# Opposition Brief — Edison Electric Institute v. Piedmont Environmental Council (No. 09-343)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2009

## Text

eT ee U.S.
OCT 2 1 2009
No. 09-343 2
(hatte |
In The

Supreme Court of the United States

EDISON ELECTRIC INSTITUTE, ET AL.,

Petitioners,
V.

PIEDMONT ENVIRONMENTAL COUNCIL, ET AL.,
Respondents.

On Petition for Writ of Certiorari to the United
States Court of Appeals for the Fourth Circuit

BRIEF IN OPPOSITION

Lynn R. COLEMAN PETER M. McGowan
WILLARD Topp BENSON General Counse}
Piedmont Environmental JONATHAN D. FEINBERG*
Council Solicitor

45 Horner Street JOHN C. GRAHAM

P.O. Box 460 SEAN MULLANY

Warrenton, VA 20188 Assistant Counsel

(540) 347-2334 3 Empire State Plaza
Counsel for Respondent Albany, NY 12223-1350
Piedmont Environmental (518) 474-5597

Council Counsel for Respondent

—_ Public Service Commission
Counsel of Record of the State of New York
October 21, 2009

Additional Counsel listed on tnside cover

Becker Gallagher + Cincinnau, OH + Washington. D.C. + 800.890.5001

Lori SWANSON

Attorney General

State of Minnesota

ANNA E. JENKS

Assistant Attorney General

445 Minnesota Street, Suite 1100
St. Paul, MN 55101-2128

(651) 282-5735

Counsel for Respondent
Minnesota Public Utilities
Commission

i
LIST OF PARTIES

Petitioners:

Edison Electric Institute; American Public Power
Association; National Rural Electric Cooperative
Association; American Wind Energy Association;
Allegheny Power; Trans-Allegheny Interstate Line
Co.; and San Diego Gas & Electric Co.

Respondents:
Piedmont Environmental Council; Public Service
Commission of the State of New York; and

Minnesota Public Utilities Commission;

Federal Energy Regulatory Commission;

Communities Against Regional Interconnect

il
CORPORATE DISCLOSURE STATEMENT

Pursuant to Sup. Ct. Rule 29.6, Respondents state
as follows:

As State entities, the People of the State of New
York, the Public Service Commission of the State of
New York, and the Minnesota Public Utilities
Commission, are not required to file a disclosure
statement under Rule 29.6.

Piedmont Environmental Council is not a publicly
held corporation or entity and has no parent
corporations. Piedmont Environmental Council is not
a trade association.

ill

TABLE OF CONTENTS
Page No
Eee SO OD ie ve eee RRR RS KORA O NHS es i
CORPORATE DISCLOSURE STATEMENT ... ii
py SG Oe) ae Lag) to gy) -. Vv
COUNTER-STATEMENT OF THE CASE ...... 1
REASONS FOR DENYING A WRIT OF
iors rear ae a kes oc CR 9

I THE FOURTH CIRCUIT MAJORITY
PROPERLY CONSTRUED THE STATUTE BY
EMPLOYING FUNDAMENTAL STATUTORY
CONSTRUCTION PRINCIPLES IN A
STRAIGHTFORWARD MANNER ......... 12

A. This is an unremarkable Chevron statutory
construction case, which the Fourth Circuit
GOCUENG GCONTOGEEY 25 wc cee cect eses 12

1. The Fourth Circuit majority correctly
construed the word “withheld” in its
means GOING wk vk i hb ls eee 13

2. The Fourth Circuit majority correctly
construed the phrase in its broader
SEGTISUOTY COMTONE «wk cc ee eee ewes 14

3. The Fourth Circuit dissent misread the
NY org a oad

lV

B. An appellate court dissent does not create
statutory “ambiguity” entitling an agency to
PUGICIRL GOTOPONOD ww cect cc swe sacs 21

Ii. PETITIONERS FAIL TO DEMONSTRATE
THAT CONGRESS DEEMED THE SPECIFIC
STATUTORY LANGUAGE AT ISSUE TO
BE CRITICAL TO NATIONAL ENERGY
PO 66 5 ee de ee ee ee 25

A. The history of EPAct 2005 does not expressly
address the particular issue that the Fourth
tee GE oo 3 5 Kes Gk ee ee ens 25

B. Transmission infrastructure development is
affected by issues far more substantial than
the siting approval process............. 26

C. Siting-related legislation remains a work in
Es oy cogs boa nko ae eee 29

ft. NO HARM WILL RESULT FROM ALLOWING
THE FOURTH CIRCUIT’S DECISION TO
STAND

Vv

TABLE OF AUTHORITIES
CASES

Chevron U.S.A. v. Natural Res. Def. Council,
Ue RPT EOE bees cic ee aees esses passim

Gonzales v. Oregon,
ee I nc eke see erseecswaees 22

illinois Commerce Comm’n v. FERC,
576 F.3d 470 (7th Cir. 2008) ........... 27, 28

In re Thinking Machs. Corp..,
G7 F.e hues (ame Cir. LOUD . we eee 24, 25

New York v. FERC,
Se Ps OUD ike eva ea eves cece sees i. ae

Norfolk S. Ry. Co. v. Sorrell,
i arr 17

Piedmont Envtl. Council v. FERC,
558 F.3d 304 (4th Cir. 2009) ........... passim

Piedmont Envtl. Council v. FERC,
No. 07-1651 (4th Cir. Apr. 20, 2009) ......... 9

Ragsdale v. Wolverine World Wide, Inc.,
ae ee Oe Dg eile cv ae eee ea hewens 17

Robinson v. Shell Oil Co.,
op ROR ME. 900. |» ) Ree 13, 14

Rodriguez v. United States,
SP aa: OUR UPE) | 6 noe 5 6 vas ve we we te es 17

vi

United Mine Workers v. Fed. Mine Safety and
Health Review Comm’n,
Ole Wie ee Oe, GP. BO) onc ce cence: 25

United States v. Powell,
Po BS gk. nae 14

United States v. Shimer,
ee ES yg kd aos co Wee woe Vea Veen 22

United States v. Turkette,
452 U.S. 576 (1981)

Wyeth v. Levine,
US. , 1298S. Ct. 1187 (2009) ... 16,17

STATUTES

as oak \) 0; rey 18
Ur Oe iv ee ok cess 1
16 U.S.C. §824p(a\(2), (b) .. 0.0.0.2 eee eee 3
16 U.S.C. §824p(b)(1( AMI) 2 30
16 U.S.C. §824p(b\1MA)(C) oo... ee ee 3
16 U.S.C. §824p(b)..... 2.0. ee eee eee 1,3
16 U.S.C. §824p(b1) ... 2.2... eee ee eee 7
16 U.S.C. 8824p(b\IMCMI) oe eee eee ;

16 U.S.C. §824p(DKX1IKC)a) .. 2... ww eee 9, 19

V1i

16 0).6AC. Sees 30 6s hh eas ee ee eee 28
8G: 1.5, Se: <5 <2s. 0: 0 65-0 bee eee 6
BO USA. GERRI ds CP + 0 60 deen eke eueeees 7
Energy Policy Act of 1992, 106 Stat. 2776 ...... 27

