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

Supreme Court, U.S.

FILED

OCT 2 1 2009

OFFICE OF THE CLERK

No. 09-343

‘

IN THE

Supreme Court of the Anited States

EDISON ELECTRIC INSTITUTE, ET AL.

U.

PIEDMONT ENVIRONMENTAL COUNCIL, ET AL.

On Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Fourth Circuit

BRIEF OF AMICI CURIAE

THE HONORABLE

JOSEPH T. KELLIHER,

ELIZABETH ANNE MOLER,

PATRICK HENRY WOOD III, AND

JAMES J. HOECKER

IN SUPPORT OF PETITION FOR

WRIT OF CERTIORARI

Joseph T. Kelliher

Counsel of Record

FPI. Group, Inc.

801 Pennsylvania Ave., N.W.

Washington, D.C. 20004

202-347-7082

Attorney for Amict Curtae

Iecat Pararreme 110 Wachingcsean TM’ a 30?.747-2400 o lecalanenrce cam

TABLE OF CONTENTS

Page

TABLE OF CITED AUTHORITIES .................... iii

INTEREST OF AMICI CURTAE................cseeceseeeees 1

SUMMARY OF ARGUMENT. ........0........ceeseeeecceeees 2

PS citi cles dadanassiansinainchasdestiatinaeavinnen a

I EFFECTIVE FEDERAL TRANSMISSION

Il.

SITING IS IN THE NATIONAL INTEREST

A.

The National Interest in the Interstate

Transmission System Has Evolved........ 6

. Effective Federal Transmission Siting

Is Essential to a National Clean

I I iiss cc caccuksnincdadankcsencsxendenes 10

. State and Local Siting of Interstate

Transmission Facilities Has Proven

Inadequate to Meet the

I i s cuisneasenenesecs 14

CONGRESS INTENDED TO GRANT FERC

SITING AUTHORITY WHERE STATES

HAVE DENIED PROJECT APPROVAL.... 19

11

A. National Energy Policy Identified

State Rejection of Siting Approval as

a National Problem and Proposed

Federal Preemption .............cccccccesecscssseee 19

B. Legislative History Manifests

Congressional Intent to Grant FERC

Authority to Site Transmission When

States Have Denied Approval ............... 21

C. Congress Did Not Intend a Nullity ...... 27

CON CLUSION ocecessccciis alae tesccsescccssensccsees 28

lil

TABLE OF CITED AUTHORITIES

Page

Federal Cases:

Consumers Union of the United States v. Sawhill,

Sis F.Oe LEED Ce: BD. LTO vasscsoniisesaversissvssemsn 27

FPC v. Florida Power & Light Co., 404 U.S. 453

sR MERTON A Onde eee uae. Res: 6

Morgan Stanley Capital Group Inc. v. Public Util.

Dist. No. 1 of Snohomish Cty, 554 U.S. __, 128 S.

OR: Tee iva hxckddavecexdasieinkceisinicnev 8

New York v. FERC, 535 U.S. 1 (2002).................2.. 3,6

Piedmont Envtl. Council v. FERC, 558 F.3d 304

CP EE vs Ss So ccns ek deceneccsnessccusicucvecaatiere 4, 14, 18, 27

Federal Statutes:

Energy Policy Act of 1992,

aad. 5. BR Rete I wi sik v cee chen staneikassescterannees 7

Energy Policy Act of 2005, Pub. L. No. 109-58, §

1221 (2005) (codified at

1G U.S.C. © CG CD io vvvnnevccccstanvacecicccassassssscte Oe Oe

Federal Power Act § 201,

1G U.S. © Be Ce is vce sc venedascsnsendsisssustachsn tebe 14

1V

Federal Power Act § 216(a),

ee I I id cae nd vesieheixcd<oapscanasedacensucsss 5

Natural Gas Act § 7(h),

15 U.S.C. § 717f (h) (2008) ..c..ceccccccccecsceceececesveseeeeee: 16

Natural Gas Act Amendments of 1947, Pub. L.

