On April 2, 2009, FERC filed a petition seeking an en banc hearing asking the United States Court of Appeals for the Fourth Circuit (“Court of Appeals”) to reconsider the case of Piedmont Environmental Council v. FERC. The ruling rejected the Commission’s interpretation of its backstop siting authority to approve certain interstate electric transmission projects that had been previously denied by state commissions (see February 20, 2009 edition of the WER).

The Energy Policy Act of 2005 added Section 216(b) to the Federal Power Act giving the Commission “backstop” transmission siting authority under certain conditions. This authority could be used to site transmission lines located in National Interest Electric Transmission Corridors. The Department of Energy designates these corridors based on capacity constraints or congestion. The language in Section 216(b) allows FERC to permit the siting and construction of new transmission lines when the state authority “has withheld approval for more than 1 year after the filing of an application seeking approval.” FERC promulgated regulations that determined that the provision allowed it to overrule a state commission’s denial of a project application after one year. This led to significant opposition and multiple petitions for appeal were eventually consolidated at the Court of Appeals.

On February 18, 2009, the Court of Appeals reversed FERC’s statutory interpretation stating “withheld approval” does not equate to a denied approval. Judge Michael wrote the 2-1 opinion stating FERC’s reading of the law means states “will lose jurisdiction unless they approve every permit application in a national interest corridor.” The majority went on to interpret “withheld approval for more than 1 year” to mean an “action has been held back continuously” for one year. This means that a denial before the one year mark stops that continuity, and thus, FERC is precluded from invoking its backstop authority. Judge Traxler dissented stating FERC made a reasonable statutory interpretation.

The original Fourth Circuit opinion is available at: http://pacer.ca4.uscourts.gov/