Energy Policy Act of 2005 (EPAct 2005), Title XII,
Pub. L. No. 109-58, 119 Stat. 894 (2005) . 1,2,5

EPAct 2005 §1221. ...............005. 9,10

EPAct 2005 §1241(a), (b)(2), codified at 16

U.S.C. $0idsta), GD)... ces senses 28
FPA §216(b)(1). 0.0.2... c ee ee eee eee 8, 15, 16
FPA §216(b)\(1MC) 2... ee ee ee 21, 23
FPA §216(bMIMCKMG) .. 2.6 ce ec cee eee nesses 8
PPA GHD... ccc va ee 27, 28
REGULATIONS
CPR. 0 0... ck ocd ee 27, 28
18 C.F.R. §50.6(e(3)i) ... = ee 5

Promoting Wholesale Competition Through Open
Access Non-Discriminatory Transmisston
Services by Public Utilities, 61 Fed. Reg. 21,540
(May. 30, TOPO) 666s vee eaves eee 27

Vill

Regulations for Filing Applications for Permits to
Site Interstate Electric Transmission Corridors,

71 Fed. Reg. 36,258 (proposed June 16, 2006) . 5
Regulations for Filing Applications for Permits to
Site Interstate Electric Transmission Facilities,
71 Fed. Reg. 69,440 (Nov. 16, 2006) ........ 5
USDOE, National’ Electric Transmission
Congestion Report, 72 Fed. Reg. 56,992 (Oct. 5,
el LG we, Coe eG ak Cae eee eae 3
RULES
EES Me BOD ccs cccceerceccereneeeeeeoes 12
Sr 12
a) re 12
OTHER AUTHORITIES
Chinook Power Transmission, 126 F.E.R.C. 961,134
a oo os. 5 6.0.6.8 4 @ 6-0 040 6 60 0 0 66.0% 008 28
Comprehensive Nat'l Energy Policy: Hearings
Before the Subcomm. on Energy and Atr Quality
of the Comm. on Energy and Commerce, 108"
Cong. 13 (2003) (statements of Rep. Brown, Jr.
And Rep. Boucher) .................... 4,21
H.R. 6 §16012(b)(1)(B) (as introduced), 149 Cong.
Rec. H3130 (Apr. 10, 2003) ................ 3
H.R. 2454, 111" Cong. (2009) ........0..0.... 29

ix
H.R. Rep. No. 108-375 (2003) ................. 4

Keeping the Lights On: The Federal Role in
Munaging the Nation’s Elec.: Hearing Before
the Oversight of Gov't Mgmt., the Federal
Workforce and the Dist. of Columbia Subcomm.
of the S. Comm. on Governmental Affairs, S.
Hrg. 108-277, 108" Cong. 50 (2003Xstatement

of FERC’s then-Chairman Pat Wood, III) ..... 4
N.Y. Indep. Sys. Operator, Inc., 126 F.E.R.C.
461,320 (2009) (order on reh’g) ............ 28
Promoting Transmission Investment through
Pricing Reform, 113 F.E.R.C. 161,182 (proposed
ee ee ee cle ec a sa-u Oke ae ck eae 28
Promoting Transmission Investment through
Pricing Reform, 116 F.E.R.C. 461,057 (July 20,
ST Gv ak cave es ee tee Cee 27
Regulations for Filing Applications for Permits to
Site Interstate Electric Transmission Facilities,
119 F.E.R.C. 161,154 (May 17, 2007) (rehearing
Sg ana s Ae ater Ral ae org he: 6, 26
S. Rep. No. 109-78 (2005) ...........20cceeees 2

Electric Grid and Summer Heat, House
Government Reform Committee-Subcommittee
on Energy and Resources Hearing (July 12,
2006) (statement of FERC Chair Joseph T.
Kelliher), available at http://www.ferc.gov/
eventcalendar/files/200607 121453 18-Kelliher-
test-07-12-06.pdf 5

Xx

Regulations for Filing Applications for Permits to
Site Transmission Facilities, FERC Docket No.
RMO06-12-000 (June 15, 2006) (statement of
Joseph T. Kelliher, Chairman of FERC),
available at http://www.ferc.gov/news/
statements-speeches/kelliher/2006/06- 15-06-
PPE Peer rere Ere Pee 6

U.S. Department of Energy, National Transmission
Grid Study (May 2002), available at
http://www.ferc.gov/industries/electric/indus-
act/transmission-grid.pdf..............5.. 27

1
COUNTER-STATEMENT OF THE CASE

Authority to approve or deny a permit for the
construction of electric transmission facilities has
traditionally been exclusively reserved to the States, in
large part because the construction of such facilities
directly implicates compelling State interests
concerning, among other things, land-use,
environmental impacts, energy planning, and use of
State resources. In 1935, Congress enacted the
Federal Power Act (FPA) as part of a legislative
scheme under which the Federal government
regulated electric transmission and sales of electric
energy for resale in interstate commerce, while States
retained control over local matters, including siting of
transmission lines and generating plants. New York

v. FERC, 535 U.S. 1, 24 (2002).

In 2005, for the first time, Congress granted the
Federal Energy Regulatory Commission (FERC)
carefully limited “backstop” jurisdiction over the siting
of electric transmission facilities when it enacted a
new Section 216 of the FPA.’ Section 216 allows FERC
to grant siting permits in five very specific
circumstances. See, generally, 16 U.S.C. §824p(b).
One such circumstance — which is the focus of this case
— is when a State having legal authority to site a
proposed line and consider its interstate benefits, has
“withheld approval for more than 1 year after the
filing of an application” for a siting permit. Jd. at
§824p(b)(1)(C)(i).

' Energy Policy Act of 2005 (EPAct 2005), Title XII, Pub. L. No
109-58, 119 Stat. 594 (2005) (adding new §216 tothe FPA, codified
at 16 U.S.C. §824p)

2

In the broader context of EPAct 2005, transmission
line siting is only one element among many in
Congress’ multifaceted energy policy reform.” As the
Senate stated, “(t]he purpose of the measure is to
provide a comprehensive national energy policy that
balances domestic energy production with conservation
and efficiency efforts to enhance the security of the
United States and decrease dependence on foreign
sources of fuel.” S. Rep. No. 109-78, at 1 (2005). The
scope of EPAct 2005 is broad and covers numerous
topics including, e.g., energy efficiency, renewable
energy resources, natural gas storage, clean coal
technology, and alternative fuels for vehicles, to name
a few. See EPAct 2005 §1, “Table of Contents.”

To the extent Congress addressed transmission
siting, it granted FERC its limited “backstop” siting
authority when, generally speaking, a State either
cannot act, or has failed to act in a timely manner. In
deference to States’ traditional authority over
transmission siting, Congress confined FERC’s new
siting jurisdiction to five specific triggering events: 1)
when a State lacks authority to approve the siting of
transmission facilities; 2) when a State lacks authority
to consider the expected interstate benefits of a
facility; 3) when an applicant does not qualify for a
State permit because it does not serve end users
within the State; 4) when a State, having received a
permit application, has “withheld approval for more
than 1 year,” or 5) whena State conditions its approval
such that the project will not significantly reduce

‘ This is contrary to the impression Petitioners seek to create that
streamlined siting and permitting was the sole purpose of the
statute. Pet. Br. at 5.