NG. BO-2EG, Sh BCRE. SOS (ROS) vccccccccccecccscscccssesecescss 16

Agency Orders:

Promoting Wholesale Competition Through Open

Access Non-discriminatory Transmission Services

by Public Utilities; Recovery of Stranded Costs by

Public Utilities and Transmitting Utilities, Order

No. 888, 61 Fed. Reg. 21540 (1996), FERC Stats.

& Regs. 4] 31,036 (1996), aff'd in relevant part sub

nom., Transmission Access Policy Study Group v.

FERC, 225 F.3d 667 (D.C. Cir. 2000), aff'd sub

nom., New York v. FERC, 535 U.S. 1 (2002). ........... 7

Regional Transmission Organizations, Order No.

2000, 65 Fed. Reg. 809 (2000), FERC Stats. &

Regs. 4 31,089 (1999), aff'd sub nom., Public Util.

Dist. No. 1 of Snohomish Cty v. FERC, 272 F.3d

re ee rE ED cis csc cdacuchs0usasnciccnccouacdans etre aces 7

Other Authorities:

American Clean Energy and Security Act of 2009,

H.R. 2454, 111% Cong. § 311 (2009).................... 10, 13

Clean Energy Jobs and American Power Act, S.

D7 OG, BEE ROME, THE. FCO vv cncccsccccccscsncecsesssncse 10,13

Comprehensive National Energy Policy, Hearings

Before the H. Comm. on Energy and Committee,

Sub. on Energy and Air Quality, 108 Cong.

Electric Supply and Transmission Act of 2001,

Hearings Before the H. Comm. on Energy and

Committee, Sub. on Energy and Air Quality,

a a acc gundvesvecobusdseunronsiaornanih 23

Energy Policy Act of 2004,

108* Cong. § 1221(a) (2004)................ eee cece ee 25

H.R. 1644, 108** Cong. § 7012 (2003).................. 21, 25

H.R. 3406, 107th Cong. § 402 (2001).............. 21, 22, 20

H.R. 6, 108% Cong. § 16012 (2003); H.R. 1644,

RR NN, PPE COD oni cnceds coscavescedssaceccsnuses 21, 25

H.R. 4503, 108t Cong. § 1221(a) (2004) .................. 2]

H.R. 6, 109% Cong. § 1221(a) (2008S) .................0.0040. 21

H.R. Rep. No. 108-65, Part I, at 170, 342 (2003)..... 25

Mandatory Reporting of Greenhouse Gases, 40

C.F.R. pts. 86, et seq. (2009) ............. WP ALA NIT eR Pa LO

v1

Midwest Independent Transmission System

Operator, Inc., et al., Joint Coordinated System

soos. s0< Sansanas soles vusaeversdauiincbedce oes 12, 15

Nat'l Council on Elec. Policy, Electricity

Transmission: A Primer (2004) ................ccccceeeuseeeees 14

Nat'l Comm'n on Energy Policy, Ending the

ee | 11

Nat'l Energy Policy Dev. Group, National Energy

oa ole ga cae vee neneeeeinvineeaeveiies 19, 20

Prevention of Significant Deterioration and Title

V Greenhouse Gas Tailoring Rule, 74 Fed. Reg.

