The Reality of Permitting Interstate Transmission Facilities

 

Federal preemption of state siting and eminent domain processes will jeopardize the construction of needed transmission facilities by:  (1) centralizing land use decisions in Washington, D.C., far from those impacted; (2) imposing new requirements on transmission line permitting (e.g., NEPA requirements in areas where EISs are not currently required); and (3) requiring FERC, an agency already overburdened with its current workload and frequently unable to make timely decisions, to take on massive new responsibilities.  Granting FERC eminent domain authority will undermine existing state processes that are working.  As outlined below, the facts do not support an argument for federal preemption of state authority.  The federal government needs to act to get its own house in order.

 

THE WESTERN INTERCONNECTION

 

  1. No state has ever denied a permit for an interstate transmission line.  Part of the reason for this sterling record is that for the past 17 years the states and provinces in the Western Interconnection have been sharing information on transmission issues through the Western Interstate Energy Board’s Committee on Regional Electricity Power Cooperation.  The common view of the interconnected nature of transmission issues that has emerged has smoothed the way for state action on individual interstate transmission proposals.  In August 2001, Western governors directed the development of a protocol among the states to increase and formalize collaboration in the review of proposed interstate transmission facilities.  In December, the governors reviewed a first draft of such a protocol and directed that efforts be made to secure the concurrence of federal land management agencies, tribes and western Canadian provinces in such a protocol.  The governors expect to sign a final protocol in June 2002.
  2. The major challenge to siting transmission in the Western Interconnection is securing rights-of-way across federal lands.  It is hoped that federal land management agencies will agree to a protocol with the states to improve the quality and timeliness of reviews of proposed interstate transmission facilities.

 

THE EASTERN INTERCONNECTION

 

  1. Three projects are consistently sited as examples of states blocking the siting of interstate transmission projects:  a Trans Energie project that involves an underwater cable between Long Island and Connecticut; an American Electric Power proposed line between West Virginia and Virginia; and a proposed line between Minnesota and Wisconsin sponsored by Minnesota Power and Wisconsin Public Service Corporation.
  2. Projects Status:
    1. The Trans Energie proposal was for a merchant power line to cross Long Island Sound.  It was initially rejected by the Connecticut Siting Council.  The decision turned on two issues.  The first issue was environmental: the route chosen by Trans Energie would cross and disturb some sensitive and valuable oyster beds.  Other routes were not considered.  The second issue was germane to the Federal preemption issue:  Connecticut found that the purpose of the line was solely to supply power to Long Island and there would be no perceptible Connecticut benefits.  The decision was a balancing of the issues – there would be no benefits to Connecticut but there would be high in-state environmental costs.  The Siting Council invited Trans Energie to resubmit their application with an alternate route that avoided the sensitive areas impacted by their original route.  In 2002, the Connecticut Siting Council approved an alternative route submitted by Trans Energie.
    2. Regarding the second project, according to the AEP web site, both West Virginia and Virginia have issued permits for the line.  The federal land management agencies (National Park Service and National Forest Service) have objected to the line and have not issued rights-of-way.
    3. Regarding the third project, the Wisconsin Public Service Commission approved the Wisconsin segment of the proposed 345 Kv line from Arrowhead to Weston on August 17, 2001 (Order dated October 30, 2001).  In approving the line, one Wisconsin PSC commissioner said, “The Commission has already gone on record stating, based on numerous studies, that infrastructure improvements will be necessary.  This line meets that need.”  After the PSC granted the certificate for the line, three different lawsuits were filed by groups challenging the decision. On March 15, 2001, Minnesota granted an exemption from the state requirement to secure a siting certificate for its portion of the line.  In June 2001, landowners appealed the exemption.  In January 2002, the Minnesota State Court of Appeals denied the landowners’ appeal.

 

UNSUPPORTED THEORETICAL ARGUMENTS FOR FEDERAL PREEMPTION

 

To our knowledge three additional cases have been cited[1] as justification for federal preemption of state authority over the permitting of interstate transmission lines.

 

1.      Mississippi Power and Light v. Connerly (1984):  a power line proposed to carry power from the Grand Gulf nuclear plant in Mississippi to Louisiana.

 

2.  Tampa Electric v. Joe Garcia (2000):  permitting of a merchant plant in Florida

 

3.      Point of Pines Beach Association v. Energy Facility Siting Board:  a PURPA contract does not establish need in Massachusetts.

 

The last two of these cases are not relevant to transmission lines.

 

Tampa Electric   The Tampa Electric case turned on a reading of Florida law that says only regulated utilities serving Florida customers can build power plants.  Presumably this case is quoted to show that states can be myopic and only accept energy facilities to serve their own residents.  However, whether the Florida law concerning power plants is myopic or not, it does not apply to transmission lines and cannot be used to justify a federal override on transmission lines.

 

Point of Pines   Massachusetts facility siting law says the “need for power” determination required to approve a power plant is to be established by a comparison of state supply and demand.  The court ruled that a mandatory purchase under PURPA does not meet this standard.  The law applies to power plants, and while the reasoning may or may not be myopic, it does not apply to transmission lines.  The reasoning could some day be applied to transmission lines, but this case and this example do not justify federal preemption on transmission siting.

 

The other case does involve transmission lines.

 

Mississippi vs. Conerly (1984).  The Grand Gulf plant is located in northwest Mississippi on the east bank of the Mississippi River.  A line had already been built to the Franklin substation.  The transmission line that was proposed by Mississippi Power and Light (MP&L) to the Mississippi Public Service Commission would run from the Franklin substation to the Louisiana state line.  At that point Louisiana Power and Light would build the remainder of the line.