3

transmission congestion or is not economically feasible.
16 U.S.C. §824p(b)(1)(A)-(C).

FERC’s backstop siting authority is further
confined to geographic areas that the United States
Department of Energy (DOE) has designated as a
“national interest electric transmission corridor.” Jd.
at §824p(a)(2), (b). A national interest electric
transmission corridor is only an area, designated by
the DOE, where transmission congestion adversely
affects consumers. According to DOE, moreover, the
designation of such a corridor does not indicate that
additional transmission facilities are needed.°

The particular statutory language at issue in this
case, the phrase “withheld approval for more than 1
year,” reflects a change that was made to the language
of an earlier legislative proposal in order to address
concerns that the earlier proposal might have allowed
FERC to override every State transmission siting
decision. The earlier draft of the bill would have
authorized FERC review where a State “has withheld
approval, ... or delayed final approval for more than
one year”. H.R. 6 §16012(b)(1)(B) (as introduced), 149
Cong. Rec. H3130 (Apr. 10, 2003). Commenting on
this initial draft, Representative Henry E. Brown, Jr.
observed that “the transmission siting provision .
seems to make FERC look more lke a Court of

* In DOE’s words, “a National Corridor designation does_not
constitute a finding that transmission must or even should be
built; it does not prejudice State or Federal siting processes
against non-transmission solutions; and it should not discourage
market participants from pursuing such solutions.”. USDOE,
National Electric Transmission Congestion Report, 72 Fed. Reg.
56,992, 57,012 (Oct. 5, 2007) (emphasis added).

4

Appeals for energy companies dissatisfied with State
decisions, than a true backstop[,]” and that “the
potential for FERC review for every siting decision
seems a step backward.” Comprehensive Natl Energy
Policy: Hearings Before the Subcomm. on Energy and
Air Quality of the Comm. on Energy and Commerce,
108” Cong. 13 (2003). Likewise, Representative Rick
Boucher expressed concern that the initial draft bill
“would give the FERC preemptive authority over the
siting of transmission lines[,]” stating that he had
“heard no evidence that would justify removing the
ultimate decision over this new siting from the States
to the Federal level.” Id. at 297.

Importantly, the language of Section 216, as finally
enacted, eliminated the two separate jurisdictional
triggers — “withheld approval” or “delayed final
approval for more than one year” — and replaced them
with the single trigger of “withheld approval for more
than 1 year.” H.R. Rep. No. 108-375 at 264 (2003).
FERC’s then-Chairman Pat Wood, IIJ, explained that
FERC’s understanding was that this single trigger
would confer limited authority upon the agency:

So the States are still in the driver’s seat. It is
only when they cannot act, or they are
prohibited by their law from acting, or they
choose not to act, that it comes to the Federal
Government ....

Keeping the Lights On: The Federal Role in Managing
the Nation’s Elec.: Hearing Before the Oversight of
Gov't Mgmt., the Federal Workforce and the Dist. of
Columbia Subcomm. ofthe S. Comm. on Governmental
Affairs, S. Hrg. 108-277, 108" Cong. 50 (2003).
Although the Senate later failed to agree to the

D

Conference Report, the single trigger was enacted into
Section 1221 of EPAct 2005, and became part of new
Section 216 of the FPA.

In its Notice of Proposed Rulemaking to enact rules
implementing Section 216, FERC did not indicate that
it would interpret the phrase “withheld approval for
more than 1 year” to include a State’s denia! ofa siting
application within one year. Regulations for Filing
Applications for Permits to Site Interstate Electric
Transmission Corridors, 71 Fed. Reg. 36,258 (proposed
June 16, 2006). Nor was this interpretation suggested
by any of the 51 comments FERC received in response
to its Notice of Proposed Rulemaking.

Nonetheless, a majority of FERC commissioners
adopted this interpretation in the preamble to FERC’s
final regulation. Regulations for Filing Applications
for Permits to Site Interstate Electric Transmission
Facilities, 71 Fed. Reg. 69,440, 69,444 726 (Nov. 16,
2006) (Order No. 689); Pet. App. at 70a. FERC’s
interpretation, however, was not promulgated as part
of its regulation, which generally adopted the
language of Section 216, and’ merely repeated the
phrase “withheld approval for more than one year.” 18
C.F.R. §50.6(e)(3)(i).4 The majority reaffirmed their

* Prior to issuing Order 689, FERC did not contend it had
authority to preempt state siting decisions. Astatement issued by
then-FERC Chair Joseph Kelliher instead said the new law gave
FERC “a carefully limited role that supplements state authorities
rather than supplanting them.” Statement of FERC Chair Joseph
T. Kelliher, Zlectric Grid and Summer Heat, House Government
Reform Committee-Subcommittee on Energy and Resources
Hearing at 8, available at http://www.ferc.gov/
eventcalendar/files/200607 121453 18-Kelliher-test-07- 12-06. pdf

6

interpretation on rehearing. Regulations for Filing
Applications for Permits to Site Interstate Electric
Transmission Facilities, 119 F.E.R.C. §61,154, at
W411, 15, 17, 19 (May 17, 2007) (rehearing order). Pet.
App. at 252a, 254a-55a, 256a-57a, 258a.

Notably, FERC’s view of the statute was not
unanimous. Commissioner Suedeen G. Kelly strongly
dissented. Order No. 689, 71 Fed. Reg. at 69,476; Pet.
App. at 240a. Commissioner Kelly stated it was
“nonsensical” to read the statute as the majority did,
because it would render the phrase “for more than one
year’ superfluous. Order No. 689, 71 Fed. Reg. at
69,476; Pet. App. at 242a. Commissioner Kelly also
observed that it “defies common sense to insert the
concept of ‘reject’ or ‘deny’ into [the statutory phrase]
‘withheid approval for more than 1 year after the filing
of an application.” Order No. 689, 71 Fed. Reg. at
69,476; Pet. App. at 241a.

Piedmont Environmental Council (Piedmont), the
Public Service Commission of the State of New York
{(NYPSC), the Minnesota Public Utilities Commission
(Minn. PUC) and Communities Against Regional
Interconnect (CARI) timely petitioned for review of
FERC’s orders, pursuant to 16 U.S.C. §825/(b).
Because the first of these four petitions was filed in the

(July 12, 2006). Then-Chairman Kelliher also said that Section
216 “doles] not preempt the states” but instead provides “a federal
siting process [that] supplements a state siting process”
Statement of Joseph T. Kelliher, Chairman of FERC, Regulations
for Filing Applications for Permits to Site Transmission Facilities,
FERC Docket No. RMO6-12-000 (June 15, 2006), avazlable at
http: //www.ferc.gov/news/statements-speeches/kelliher/2006/
06-15-06-kelliher-C-1.asp.

7

Fourth Circuit, the other three petitions were
transferred to that court, pursuant to 28 U.S.C.
§2112(a)(1),(5), and the cases were consolidated there.
Pet. App. at 15a.

