marked ``Attn: Docket No. 2007-OE-
01'' to the Office of Electricity Delivery and Energy Reliability, OE-
20, U.S. Department of Energy, 1000 Independence Avenue, SW.,
Washington, DC 20585, that were received on or before July 6, 2007; or
(3) hand-delivered written comments marked ``Attn: Docket No. 2007-OE-
01'' at one of the public meetings. Only those persons who are parties
to the proceeding in Docket No. 2007-OE-01 and who are aggrieved by the
Department's order in that docket may apply for rehearing pursuant to
FPA section 313.
D. The Department grants party status in Docket No. 2007-OE-02 to
all persons who either: (1) Filed comments marked ``Attn: Docket No.
2007-OE-02'' electronically at http://nietc.anl.gov on or before July
6, 2007; (2) mailed written comments marked ``Attn: Docket No. 2007-OE-
02'' to the Office of Electricity Delivery and Energy Reliability, OE-
20, U.S. Department of Energy, 1000 Independence Avenue, SW.,
Washington, DC 20585, that were received on or before July 6, 2007; or
(3) hand-delivered written comments marked ``Attn: Docket No. 2007-OE-
02'' at one of the public meetings. Only those persons who are parties
to the proceeding in Docket No. 2007-OE-02 and who are aggrieved by the
Department's order in that docket may apply for rehearing pursuant to
FPA section 313.
E. Any application for rehearing must be either: (1) Mailed or
hand-delivered to the Office of Electricity Delivery and Energy
Reliability, OE-20, U.S. Department of Energy, 1000 Independence
Avenue, SW., Washington, DC 20585; or (2) faxed to 202-586-8008.
Applications for rehearing of the order in Docket No. 2007-OE-01 must
be marked ``Attn: Docket No. 2007-OE-01.'' Applications for rehearing
of the order in Docket No. 2007-OE-02 must be marked ``Attn: Docket No.
2007-OE-02.'' Applications for rehearing must be received by 5 p.m.,
Eastern time November 5, 2007. The Department will not accept responses
to requests for rehearing.
Note: Delivery of U.S. Postal Service mail to DOE continues to
be delayed by several weeks due to security screening; therefore,
applicants who choose to mail their rehearing applications are
encouraged to use express mail.
The Secretary of Energy has approved the publication of this
notice.
Issued in Washington, DC on October 2, 2007.
Kevin M. Kolevar,
Assistant Secretary, Electricity Delivery and Energy Reliability. .
Acronyms
ACC Arizona Corporation Commission
AEP American Electric Power
APA Administrative Procedure Act
CAISO California Independent System Operator
CARI Communities Against Regional Interconnect
CEC California Energy Commission
CPUC California Public Utilities Commission
DeDNR Delaware Department of Natural Resources and Environmental
Control
DOE U.S. Department of Energy
DPV2 Devers-Palo Verde 2 project
ECCP Energy Conservation Council of Pennsylvania
EEI Edison Electric Institute
EIS Environmental Impact Statement
EPAct Energy Policy Act of 2005
ESA Endangered Species Act
FERC Federal Energy Regulatory Commission
FPA Federal Power Act
IID Imperial Irrigation District
ISO Independent System Operator
LMP Locational Marginal Price
MiPSC Michigan Public Service Commission
MISO Midwest Independent System Operator
NARUC National Association of Regulatory Commissioners
NEPA National Environmental Policy Act
NERC North American Electric Reliability Council
NHPA National Historic Preservation Act
NJBPU New Jersey Board of Public Utilities
NJDEP New Jersey Department of Environmental Conservation
NPCA National Parks Conservation Association
NPCC Northeast Power Coordinating Council
NYDEC New York Department of Environmental Conservation
NYFB New York Farm Bureau
NYISO New York Independent System Operator
NYPSC New York Public Service Commission
ODEC Old Dominion Electric Cooperative
OMS Organization of MISO States
PaDEP Pennsylvania Department of Environmental Conservation
PaPUC Pennsylvania Public Utilities Commission
PEIS Programmatic EIS
PHI Pepco Holdings, Inc.
PJM PJM Interconnection
RTO Regional Transmission Operator
SCE Southern California Edison Company
SDG&E San Diego Gas and Electric
SELC Southern Environmental Law Center
TEPPC Transmission Expansion Policy Planning Committee of the
Western Electricity Coordinating Council
WAPA Western Area Power Administration
WIA Wyoming Infrastructure Authority
WIRES Working Group for Investment in Reliable and Economic Electric
Systems
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[FR Doc. E7-19731 Filed 10-4-07; 8:45 am]
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