(proposed Sept. 30, 2009) (to be codified at

40 C.F.R. pts. 51, 52, 70, 71) cccccccccccccesesceseseseesvscereees 10

Proposed Endangerment and Cause or Contribute

Findings for Greenhouse Gases Under Section

202(a) of the Clean Air Act, 74 Fed. Reg. 18886

(proposed Apr. 24, 2009) (to be codified at 40

Proposed Rulemaking to Establish Light Duty

Vehicle Greenhouse Gas Emission Standards and

Corporate Average Fuel Economy Standards, 74

Fed. Reg. 49454 (proposed Sept. 28, 2009) (to be

codified at 40 C.F.R. pts. 86 and 600)................. 10, 13

S. 2095, 108t» Cong. § 1221(a) (2004)........ccccccccseeees 21

U.S. Dep't of Energy, National Transmission Grid

re Lk Le ky vageNencvanceeneaxtes 8, 15

vu

U.S. Dep’t of Energy, 20% Wind Energy By 2030

Sep iiiiccudcsnsss sheusss ates nccunschnemmeabaatacenenaecaial in 9, 12, 14, 15

U.S. Dep’t of Energy, Electric Power Outages in

the Western United States July 2-3, 1996 (1996) ... 15

U.S.-Canada Power System Outage Task Force,

Finai Report on the August 14, 2003 Blackout in

the United States and Canada: Causes and

FROCOMMMONGACIONS (ZOOS) .........ccccseccccscccccescssccccsssesccces 8

BRIEF OF AMICI CURIAE

THE HONORABLE

JOSEPH T. KELLIHER,

ELIZABETH ANNE MOLER,

PATRICK HENRY WOOD III, AND

JAMES J. HOECKER

IN SUPPORT OF PETITION FOR

WRIT OF CERTIORARI

INTEREST OF AMICI CURIAE

The amici! are former chairmen of the Federal

Energy Regulatory Commission (FERC), the principal

regulator of the bulk power industry of the United

States. The amici collectively served in that capacity

during 1993-2009. During this period, Congress

considered legislation to establish effective federal

transmission siting authority, resulting in enactment

of section 216 of the Federal Power Act, and FERC

issued final rules implementing its new siting

authority, the rules reviewed by the Fourth Circuit.

The amici have been responsible for the regulatory

initiatives and responses to Congressional directives

identified in this brief and have testified before

Congress on transmission policy matters in their

former official capacity. They have also participated in

legislative consideration of federal transmission

' No counsel for a party authored this brief in whole or in part

and no counsel or party made a monetary contribution towards

the preparation or submission of this brief; no person made a

monetary contribution towards the preparation or submission of

this bmef other than the amici curiae and their counsel, and FPI.

Group, Inc., which contributed printing costs. All parties have

consented to the filing of this brief in letters filed with the Clerk.

2

legislation. The amici are experts on transmission

policy matters, collectively have decades of experience

on energy policy, and offer an informed perspective on

the policy consequences of the Fourth Circuit's

decision. The amici are all participating in their

individual capacities.

SUMMARY OF ARGUMENT

This case involves a matter of pervasive national

interest. The Fourth Circuit decision nullifics the

intent of Congress to strengthen the interstate electric

transmission system. It undermines two decades of

national policy designed to promote wholesale

competition across the increasingly stressed interstate

grid. It also hinders the expansion of transmission

that is critical to the development of renewable

resources like wind and solar power.

The nation's transmission system is aging, does not

adequately serve major renewable resources where

they exist in abundance, and is inadequate to meet the

needs of the digital age and growing demands for

reliable electric power. Although states remain the

initial arbiters of which transmission projects can be

built, only federal authority can guarantee that

facilities that serve the needs of competitive wholesale

markets and customers across a region can be sited on

the basis of the broad public interest.

This case is about whether an individual state

should be empowered to veto critical interstate

transmission projects, contrary to the statutory

3

scheme adopted by Congress. It is about sacrificing a

key building block in the edifice of national

competitive electric policies that have emerged with

the support of several Congresses, four

Administrations, and numerous major regulatory

orders over a quarter century, including those to

create transmission open access and to encourage

regional] transmission organizations. We respectfully

urge the Court to review the decision below.

The federal siting provisions of the bipartisan

Energy Policy Act of 2005 mark the first time in 70

years that Congress reconsidered its decision in 1935

to leave siting of interstate electric transmission

facilities in the hands of state and local governments.

Energy Policy Act of 2005, Pub. L. No. 109-58, § 1221

(2005) (codified at 16 U.S.C. § 824p (2008)). Over

those seven decades, electricity delivery and power

markets had fundamentally changed. What was once

a host of individual local delivery systems had evolved

to large interstate and even international grids.

Markets that were once local and noncompetitive

evolved into robust competitive interstate wholesale

markets. New York v. FERC, 535 U.S. 1, 7-8 (2002).