Deciding the case at Step One of the framework
adopted by this Court in Chevron U.S.A. v. Natural
Resources Defense Council, 467 U.S. 837 (1984), a
majority of the Fourth Circuit panel held that the word
“withheld,” in the particular context of the phrase
“withheld approval for more than 1 year,” and in the
larger context of the statute, plainly is not synonymous
with “denied.” Piedmont Envtl. Council v. FERC, 558
F.3d 304, 313 (4th Cir. 2009). Pet. App. at 17a-18a.
First, with respect to the particular context, it
observed that the phrase “withheld approval” within
the larger phrase “withheld approval for more than 1
year” expressly pertains to a State’s continually
recurring failure to act on an application throughout
an ongoing period of one year, but does not pertain to
the instantaneous act of denial. Jd.. Thus, the Fourth
Circuit found that FERC’s attempt to conflate “denied”
and “withheld” would render the entire phrase
“withheld approval for more than 1 year” nonsensical.
558 F.3d at 313; Pet. App. at 18a. (“FERC’s word
substitution ... renders the entire phrase nonsensical

ear

The panel further concluded the broader context,
namely Section 216(b)(1) as a whole, confirmed that
the phrase “withheld approval for more than 1 year”
does not encompass a denial of a permit within one
year. Piedmont, 558 F.3d at 314; Pet App. at 19a-21a.
The Fourth Circuit reasoned that Section 216(b)(1), 16
U.S.C. §824p(b)(1), “provides a carefully drawn list of
five circumstances” under which FERC “may preempt

8

a state ....”. 558 F.3d at 313; Pet. App. at 19a. It
decided that, “[w)hen the five circumstances in
§216(b)(1) are considered together, they indicate that
Congress intended only a measured, although
important, transfer of jurisdiction to FERC.”
Piedmont, 558 F.3d at 314; Pet App. at 20a. The
Fourth Circuit observed that reading “withheld
approval” to include denial of a permit would “render[]
it completely out of proportion with the four other
jurisdiction-granting circumstances|{,]” and “would
mean that Congress has told state commissions that
they will lose jurisdiction unless they approve every
permit application in a national interest corridor.” 7d.
This, it found, was contrary to the limited authority
Congress gave FERC, because it would make it “futile
for a state commission to deny a permit based on
traditional considerations like cost and benefit, land
use and environmental impacts, and health and
safety.” Id. The Fourth Circuit reasoned that “if
Congress intended to take the monumental step of
preempting state jurisdiction every time a_ state
commission denies a permit in a national interest
corridor, it would surely have said so directly.”
Piedmont, 558 F.3d at 314; Pet. App. at 21a (emphasis
in original). Consequently, it reversed FERC’s
interpretation. The Fourth Circuit concluded that
Congress did not intend to authorize FERC to act
where a State has committed the final administrative
act of denying an application for a siting permit within
one year. Piedmont, 558 F.3d at 314; Pet. App. at 22a-
23a.

Judge Traxler dissented, opining that the phrase
“withheld approval” also applies to State denials.
Piedmont, 558 F.3d at 322-23; Pet. App. at 41la-42a.
Judge Traxler relied heavily on FPA §216(b)(1)(C)(ii)

9

which authorizes FERC review when a State has
“conditioned its approval in such a manner that the
proposed construction or modification will not
significantly reduce transmission congestion in
interstate commerce or is not economically feasible.”
16 U.S.C. §824p(b)(1)(C)(ii). Judge Traxler concluded
it was nonsensical for Congress to have allowed FERC
to review permit conditions, but not permit denials.
Piedmont, 558 F.3d at 323-24; Pet. App. at 43a-44a.
He found further support in, inter alia, the legislative
history. Piedmont, 558 F.3d at 324; Pet. App. at 46a-
48a.

The Fourth Circuit denied rehearing after the
panel failed to request that the judges be polled.
Piedmont Envtl. Council v. FERC, No. 07-1651 (4th
Cir. Apr.20, 2009); Pet. App. at 51a.

FERC has not petitioned this Court for a writ of
certiorari to the Fourth Circuit. Rather, only the
various electric power industry intervenors, who
intervened in the Fourth Circuit proceeding in support
of FERC, now seek certiorari.

REASONS FOR DENYING A
WRIT OF CERTIORARI

This is an unremarkable case applying Step One of
the familiar Chevron standard of review to FERC’s
construction of the statutory phrase “withheld
approval for more than 1 year” in light of its context
and the purpose of EPAct 2005 §1221. Because the
Fourth Circuit simply applied traditional principles of
statutory construction to comprehend the relevant
provision’s plain meaning, this case does not present
an important question of Federal law. There is no

10

compelling reason, therefore, to grant a writ of
certiorari.

The Fourth Circuit correctly construed the statute.
That Court properly concluded that, in its specific
context, the word “withheld” cannot be equated to
“denied.” It correctly understood that a “withholding”
of approval is continuous, while a “denial” is
instantaneous, and stops the running of time during
which approval was being withheld. Likewise, the
Fourth Circuit recognized that FERC’s equating of
“withheld” and “denied” reads the words “for more
than 1 year” out of the statute. And, in the broader
context of §1221, the Fourth Circuit properly
concluded that Congress intended to provide FERC
with measured, limited backstop siting authority, in
recognition of Congress’ careful balancing of national
transmission reliability interests against States’
traditional authority in the area of land use regulation.

In the Fourth Circuit’s opinion, the dissent
incorrectly imputed into the statute a purpose of
authorizing FERC to site transmission lines whenever
the State process does not generate either an outright
permit grant or a minimally conditioned one.
Consistent with this misapprehension, the dissent
failed to recognize that State approval can only be
“withheld” while an application is pending. Likewise,
the dissent failed to appreciate why Congress intended
to authorize FERC siting in the event of a State grant
with conditions that may frustrate Federal interests in
relieving transmission congestion, but not necessarily
whenever a State has lawfully denied a permit. State
denials are subject to review in State courts and, by
preserving the primary State role, Congress recognized
that State courts are capable of reviewing the

11

lawfulness and reasonableness of a State permit
denial. Conversely, when a State agency imposes
conditions interfering with the ability of a proposed
line to relieve interstate congestion or rendering a
proposed line uneconomic, Congress authorized a
limited Federal intrusion upon State jurisdiction.
Such circumstances raise questions relating more
directly te federal interests, and potentially triggering
FERC’s technical expertise. See POINT I. A, infra.

Petitioners’ argument that a judicial dissent creates
“ambiguity” invoking Chevron Step Two analysis rests
upon a fundamental misunderstanding of Chevron.
Statutory “ambiguity” under Chevron occurs only
when Congress has implicitly delegated to an agency
authority to resolve the policy question at issue by
leaving a statutory gap for the agency to fill. Because
judicial disagreement cannot substitute for Congress’
intentions, it does not trigger Chevron Step Two

analysis. See POINT I. B, infra.

Nothing in the legislative history cited by
Petitioners expressly resolves the pertinent question
of whether Congress intended to override legitimate
State permit denials. See POINT II. A, infra.
Moreover, Petitioners overlook the DOE’s findings that
transmission economics and market structure present
significant transmission development obstacles that
may overshadow the siting process. See POINT IT. B,
infra. In any event, Congressional policy on electric
transmission remains in flux. There is no urgency,
therefore, demanding this Court’s immediate
attention. See POINT II. C, infra.

Finally, Petitioners incorrectly speculate that siting
applications may halt if FERC cannot review State

12

siting denials. Petitioners offer no basis for assuming
State agencies will act inappropriately in considering
the interstate benefits of proposed lines or that State
courts will not carefully review timely denials to
ensure that interstate benefits were properly
considered. See POINT III, infra.

