On December 19, 2023, the Department of Energy (“DOE”) Grid Deployment Office released final guidance on how it will designate National Interest Electric Transmission Corridors (“NIETC”) pursuant to Section 216(a) of the Federal Power Act (“FPA”) and opened the first submission window for public participation and recommendations. The guidance explains that NIETCs will be narrow geographic areas where DOE has identified present or expected transmission capacity constraints or congestion that adversely affects consumers. Designation as a NIETC opens federal funding and financing opportunities, pursuant to the Infrastructure Investment and Jobs Act (“IIJA”) and the Inflation Reduction Act (“IRA”) and conveys eminent domain rights to developers in certain circumstances where FERC is authorized to permit and site the project. Public comments and recommendations are due February 2, 2024.

DOE’s guidance outlines a four-phase process for designating a NIETC. During Phase 1, DOE will evaluate the results of the most recent triennial National Transmission Needs Study and open a 45-day public submission window whereby interested parties can submit information and recommendations to DOE for consideration. A threshold determination will be made to limit NIETC consideration. To pass the screening threshold, a potential NIETC must meet at least one of three factors: (1) it is within a narrow geographic area, identified by the Needs Study, that is experiencing or expected to experience transmission capacity constraints or congestion that adversely affects consumers; (2) it is based on one or more projects identified by a regional transmission planning entity for efficiency or cost-effectiveness in a FERC-approved regional transmission planning process; or (3) other information supports that an area presents current or expected capacity constraints or congestion that adversely affects consumers. DOE may choose to narrow this list by identifying and applying the relevant discretionary factors in FPA section 216(a)(4). DOE reserves the right to open additional submission windows between triennial studies.

Approximately 60 days following Phase 1 submissions, Phase 2 will commence with DOE issuing a list of potential NIETCs and opening a 45-day comment period to gather information on geographic boundaries and permitting, which DOE will use in studying a potential NIETC’s environmental impacts pursuant to NEPA and compliance needs with other federal statutes. A list of relevant information DOE would find helpful can be found in the guidance. During this phase, commenters can also propose alternatives to those identified in Phase 1. DOE will then rank the potential NIETCs based on the completeness of information it has acquired in Phase 2, giving weight to projects with sufficient information to facilitate compliance with NEPA and other federal statutes.

During Phase 3, DOE will refine the geographic boundaries of the potential NIETCs and consider whether greater benefits can be achieved by combining all or portions of them. Concurrently, DOE will commence the NEPA process and conduct robust public engagement as required by the FPA and NEPA. The guidance encourages participation of state and local government bodies. Additionally, DOE will conduct an in-depth evaluation of the each potential NIETC designation to ensure there are no changed circumstances that would upset its preliminary findings and will independently assess how a particular designation will further the FPA section 216(a)(4) factors. Phase 3 concludes with the issuance of draft designation reports and NEPA compliance documents, with public notice and comment as required.

In Phase 4, DOE will issue final Environmental Impact Statements and publish them in the Federal Register for the requisite 30-day notice period, after which DOE will issue a Record of Decision for each NIETC designation and a final report. According to the guidance, any appeal of a NIETC designation is governed by FPA section 313.

Additional information, including a copy of DOE’s final guidance, can be found here.