Congress recognized these changes and enacted

section 216 of the Federal Power Act, which provides

for federal siting of electric transmission facilities,

under specific circumstances, in “national interest

electric transmission corridors.” 16 U.S.C. § 824p

(2008). That provision was preemptive, but not

exclusive, since it allowed state and local governments

to continue to site transmission facilities. Section 216

is part of a comprehensive federal scheme to set and

qd

enforce grid reliability standards, assure open

transmission access and encourage grid investment,

building upon reforms undertaken by FERC to ensure

a transmission system adequate to the needs of the

21** century.

Against this backdrop, the Fourth Circuit justifies

a restrictive interpretation of section 216 by asserting

that the problem Congress was trying to solve was

state inaction, and imposition of “project-killing

conditions.” Piedmont Envutl. Council v. FERC, 558

F.3d 304, 314-15 (4% Cir. 2009). This conclusion is

based on speculation and inferences drawn by the

court from the statutory language rather than resort

to the legislative history. A review of the legislative

history of section 216 reveals that Congress was

indeed concerned not only about state siting delays but

also about state denials of transmission siting

approval, and fully intended to preempt states and

allow federal transmission siting where states had

denied approval.

The result of the Fourth Circuit decision is

nullification of the comprehensive statutory scheme

erected by Congress with respect to U.S. transmission

policy. The goal of Congress was to strengthen the

interstate power grid to support competitive markets,

assure reliability, and promote development of

renewable energy capacity. Congress recognized that

development of large interstate transmission projects

is necessary to accomplish those policy goals, and also

appreciated that state and local siting is poorly suited

for development of such projects. For that reason,

Congress provided for federal transmission siting.

By enacting the first change in transmission siting

law in 70 years on a bipartisan basis, Congress

intended to change the status quo and provide for

siting decisions that reflect a national or regional

perspective, rather than single state parochial views.

The Fourth Circuit decision serves largely to restore

the status quo ante, by vitiating federal siting

authority in an area that was of great interest to

Congress — where states have rejected transmission

projects. The Fourth Circuit decision frustrates the

will of Congress.

While federal regulation indisputably extends to

the use of the interstate electric transmission system

and to ensuring reliability of the grid, the Fourth

Circuit has interpreted Congress’ intent = as

maintaining each state's veto authority over new

interstate electric transmission facilities no matter

how vital to the national interest. Indeed, this is held

by the Fourth Circuit to be Congress’ intent even

where the subject facilities are in “a national interest

electric transmission corridor’ important to economic

growth and vitality, electricity supply diversification,

energy independence, and national defense and

homeland security. Federal Power Act § 216(a), 16

U.S.C. § 824p(a) (2008).

6

ARGUMENT

I. EFFECTIVE FEDERAL TRANSMISSION

SITING IS IN THE NATIONAL INTEREST.

A. The National Interest in the Interstate

Transmission System Has Evolved.

When the principal federal electricity law, the

Federal Power Act, was passed, the U.S. could not

fairly be said to have had an interstate grid. New

York, 535 U.S. at 5. Over the intervening 75 years,

however, as technology for long-distance transmission

improved and isolated’ electric systems were

interconnected, what once was a series of local delivery

networks became an interstate grid. Jd. at 1. Today’s

rrid is not only interstate but international, since the

U.S. transmission system is fully interconnected with

Canada and part of Mexico. Because the grid in the

Lower 48 is interstate, any transmission facility

attached to the interstate grid is interstate, even if it

does not cross a state line. HPC v. Florida Power &

Light Co., 404 U.S. 453, 463 (1972).

The interstate transmission system Is now vital to

three areas of great national interest. First, the

transmission grid supports competitive markets, by

removing constraints that result in higher prices and

greater price volatility. The federal role with respect

to interstate transmission established by the Energy

Policy Act of 2005 is only the latest in a series of

important statutory and regulatory reforms that

Congress and FERC have undertaken to promote

wholesale competition through transmission open

7

access.2. The Energy Policy Act of 2005 is a natural

extension of these past reforms and recognizes that the

competitive benefits of transmission open access will

be limited if the grid itself is constrained.

This Court has recognized the relationship between

greater competition and the evolution of the

transmission grid:

In recent decades, the Commission has

undertaken an ambitious program of market-

based reforms. Part of the impetus for those

changes was technological evolution.