I. THE FOURTH CIRCUIT MAJORITY
PROPERLY CONSTRUED THE STATUTE BY
EMPLOYING FUNDAMENTAL STATUTORY
CONSTRUCTION PRINCIPLES IN A
STRAIGHTFORWARD MANNER.

A. This is an unremarkable Chevron statutory
construction case, which the Fourth Circuit
decided correctly.

At issue in this case is whether FERC properly
construed the phrase “withheld approval for more than
1 year ....” The Fourth Circuit majority applied Step
One of the familiar Chevron standard and held that
the plain statutory language precluded FERC’s
interpretation. There is nothing remarkable about the
majority’s straightforward application of Chevron.
This case does not involve an “important question of
federal law that has not been, but should be, settled by
this Court,”” Sup. Ct. R. 10(c), and, therefore, it does
not present any compelling reason to grant a writ of
certiorari.

* Because this case does not involve a conflict between federal
and/or state courts, Sup. Ct. R. 10(a), (b), a departure from the
accepted and usual course of judicial proceedings, td. R. 10(a), or
an important federal question decided in a way that conflicts with
relevant decisions of this Court, id. R. 10(c), this reason is the only
potential certiorari ground available to Petitioners

13

The Fourth Circuit supported its interpretation of
the plain language of the statute, through the
straightforward application of principles of statutory
construction, in an analysis that fits squarely within
Step One of Chevron. As this Court has held on
numerous occasions, “(t]he plainness or ambiguity of
statutory language is determined by reference to the
language itself, the specific context in which that
language is used, and the broader context of the
statute as a whole.” Robinson v. Shell Oil Co., 519
U.S. 337, 341 (1997).

1. The Fourth Circuit majority correctly
construed the word “withheld” in its specific
context.

The Fourth Circuit correctly found that the word
“withheld” as used in its specific context is not
synonymous with “denied.” It properly recognized that
the phrase “withheld approval for more than 1 year”
describes when approval has been continuously held
back throughout an ongoing period of one year.
Piedmont, 558 F.3d at 313; Pet. App. at 17a-18a. The
word “withheld” in this context is limited to a
continually recurring failure to act throughout a period
of one year. The majority also understood the converse

-that a denial of an application is a discrete and final
action. Thus, a denial “stops the running of time
during which approval was withheld.” /d. The word
“withheld,” therefore, cannot be equated to the word
“denied” in the specific statutory context.

Similarly, the court below recognized that FERC’s
attempt to substitute “denied” for “withheld” would
render the larger phrase “withheld approval for more
than 1 year” nonsensical. It explained that “the final

14

nature of ‘denied’ conflicts with the continuing nature
of ‘for more than one year.” /d. (emphasis in original).
A permit denial rendered less than one year after the
filing of an application terminates the State agency’s
application process, and nothing in that process would
continue for the remainder of the one-year period.
Petitioners accuse the Fourth Circuit of
inappropriately substituting “action” for “approval”
and therefore not reading the actual words of the
statute. Pet. Br. at 16. In so doing, they isolate one
sentence in the relevant paragraph, but fail to
recognize that the Fourth Circuit considered the entire
phrase “withheld approval for more than 1 year.” In
actuality, the Fourth Circuit concluded that “[t}he
continuous act of withholding approval for more than
a year cannot include the finite act of denying an
application within the one-year deadline.” Piedmont,
558 F.3d at 313; Pet. App. at 17a. The Court properly
attributed to Congress the most natural, common-
sense reading of the statute. United States v. Powell,
423 U.S. 87, 93 (1975).

2. The Fourth Circuit majority correctly
construed the phrase in its broader statutory
context.

Contrary to claims in the Petition, Pet. Br. at 16-17,
the Fourth Circuit correctly construed the statute in
its broader context. Robinson, 519 U.S. at 341. It
properly recognized that Congress intended a
measured transfer of jurisdiction in order to ensure
that a commission (either a State commission or
FERC) is available to make timely decisions on
transmission siting applications within National
Interest Electric Transmission Corridors. Piedmont,
558 F.3d at 314; Pet. App. at 20a. In this manner,

15

Congress balanced national interests against States’
traditional authority in the area of land use regulation,
energy planning and the adequacy of utility service.
The Fourth Circuit explained that §216(b)(1), as a
whole, “provides a carefully drawn list of five
circumstances” where FERC jurisdiction over a permit
application attaches. Piedmont, 558 F.3d at 314; Pet.
App. at 19a Those circumstances are when: 1) the
State lacks siting authority; 2) the State lacks
authority to consider the expected interstate benefits
of a proposed line; 3) the applicant does not qualify for
a State permit because it does not serve end-user
customers; 4) a State commission has “withheld
approval for more than 1 year” after the filing of an
application, or the designation of a National Interest
Electric Transmission Corridor, whichever is later; or
5) a State has imposed conditions that render the line
uneconomic or ineffective to reduce significantly
transmission congestion. Piedmont, 558 F.3d at 314;
Pet. App. at 19a

The four other circumstances — aside from
“withtholding] approval for more than 1 year” —
pertain to when a State either cannot site the line, or
has imposed onerous conditions. Piedmont, 558 F.3d
at 314; Pet. App. at 20a. Petitioners object to the
Court’s observation that FERC’s interpretation would
render it “futile” for the States to do their normal work
of reviewing a line. Pet. Br. at 18. Instead, they argue
that, even if FERC may issue a permit in any case
where a State has not approved a permit within one
year, States would retain the ability to decide
significant routing and other issues, albeit subject to
FERC review. Pet. Br. at 18. But the Fourth Circuit
was correct. FE RC’s interpretation would leave States
having siting authority with no choice but to approve

16

a line, or cede jurisdiction to FERC. FERC’s
interpretation would thus nullify the important and
primary State role that Congress carefully preserved.

Given that the remainder of §216(b)(1) carefully
delineates a limited transfer of authority from the
States to FERC, the Fourth Circuit correctly
recognized that, read as a whole, the statute does not
indicate Congress intended “the sweeping transfer of
jurisdiction” FERC sought. The Fourth Circuit also
noted that, “if Congress had intended to take the
monumental step of preempting state jurisdiction
every time a state commission denies a permit in a
national interest corridor, it would surely have said so
directly.” Piedmont, 558 F.3d at 314; Pet. App. at 2la
(emphasis in_ original). The Fourth Circuit’s
observation is in accord with this Court’s decisions
regarding the interpretation of statutes involving
Congressional! balancing of Federal and State power.
See Wyeth v. Levine, __s—*U'S.. : , 129 S. Ct.
1187, 1195 (2009) (noting that, “filn all pre-emption
cases, and particularly in those in which Congress has
legislated . . . in a field which the States have
traditionally occupied, .. . [the Court] start|s] with the
assumption that the historic police powers of the
States were not to be superseded by the Federal Act
unless that was the clear and manifest purpose of
Congress.”) (internai quotes omitted)).

