To address growing concern over the inadequacy of the nation's transmission infrastructure, the 2005 Energy Policy Act authorized, under certain conditions, that the FERC would be able to override state authority over transmission permitting. More specifically, Section 1221 of EPAct (adding Section 216 to the Federal Power Act of 1935) requires the Department of Energy (DOE) to conduct studies of electric transmission congestion every three years and grants the DOE the auhority to designate any area experiencing congestion adversely affecting consumers as a national interest electric transmission corridor (NIETC).
The FERC is granted authority to issue permits for transmission projects in a NIETC if states or other regional authorities are unable or unwilling to approve such projects within one year of receiving an application.
DOE issued its first National Electric Transmission Congestion Study in August 2006, incorporating substantial input and congestion analysis from Western stakeholders. While DOE identified a "congestion area of concern" in the San Francisco Bay area as well as "conditional" congestion areas (contingent upon future generation development) across the west, the most significant outcome for California was the identification of Southern California load centers as one of two nationwide "critical congestion areas". This was based on incipient or projected congestion between this area and the desert southwest.
In October of 2007, two NIETCs were finalized, one in the Mid-Atlantic area and one spanning a broad area including southern California, parts of Arizona and southern Nevada (the latter was ultimately removed). The rationale for this “southwest corridor” included emerging desert southwest-to-southern California congestion previously emphasized in the Congestion Study, and the need to facilitate access to new generation sources, principally renewable generation.
In a related proceeding at FERC (Docket No. RM06-12) following a period of stakeholder comments on a proposed set of rules, FERC issued its final regulations for the backstop siting of transmission projects in a NIETC when a state or other regional authority has been unable or unwilling to approve such projects within one year of receiving a completed application in November 2006.
The CPUC’s Position
Throughout this complex process, the CPUC has filed several rounds of comments to DOE and the FERC. These comments emphasized ways in which the federal processes should recognize, defer to, coordinate with and cooperate with state and regional transmission planning and energy procurement processes. CPUC comments also emphasized that the designated "southwest" NIETC, most of which is in southern California, is overly broad from a legislative and practical perspective, and could seriously impair California's coordination of its transmission and renewable energy planning.
Several key CPUC positions were partially adopted in ultimate DOE and FERC actions. As recommended by the CPUC, the DOE ultimately used a two-step process for designating corridors and emphasized the need to identify source-to-sink areas when designating transmission corridors.
The FERC ultimately provided that no phase of its permitting activities in a NIETC, even pre-filing, would begin until a state permitting process has run a full year after an application to the state is deemed complete, with applicants specifically warned not to abuse or stall the state process.
Moreover, the FERC’s final permitting rules provided for more transparent integration with, and use of, information from state siting processes. However, the CPUC still opposes the overly broad and potentially disruptive extent and rationale of the DOE-designated southwest corridor, as reflected in the CPUC’s request for rehearing to DOE, rejected by the DOE, and in a subsequent petition for review the CPUC has filed with the United States Court of Appeals.
DOE will soon begin a second congestion study due in August 2009 with substantial contribution from WECC and its TEPPC Committee that focuses on west-wide congestion and economic transmission studies.