Historically, electric utilities had been vertically

2 The Energy Policy Act of 1992, Pub. L. No. 102-486, permitted

the creation of new entities, “exempt wholesale generators,” that

could generate and sell electncity at wholesale without being

regulated as public utilities. FERC Order No. 888 sought to

eliminate undue discrimination in the provision of transmission

service by requiring that each public utility with transmission

facilities offer unbundled transmission service pursuant to a

standard Open Access Transmission Tariff (pro forma OATT).

Promoting Wholesale Competition Through Open Access Non-

discriminatory Transmission Services by Public Utilities; Recovery

of Stranded Costs by Public Utilities and Transmitting Utilities,

Order No. 888, 61 Fed. Reg. 21540 (1996), FERC Stats. & Regs. 4

31,036 (1996), aff'd in relevant part sub nom. Transmission Access

Policy Study Group v. FERC, 225 F.3d 667 (D.C. Cir. 2000), aff'd

sub nom. New York v. FERC, 535 U.S. 1 (2002). FERC Order No.

2000 encouraged utilities to voluntarily join independent regional

transmission organizations that would operate their transmission

facilities on a non-discriminatory basis and administer the OATT.

Regional Transmission Organizations, Order No. 2000, 65 Fed.

Reg. 809 (2000), FERC Stats. & Regs. | 31,089 (1999), aff'd sub

nom. Public Util. Dist. No. I of Snohomish Cty v. FERC, 272 F.3d

607 (D.C. Cir. 2001).

8

integrated monopolies. For a_ particular

geographic area, a single utility would control

the generation of electricity, its transmission,

and its distribution to consumers. Since the

1970's, however, engineering innovations have

lowered the cost of generating electricity and

transmitting it over long distances, enabling

new entrants to challenge the _ regional

generating monopolies of traditional utilities.

To take advantage of these changes, the

Commission has attempted to break down

regulatory and economic barriers that hinder a

free market in wholesale electricity. It has

sought to promote competition in those areas of

the industry amenable to competition, such as

the segment that gencrates electric power, while

ensuring that the segment of the industry

characterized by natural monopoly—namely, the

transmission grid that conveys the generated

electricity—cannot exert monopolistic influence

over other areas.

Morgan Stanley Capital Group Inc. v. Public Util. Dist.

No. 1 of Snohomish Cty, 554 U.S. __, 128 S. Ct. 2733,

2740 (2008) (internal citations omitted).

Second, the transmission grid supports reliability.

In the years leading up to enactment of the Energy

Policy Act of 2005, the U.S. had experienced eight

large regional blackouts, including the largest

9

blackout in U.S. history in August 2003.3 In the Act,

Congress sought to help avoid future such events by

enacting the siting provisions at issue here, as well as

a comprehensive federal program of mandatory

reliability standards. Energy Policy Act § 1211.

Third, the transmission grid is necessary to

mromote develonment of YPOoONOAwWA yle onowvre VOCMIIMYMOAOIC

K+ Wah uw Aw Vavpstawaty wa A wssw WV ar vi€ \W4sw dt fy Aww VYVUuE“swvUY 5

which tend to be concentrated in areas remote from

the current interstate grid. ‘This matter was

important to Congress in 2005, and, as discussed in

detail in the next section, it has become even more

important as national energy and environmental

policies lead the country to develop clean energy

supplies. U.S. Dep’t of Energy, National Transmission

Grid Study xi, 4, 10, 19-21 (2002); U.S. Dep't of

Energy, 20% Wind Energy By 2030 93, 100 (2008)

(hereinafter “Wind Energy Study”).

Congress recognized the vital national interest that

transmission serves and understandably decided to

end the states’ exclusive role in siting transmission

facilities so that the national interest could be

protected when necessary.

> U.S.-Canada Power System Outage Task Force, Final Report on

the August 14, 2003 Blackout in the United States and Canada:

Causes and Recommendations, Chapter 7 (2004).

10

B. Effective Federal Transmission Siting Is

Essential to a National Clean Energy

Policy.