3. The Fourth Circuit dissent misread the
Statute.

The reasoning of the FERC majority and the
Fourth Circuit dissent (and of Petitioners as well, Pet.
Br. at 17) imputes to Congress a broad statutory
purpose unsupported by the language Congress

17

actually employed. The express language of a statute
is the most reliable evidence of Congressional intent.
United States v. Turkette, 452 U.S. 576, 593 (1981).
This is because “[flederal legislation is often the result
of compromise between legislators and ‘groups with
marked but divergent interests.” Wyeth v. Levine,

US. ; , 129 S.Ct. 1187, 1215 (2009)
(Thomas, J., concurring) (quoting Ragsdale ov.
Wolverine World Wide, Inc., 535 U.S. 81, 93-94 (2002)).
This Court has noted that even under a more liberal
statutory construction standard, it is inappropriate “to
assume that whatever furthers the statute’s primary
objective must be the law” without textual support.
Norfolk S. Ry. Co. v. Sorrell, 549 U.S. 158, 171 (2007)
(quoting Rodriguez v. United States, 480 U.S. 522, 526
(1987) (emphasis in original)).

Here, the Fourth Circuit dissent’s asserted
Congressional objective — to grant FERC jurisdiction
over transmission siting whenever a State process does
not generate an outright grant or minimally
conditioned grant — rests upon an_ uncertain
foundation. For example, Judge Traxler, in describing
the context within which Congress enacted Section
216, relied primarily on a pre-enactment statement
made by Senator Pete V. Domenici. Piedmont, 558
F.3d at 321; Pet. App. at 37a. But the statement of
Senator Pete V. Domenici spoke only in general terms
about avoiding blackouts, providing limited federal
siting authority, and streamlining the siting process to
assure adequate transmission. Jd. It did not address
the particular roles of the States and FERC in the
siting process, and did not address the language that
Congress actually employed.

18

Although Judge Traxler purported to rely upon the
plain meaning of the statutory language, his
discussion of the overall “context” within which
Congress approved Section 216 indicates that his
interpretation was driven not by the particular
language and structure of the statute. Instead Judge
Traxler’s reasoning relies primarily upon a general
statutory purpose that he imputed to Congress. In
Judge Traxler’s words, “(tlhe notion that Congress
would have been willing to ‘trump’ states when they
thwart the goal of significantly reducing transmission
congestion in a national interest [transmission]
corridor by granting permits subject to conditions
FERC determines to be unreasonable but would not be
willing to do so when states thwart the same goal by
denying the permits outright makes no sense to me in
light of the purpose of the legislation.” Jd. Thus,
Judge Traxler’s reading cf “withheld approval for more
than 1 year” was influenced primarily by his view that
Congress had a_ singular purpose of reducing
transmission congestion — a purpose he derived in
large part from the statement of Senator Pete V.
Domenici. Piedmont, 558 F.3d at 321; Pet App. at 37a.
But if Congress intended such a wholesale transfer of
siting jurisdiction to FERC, it could, and would, have
expressly said so. Indeed, Congress did so in the
Natural Gas Act, with respect to interstate gas
transportation facilities. 15 U.S.C. §717f. By first
imputing a statutory purpose, and then interpreting
the statute in light of that purpose, Judge Traxler
misapplied Step One of the Chevron analysis. Under
Chevron Step One, a court must first look to the actual
language of the statute, and seek to ascertain its plain
meaning based on both its specific and general
statutory context.

19

Moreover, Judge Traxler’s dissent (and Petitioners
(Pet. Br. at 17]) failed to apprehend key differences
between outright State permit denials and State
permit grants with conditions that would cause the
project to “not significantly reduce transmission
congestion in interstate commerce or [not be]
economically feasible.” 16 U.S.C. §824p(b)(1)(C)(ii);
Piedmont, 558 F.3d at 324; Pet. App. at 43a-44a.
Permit denials are generally subject to challenge in
State courts. Thus, Petitioners’ fear that a State
decision that is “indefensible based on the evidence
presented” would be unreviewable, is unfounded. Pet.
Br. at 15. Congress properly concluded that a State
court can review and reverse such a decision.

Further, Petitioners err when they argue that it is
illogical to read the statute as allowing FERC to
review permits “encumbered with unreasonable
conditions’ but not permits “denied outright.” Pet. Br.
at 17. In the former case, FERC ‘backstop” siting
authority makes sense, because questions of whether
State permit conditions render a project unable to
significantly reduce interstate transmission
congestion, or cause it to be economically infeasible,
are best resolved with the aid of FERC’s technical
expertise. Congress further recognized that a State
that has granted a permit has less of an interest in
protecting the ability of State courts to review a
decision.® A State that has conditionally approved a

® Petitioners contend that it “could be entirely appropriate for a
state to condition a project on terms that are economically
onerous, depending on the circumstances of the particular
proposal” Pet. Br. at 17. It is hard to imagine such a situation,
however, because a state certifying a line under such
circumstances is either a) mistaken about the wisdom of the

20

line, based on a finding that such line is needed, has
no compelling interest against FERC review of the
conditions the State has imposed. On the other hand,
as the Fourth Circuit correctly observed, a State that
imposes “project-sinking conditions . . . misuses its
authority.” Piedmont, 558 F.3d at 315; Pet. App. at
2la. Congress properly decided that FERC should be
able to review and address any such misuse. Its
decision to employ such a finely-tuned trigger for
federal intrusion contradicts FERC’s claim that it has
jurisdiction whenever a State fails to approve a project
within one year.

Petitioners also fail to justify the dissent’s
reasoning that the continuing effect of a State’s denial
beyond the statutory one-year period constitutes a
“with{holding] approval for more than 1 year.” Pet. Br.
at 15. This is nonsensical because a State’s review
process concludes when a permit application is denied.
A “withholding” on the part of a State only occurs
while a decision is pending. Because a permit
application ceases to be active after a permit denial,
there can be no continuous “withholding” of approval
after such a denial. Contrary to Petitioners’ attempted
analogy, Pet. Br. at 15, one cannot rightly say this
Court has, for over 50 years, continuously withheld
affirmance from parties who sought to preserve
“separate-but-equal schools.” As Petitioners recognize,
“the actual holding was a discrete decision in 1954.”
An accurate characterization would therefore be that
the Court long ago held that separate but equal schools
are unconstitutional. Similarly, a State commission

conditions, or b) should be denying approval because the line can
only be certified on conditions making it uneconomic.

21

denying a permit application does so on a particular
day, and does not continuously “withhold approval”
thereafter.

The tightly restricted State role advocated by
Petitioners, Pet. Br. at 18, including a mere “advisory”
role through State participation in the FERC siting
process, ignores Congressional concerns that FERC not
act as a “Court of Appeals for energy companies
dissatisfied with State decisions.” Comprehensive
Nat'l Energy Policy: Hearings Before the Subcomm. on
Energy and Air Quality of the Comm. on Energy and
Commerce, 108" Cong. 13 (2003).

B. An_ appellate court dissent does not create
statutory “ambiguity” entitling an agency to
judicial deference.

Petitioners’ claim that the Fourth Circuit erred by
not granting FERC’s interpretation deference under
Step Two of Chevron should be rejected. Pet. Br. at 19-
20. In this case, no statutory “ambiguity” exists for
Chevron purposes. Both the Fourth Circuit majority
and dissent applied the de novo standard of Chevron
Step One because they found that the issue should be
decided based upon the plain meaning of the statutory
language. Piedmont, 558 F.3d at 315, 321; Pet. App. at
23a, 38a. Thus, none of the Judges in the Fourth
Circuit found the statute ambiguous in the relevant
sense under Chevron.

