Transmission

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On July 25, 2024, FERC issued an order granting in part and denying in part a complaint raised by American Municipal Power, Inc., the People’s Counsel for the District of Columbia, and the PJM Industrial Customer Coalition (collectively, “Complainants”) against PJM Interconnection, L.L.C. (“PJM”) arguing, principally, that PJM violated Schedule 6 of the PJM Operating Agreement by failing to execute Designated Entity Agreements in all situations with each “Designated Entity,” or the entity designated to build transmission projects that PJM selects in the PJM Regional Transmission Expansion Plan (“RTEP”). FERC also granted in part and denied in part a separate request by PJM under section 206 of the Federal Power Act to revise Schedule 6 of the PJM Operating Agreement (the “PJM 206 Filing”) governing the RTEP process and associated requirements for Designated Entity Agreements. FERC established paper hearing procedures to develop a record to determine PJM’s responsibilities concerning Designated Entity Agreements for certain RTEP projects already in process and whether remedial actions are required to address the Operating Agreement violations.Continue Reading FERC Faults PJM for Failing to Execute Designated Entity Agreements, Establishes Hearing on Whether Remedial Actions Warranted

On July 19, 2024, the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) issued an Order denying Tenaska Clear Creek Wind, LLC’s (“Clear Creek”) challenges to FERC’s orders allowing the allocation of costs for network upgrades.  Southwest Power Pool, Inc. (“SPP”) assigned costs of more than $100 million to Clear Creek to pay for upgrades required on SPP’s system to accommodate the interconnection of Clear Creek’s wind turbine-powered electrical generation project (the “Project”).Continue Reading D.C. Circuit Finds That Interconnection Customers are Responsible for Network Upgrade Costs

On June 28, 2024, the United States Supreme Court (“Supreme Court”) overruled its prior decision in Chevron U.S.A. v. Natural Resources Defense Council (“Chevron”) in a 6-3 vote in Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al. (“Loper Bright”). The Chevron doctrine has required federal courts to defer to administrative agencies’ interpretations of statutes the agency administers when the underlying statute is ambiguous. Under the Loper Bright ruling, federal courts will not defer to administrative agencies in interpreting ambiguous statutes and instead must exercise their judgment in determining whether the agency acted within its statutory authority. The decision will likely have a substantial impact on both regulated industries and federal agencies such as FERC.Continue Reading SCOTUS Overrules Chevron Deference in 6-3 Ruling

On June 27, 2024, FERC issued an advance notice of proposed rulemaking (“ANOPR”) regarding potential reforms to require transmission providers to use dynamic line ratings (“DLRs”) to encourage more accurate and transparent line ratings. The Commission seeks comment on a proposed DLR framework and whether other transmission line rating reforms are needed to ensure just and reasonable and not unduly discriminatory or preferential FERC-jurisdictional rates. Initial and reply comments are due 90 and 120 days after the ANOPR’s publication in the Federal Register, respectively. After the comment period in this proceeding ends, FERC may consider issuing a formal Notice of Proposed Rulemaking, which would be a prerequisite to issuing any final rule.Continue Reading FERC Issues ANOPR on Dynamic Line Ratings

On May 23, 2024, FERC issued an Order denying Lackawanna Energy Center LLC’s (“Lackawanna”) complaint against PJM Interconnection, L.L.C. (“PJM”) alleging that PJM failed to reimburse Lackawanna for lost opportunity costs (“LOC”) incurred following allegedly improper curtailment orders from PJM during a 2023 transmission line outage.  Lackawanna argued that PJM’s curtailment of its generation output violated the Federal Power Act and the PJM Tariff, which typically allow for LOC payments when generator output is reduced due to transmission constraints or reliability issues.  FERC dismissed all claims raised in the complaint.Continue Reading FERC Dismisses Lackawanna Complaint Against PJM Seeking “Stability Limit”-Related Lost Opportunity Costs

On May 13, 2024, the Commission announced two major transmission reform final rules: Building for the Future Through Electric Regional Transmission Planning and Cost Allocation (“Order No. 1920”) and Applications for Permits to Site Interstate Electric Transmission Facilities (“Order No. 1977”). Order No. 1920, which adopts specific requirements for how transmission providers must conduct long-term planning and allocate costs for regional transmission facilities, was the subject of significant debate at today’s meeting and only mustered two votes in support from the three sitting commissioners. The Commission unanimously approved Order No. 1977, which updates the process FERC will use in the limited circumstances in which it must exercise its authority over siting electric transmission lines, as directed by Congress in the Infrastructure Investment and Jobs Act of 2021 (“IIJA”).Continue Reading Divided FERC Announces Much-Anticipated Transmission Rules

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.Continue Reading Department of Energy Issues Final Guidance on National Interest Electric Transmission Corridor Designation

On November 27, 2023, Troutman Pepper’s award-winning Energy Group published a white paper titled, Unlocking U.S. Transmission Upgrades – Are We On the Cusp of Real Progress?  The white paper offers perspectives from a range of transmission experts and examines the latest regulatory and legal changes that could lead to much-needed upgrades to the U.S. transmission grid.  Specifically, the report discusses why transmission grid upgrades are needed, identifies four main obstacles to upgrading the transmission system, provides solutions and benefits to overcoming these obstacles, and concludes with reasons for optimism for the future of the U.S. transmission system.Continue Reading Troutman Pepper Releases White Paper on Transmission Upgrades

On November 17, 2023, the U.S. Court of Appeals of the District of Columbia Circuit (“D.C. Circuit”) denied petitions challenging FERC’s approval of recent changes to the PJM Interconnection, L.L.C.’s (“PJM”) Open Access Transmission Tariff. The changes permit Transmission Owners in PJM to plan for “asset management projects” and certain End of Life (“EOL”) projects without satisfying PJM regional planning criteria. The D.C. Circuit also dismissed certain petitions for lack of standing.Continue Reading D.C. Circuit Upholds PJM Tariff Changes to Planning of Asset Management and End of Life Projects

Bridging the Gap Between Planning and Permitting

In recent decades, the U.S. has not been able to construct the volume of high-voltage backbone transmission facilities needed to support the country’s move to a ‘greener’ power system. The inability to build sufficient transmission infrastructure thwarts customer demands for a greener power mix.

In this report, we offer perspectives from a range of transmission experts about where the major roadblocks exist, and the latest regulatory and legal changes that promise to bring greater unity between the divergent federal planning and state siting and permitting processes. These changes provide hope that the U.S. can bridge the gaps that have delayed much-needed upgrades to the transmission system.Continue Reading Unlocking U.S. Transmission Upgrades – Are We on the Cusp of Real Progress?