 

MP&L filed the permit application in 1981.  The PSC granted the permit and MP&L began acquiring right of way.  Four landowners refused to sell, so MP&L filed condemnation proceedings.  The landowners challenged the condemnation, and the lower court (Special Eminent Domain Court) dismissed the condemnation petitions.  MP&L appealed to the Mississippi Supreme Court, which ruled that the Mississippi eminent domain law required a Finding of Public Need, which was different than the PSC’s Certificate of Public Necessity and Convenience.  For purposes of public need for the eminent domain proceeding, the Supreme Court ruled that no Mississippi customers would be served by the line, hence there was no public need.  The Court found that the any Mississippi benefit from regional reliability due to the line was minimal.  MP&L appealed to the US Supreme Court, which dismissed the appeal on the grounds there was no substantial federal question.

 

This case is interesting from the perspective of the “state myopia” argument, but according to the Chief Legal Counsel for the Mississippi Public Service Commission, it was unique and is unlikely to be repeated.  He questioned whether it would even get the same decision today, because the prevalence of regional reliability concerns and the importance of the regional market would make it far easier to show benefits to Mississippi customers.

 

Conclusions

 

States in the Western Interconnection have a long history of permitting, routing and building interstate electric transmission lines.  Western state siting authorities recognize the interconnected nature of electricity markets and the essential contribution of interstate transmission lines to regional reliability.  We can find no justification for federal preemption in examples that have been sited in the Eastern Interconnection.

 

It is bad policy to preempt states on the permitting of transmission facilities that will jeopardize the ability of the West to construct transmission in a timely manner.  The federal government’s first priority should be to get its own house in order by improving the timeliness and quality of reviews of rights-of-way applications to construct transmission lines across federal lands.

Chronology of the AEP 765 Kv Project from West Virginia to Virginia to Date (from AEP web site)

March 1990
AEP announces Wyoming-Cloverdale 765 kV transmission line project.

August 1990
Universities Study Team (Virginia Tech and West Virginia University) formed to identify best route for power line.

March 1991
AEP files application for Special Use Permit with U.S. Forest Service, lead federal agency among U.S. Park Service and U.S. Army Corps of Engineers. Forest Service to study environmental impact of transmission line crossing of Jefferson National Forest and prepare Environmental Impact Statement.

August 1991
Application for Certificate of Public Convenience and Necessity filed with Virginia State Corporation Commission. Environmental Assessment filed in November 1991.

June 1992
Application for Certificate of Public Convenience and Necessity filed with West Virginia Public Service Commission. Withdrawn in August 1992 at request of PSC and refiled in February 1993.

July 1992
U.S. Congress Designates 19.2 miles of the New River (between Glen Lyn, Va., and Bluestone Lake, W. Va.) as a study area for wild and scenic river status under federal guidelines.

February 1993
AEP announces the formation of the Coalition for Energy and Economic Revitalization in support of line. Application for power line certificate refiled with West Virginia PSC.

May 1993
West Virginia PSC dismisses refiled application and decides to await Forest Service completion of Draft Environmental Impact Statement.

December 1995
Virginia SCC issues Interim Order citing compelling need for additional electric capacity and directs AEP to file additional information on alternate routing, regional transmission improvements and use and benefit to Virginia ratepayers.

May 1996
U.S. Park Service recommends denial of proposed power line crossing of the New River in Wild and Scenic study area.

June 1996
U.S. Forest Service releases Draft Environmental Impact Statement (DEIS) and states its preliminary preference for no action, which would deny permit to build line through Jefferson National Forest if it stands in the final EIS.

August 1996
U.S. Department of Energy files Report to the President on The Electric Power Outages in the Western United States, July 2-3. Report also cites threats to reliability in mid-Atlantic area due to delays in approval of AEP transmission line.

August 1996
U.S. Department of Energy requests three reliability councils, in coordination with the North American Electric Reliability Council (NERC), to study impacts of the delayed completion of the Wyoming-Cloverdale line. The councils are the East Central Area Reliability Coordination Agreement (ECAR), the Mid-Atlantic Area Council (MAAC), and the Southeastern Electric Reliability Council (SERC).

March 1997
The reliability councils, ECAR, MAAC, SERC and NERC, file their report Reliability Impact of the Delayed Completion of the Wyoming-Cloverdale 765 kV line to the U.S. Department of Energy.

The report concluded there is a power supply reliability risk in southwestern Virginia and southern West Virginia. The report stated, "The addition of the Wyoming-Cloverdale 765 kV line is an effective alternative for serving AEPs West Virginia and Virginia service areas as well as mitigating the risk of potential widespread power interruptions."

September 1997
AEP files its application for certification to construct the Wyoming-Cloverdale line in West Virginia and Virginia. The filings include a modified route for the project as identified by the Universities Study Team.

May 1998
The Public Service Commission of West Virginia approves construction of the 765 kV Wyoming - Cloverdale line along the preferred corridor in West Virginia.

September 1998
Virginia SCC order directs AEP to fully develop the Wyoming-Jacksons Ferry 765 kV alternative. Report due June 1, 1999.

May 1999
AEP files Wyoming-Jacksons Ferry 765 kV alternative with the SCC.

October 1999
SCC sets evidentiary hearing date for May 1, 2000.

May 2000
Evidentiary hearing conducted in Richmond.

October 2, 2000
SCC hearing examiner finds 765 kV project needed, recommends approval of Wyoming-Jacksons Ferry 765 kV project. Final decision of full SCC still pending.

October 27, 2000
AEP requests PSC of West Virginia to amend order granting approval of Wyoming-Cloverdale 765 kV line. Company requests PSC approval of project to either Cloverdale or Jacksons Ferry.

May 31, 2001
Virginia SCC issues final order approving construction of the 765 kV Wyoming-Jacksons Ferry line.

 

 

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[1] Ashley Brown, Harvard Electricity Policy Project