Petitioners, however, advance the novel theory that
§216(b)(1)(C) became ambiguous because the Fourth
Circuit panel did not entirely agree on the plain
meaning of the statute. /d. Petitioners, in effect,
argue that literal “ambiguity” 1s equivalent to Chevron

22

“ambiguity.” Petitioners rely upon this alleged
“ambiguity” as a basis for arguing the Fourth Circuit
erred by not proceeding to Chevron Step Two. Pet. Br.
at 20.

This argument fundamentally misconstrues the
meaning of the term “ambiguous” in the context of the
Chevron analysis. “Chevron deference ... is not
accorded merely because the statute is ambiguous and
an administrative official is involved.” Gonzales v.
Oregon, 546 U.S. 243, 258 (2006). Rather, deference to
an agency’s statutory interpretation is granted when
the question requires “reconciling conflicting policies”
and the policy question has been “committed to the
agency’s care by the statute ....” Chevron, 467 U.S. at
845 (quoting United States v. Shimer, 367 U.S. 374,
382-83 (1961)). Thus, “ambiguity” under Chevron is
limited to situations where the agency is “resolving the
competing interests which Congress itself either
inadvertently did not resolve, or intentionally left to be
resolved by the agency charged with the
administration of the statute in light of everyday
realities.” Id. at 865-66. Because of this, Chevron Step
Two is triggered only when Congress placed the agency
in the role of policymaker, such that the statute may
reasonably be read as an implicit grant of authority by
Congress to the agency to decide the question. Here,
however, Congress itself made the policy decisions, by
very carefully delineating when FERC could exercise
its limited “backstop” authority.

Moreover, under Chevron, judicial deference to an
agency's statutory interpretation is only appropriate
when the policy choice the agency seeks to make
depends upon its’ technical expertise. Thus,
“ambiguity” warranting judicial deference turns upon

23

whether “a full understanding of the force of the
statutory policy in the given situation has depended
upon more than ordinary knowledge respecting the
matters subjected to agency regulations.” Chevron,
467 U.S. at 845. In the instant case, the interpretation
of the phrase “withheld approval for more than 1 year”
is well within the competency of courts, and does not
require FERC’s special expertise. Indeed, FERC did
no more than repeat the statutory language in its
regulations. Pet. App. at 194a.

Finally, to find a statute “ambiguous” in the
relevant sense, a court must first find that “Congress
did not actually have an intent ....” Chevron, 467 U.S.
at 845. “If a court, employing traditional tools of
statutory construction, ascertains that Congress had
an intention on the precise question at issue, that
intention is the law and must be given effect.”
Chevron, 467 U.S. at 843 & n.9. The lack of consensus
among the Fourth Circuit judges does not support the
needed finding that Congress did not actually have an
intent. None of the judges believed Congress lacked
intent as to the meaning of the phrase “withheld
approval for more than 1 year” in §216(b)(1)(C).
Conversely, all of the judges concluded that Congress’
intent was clear and unambiguous. Given that none of
the judges below found the statute to be “ambiguous”
within the meaning of Chevron, their disagreement
does not create ambiguity for Chevron review
purposes.

Petitioners’ theory, that a lack of judicial consensus
renders a statute ambiguous such that a court must
defer to the agency’s’ statutory interpretation,
demonstrates a fundamental misunderstanding of
Chevron. Under Chevron, deference is not required

24

merely because judges disagree about the meaning of
a statute. Deference is only appropriate when the
statute can be read as an implicit delegation of
authority to the agency to resolve the matter. See
Chevron, 467 U.S. at 845 (referring to “conflicting
policies that were committed to the agency’s care by
the statute ....”). Disagreement among judges is not
equivalent to a Congressional grant of authority to the
agency. Moreover, Petitioners’ theory is paradoxical,
inasmuch at it postulates a Congressional delegation
of authority to the agency even when none of the
judges on the panel found any such implicit grant by
Congress.

Petitioners’ novel theory’ is’ particularly
unwarranted because it would effectively delegate
power to an agency, even if none of the judges found
that Congress intended the issue to be decided by the
agency. Such a result would not only thwart
Congressional intent, it would also fundamentally
intrude upon the inner workings of the judiciary. By
effectively chilling judicial deliberations, the rule
advanced by Petitioners would improperly frustrate
independent judicial review of the actions of
administrative agencies, even in cases where the
agency seeks to set the outer limits of its powers. Such
a standard of judicial review, which Petitioners offer
without supporting decisional authority, could have
potentially far-reaching adverse consequences.

The cases cited by Petitioners du not support their
“judicial ambiguity” theory. Pet. Br. at 20. In Jn re
Thinking Machs. Corp., 67 F.3d 1021, 1023 (1st Cir.
1995), the First Circuit interpreted a bankruptcy
statute pertaining to rejection of nonresidential leases.
The case did not involve an agency or a regulation, and

25

therefore did not involve judicial review of an agency’s
statutory interpretation within the Chevron
framework. Moreover, the “collision of viewpoints”
language quoted by petitioners, Pet. Br. at 20, refers to
differences of opinion among numerous other courts,
and not to a dissenting judge on a particular panel. Jn
re Thinking Machs. Corp., 67 F.3d at 1025.

The decision in United Mine Workers v. Federal
Mine Safety and Health Review Comm’n, 917 F.2d 42
(D.C. Cir. 1990), is also inapposite. Petitioners’
selective reliance on dicta suggesting a divided agency
panel may indicate “ambiguity” is misleading because
the court itself found the language of the statute to be
“ambiguous.” Pet. Br. at 20. The court’s conclusion
was based on its own analysis, and not upon

disagreement of the agency commissioners. United
Mine Workers, 917 F.2d at 47.

Il. PETITIONERS FAIL TO DEMONSTRATE
THAT CONGRESS DEEMED THE SPECIFIC
STATUTORY LANGUAGE AT ISSUE TO BE
CRITICAL TO NATIONAL ENERGY POLICY.

A. The history of EPAct 2005 does not expressly
address the particular issue that the Fourth
Circuit decided.

Petitioners generally argue that more investment
in transmission infrastructure is needed for electric
system reliability. Pet. Br. at 11-12. Nowhere,
however, do Petitioners expressly assert that State
siting denials are hindering transmission line
construction, or threatening in any way the reliability

26

of the electric grid.’ Indeed, they cannot. At best,
Petitioners point to isolated statements in the
legislative history indicating that EPAct 2005 was
created to address “[sliting challenges” and _ to
“streamline the permitting of siting for transmission
lines.” Pet. Br. at 13. These statements do not
establish, however, that Congress intended to
authorize FERC to override timely State permit
denials. Thus, Petitioners have not shown that the
legislative history of EPAct 2005 sheds light upon the
discrete, narrow question of whether Congress
intended to authorize FERC to act when a State has
denied a siting permit within one year. Notably,
FERC itself acknowledged that the legislative history
is unclear on this question. Rehearing Order, 119
F.E.R.C. 961,154 at 115; Pet. App. at 254a.

B. Transmission infrastructure development. is

affected by issues far more substantial than the
siting approval process.

Petitioners imply that State siting denials — or any
potential for such — are the primary reason for the
electric power industry’s failure to construct needed
transmission infrastructure. Pet. Br. at 11-13. To the
extent there are shortages in transmission capacity,
the primary reasons for such shortages are not state
permit denials but, rather, economics and market

structure, as Congress recognized in enacting EPAct
2005

’ Such denials should be contrasted to state process delays or a
lack of state authority to consider interstate benefits of a line,
which Congress intended to address.

27

In the past, vertically integrated utilities built
transmission mainly to move electricity within their
own geographic service areas. New York v. FERC,535
U.S. at 5 (2002); U.S. Department of Energy, National
Transmission Grid Study, at 3 (May 2002), available
at http://www.ferc.gov/industries/electric/indus-
act/transmission-grid.pdf. In 1996, FERC adopted
rules (pursuant to the Energy Policy Act of 1992, 106
Stat. 2776) to foster a transition to a competitive
wholesale electricity market. Jd. at 10; Promoting
Wholesale Competition Through Open Access Non-
Discriminatory Transmission Services by Public
Utilities, 61 Fed. Reg. 21,540 (May 10, 1996) (Order
No. 888). This competitive market structure gave rise
to two new demands on the transmission grid. First,
wholesale electricity sellers needed to transmit power
to their purchasers —- which often required
transmitting power across utility service territory
boundaries. /llinois Commerce Comm'n v. FERC, 576
F.3d 470, 479 (7th Cir. 2009) (Cudahy, J., concurring
in part and dissenting in part). Second, newly
constructed non-utility generators selling into the
wholesale market required new lines to connect their
output to the grid. Jd.; 18 C.F.R. pt. 35 — Promoting
Transmission Investment through Pricing Reform, 116
F.E.R.C. 961,057, 61,250 at 725 (July 20, 2006).

In 2002, the DOE found that a major barrier to
construction of new transmission facilities was
developers’ uncertainty as to whether they could
realize sufficient earnings on _ their financial
investments in transmission projects. National
Transmission Grid Study at 30. Consequently,
Congress created in EPAct 2005 new FPA §219, which
required FERC to establish’ incentive-based
transmission rates to, inter alia, “provide a return on

28

equity that attracts new investment in transmission
facilities.” EPAct 2005 §1241(a), (b)(2), codified at 16
U.S.C. §824s(a), (b)(2). FERC has found it necessary
to approve rates of return in excess of 12.5% to attract
such investment. 18 C.F.R. pt. 35 — Promoting
Transmission Investment through Pricing Reform, 113
F.E.R.C. 461,182, 61,276 at ]21 (proposed Nov. 18,
2005). As FERC acknowledged in its §219 rulemaking,
the debate over “whether transmission incentives are
necessary to encourage new infrastructure was put to
rest by the plain language of section 219(a).” Order
No. 679 at 419.° Thus, continuing uncertainty as to
return on investment, rather than prompt State
permit denials, is likely the primary obstacle to
transmission infrastructure development.’ Because
this case is not about transmission financing, it does
not present an opportunity for the Court to advance
the construction of new transmission facilities.’®

*The investment incentive problem remains particularly acute for
so-called “merchant transmission lines,” for which the developer
receives payment via private agreements, rather than by rates
established through regulatory and/or planning processes.
Chinook Power Transmission, 126 F.E.R.C. 461,134, 61,767 at 445
(2009).

* In fact, one of the pending siting applications Petitioners point
to in their petition (at 9) was withdrawn by the applicant one
week after FERC refused to alter the -cgional grid operator's
economic planning process so as to allow the project to receive
incentive-based rates under the grid operator's tariff. N.Y. Indep
Sys. Operator, Inc., 126 F.E.R.C. 161,320, 18-43 (2009) (order on
reh'g).

’ Another major factor affecting investment in transmission
facilities is the allocation of costs among electric utilities. ‘That
topic was recently addressed by the United States Court of
Appeals for the Seventh Circuit. Jld/inois Commerce Comm'n, 576

29

C. Siting-related legislation remains a work in
progress.

The overall field of electric transmission policy
remains in flux. Congress continues to refine its
approach to electric transmission facilities siting. In
light of new federal policy fostering renewable energy
facilities construction, the House of Representatives
passed the American Clean Energy and Security Act of
2009, that would further tailor FERC’s siting
jurisdiction. H.R. 2454, 111" Cong. (2009)."’ This bill
would expedite deployment of new transmission
capacity to connect such renewable energy facilities to
the power grid. /d. at §151. As a practical matter,
therefore, there is no urgency warranting the Court’s
attention because Congress is actively dealing with
transmission siting issues.

ii NO HARM WILL RESULT FROM
ALLOWING THE FOURTH CIRCUIT'S
DECISION TO STAND.

Petitioners overstate the potential consequences of
this Court's denial of certiorari. They speculate that
some siting applications will not be filed if State siting
denials cannot be reviewed by “a body taking a broader
regional or national perspective.” Pet. Br. at 21-22.
This argument fails to credit Congress’ express
decision to preserve the primary siting jurisdiction of
States having legal authority to consider the expected

F.3d 470 The case was remanded to FERC for further
proceedings

'' A Senate version was introduced by Senators Kerry and Boxer
on September 30, 2009

30

interstate benefits of proposed transmission. 16
U.S.C. §824p(b)(1)(A)(ii)). Congress did this because it
recognized that the States directly and materially
benefit from the interconnected electric grid and,
therefore, have a compelling local interest in
considering the interstate benefits of proposed
transmission facilities. Petitioners’ contrary
implication that States are entirely parochial when
reviewing proposed transmission facilities is baseless.
Furthermore, inherent in Petiti»sners’ speculation is
the notion that a State court reviewing a State
agency's siting denial would fail to give effect. to
Cengress’ implicit directive to consider interstate
benefits. Petitioners offer no basis for their
presumptions that State courts would act
inappropriately in reviewing State agency decisions.

The worst-case scenario for transmission
developers is that the Fourth Circuit’s decision will
encourage them to work closely and cooperatively with
State siting authorities. This can hardly be perceived
as a deleterious consequence.

31

CONCLUSION

For the foregoing reasons, Petitioners do not state
any compelling reasons for granting the petition for a

writ of certiorari.

denied.

Therefore, the petition should be

Respectfully Submitted,

Peter McGowan

General Counsel

Jonathan Feinberg

Counsel of Record

Solicitor

John C. Graham

Sean Mullany

Assistant Counsel

Of Counsel

Public Service Commission
of the State of New York

Three Empire State Plaza

Albany, New York 12223-1350

(518) 474-5597

Lynn R. Coleman

Willard Todd Benson

Of Counsel

Piedmont Environmental Council
45 Horner Street, PO Box 460
Warrenton, Virginia 20188

(540) 347-2334

(202) 371-7600

32

Lori Swanson

Attorney General

State of Minnesota

Anna E. Jenks

Assistant Attorney General

Atty. Reg. No. 0342737

445 Minnesota Street, Suite 1100
St. Paul, Minnesota 55101-2128
(651) 282-5735 (Voice)

(651) 296-1410 (TTY)

Dated: October 21, 2009

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386017_1016%3A2. Public record. Not legal advice.