The United States Government is in the process of

implementing a new energy and environmental policy

designed to sharply reduce carbon emissions from

electric generation facilities and other sources, while

assuring adequate electricity supply at a reasonable

cost.1. This reduction will be accomplished in large

part by changing U.S. electricity supply away from use

4 President’s Remarks on Energy Legislation, Daily Comp. Pres.

Doc. (June 26, 2009), available at

http://www.gpoaccess.gov/presdocs/2009/DCPD-20090041 3. pdf;

Statement of Admunistration Policy on H.R. 2454, American

Clean Energy and Security Act of 2009, Executive Office of the

President, Office of Management and Budget (June 26, 2009),

available at

http://www.whitehouse.gov/omb/assets/sap_111/saphr2454h_2009

0626.pdf; Proposed Endangerment and Cause or Contribute

Findings for Greenhouse Gases Under Section 202(a) of the Clean

Air Act, 74 Fed. Reg. 18886 (proposed Apr. 24, 2009) (to be

codified at 40 C.F.R. ch. 1); Proposed Rulemaking to Establish

Light Duty Vehicle Greenhouse Gas Emission Standards and

Corporate Average Fuel Economy Standards, 74 Fed, Reg. 49454

(proposed Sept. 28, 2009) (to be codified at 40 C.F.R. pts. 86 and

600); Prevention of Significant Deterioration and Title V

Greenhouse Gas Tailoring Rule, 74 Fed. Reg. ___ (proposed Sept.

30, 2009) (to be codified at 40 C.F.R. pts. 51, 52, 70, 71);

Mandatory Reporting of Greenhouse Gases, 40 C.F.R. pts. 86, 87,

8Y, YO, 94, YR, 1084, 1039, 1042, 1045, 1048, 1061, 1054, 1065

(2009); American Clean Energy and Security Act of 2009, H.R.

2454, 111t Cong. § 311 (2009); Clean Energy Jobs and American

Power Act, S. 1733, 111% Cong. tit. I (2009).

1]

of fossil fuels, in part by technology deployment, in

part by other means.®

If the U.S. electricity supply is going to change, the

grid must also change, since the grid is merely a

delivery system. The central challenge facing U.S.

transmission policy now is the need to develop a clean

energy grid that can efficiently delwer an entirely

different electricity supply across regional power

markets.

Renewable energy or clean energy potential is not

evenly distributed in the United States, and some

regions have a much greater endowment than others.

Wind Energy Study at 24. This is illustrated by a map

of solar and wind resources prepared by the National

Commission on Energy Policy, Ending the Energy

Stalemate, Table 4-14 (2004):

U.S. Energy Info. Admin., Energy Market and Economic

Impacts Of H R. 2454, The American Clean Energy and Security

Act of 2009 ix (2009); Electric Power Research Inst., Creating Our

Future: Meeting The Electricity Technology Challenge 20 (2009),

available at

http://mydocs.epri.com/docs/SummerSeminar09/SpeckerO9SumSe

m.pdt; McKinsey & Co., Reducing U.S. Greenhouse Gas

Emissions: How Much at What Cost”? xv, 58-66 (2007).

Average Solar Radiation (kWh/m?/day) Wind Power Class

MMB sseoo MMB 604s HM 65-70 oe = Me

Good Better Best Good Botte + Best

Duta Source. Adapted trom National Renowablo nergy lahorstory, 204

Regions with the greatest natural endowment of

renewable energy potential tend to be remote from the

interstate power grid, isolated by transmission

constraints. Wind Energy Study at 75. Maximizing

U.S. renewable energy supplies is a core element of

clean energy and environmental policy. Jd. at 13-14,

107; Midwest Independent ‘Transmission System

Operator, Inc., et al., Joint Coordinated System Plan

‘08 at 7.

If the United States is going to maximize its

renewable energy supply, it must build out a clean

energy grid and remove those constraints. Wind

Energy Study at 2, 10-12, 93, 95-98; Joint Coordinated

System Plan ‘08 at 4-9. Effective federal siting of

transmission facilities is necessary to develop that grid

in the timeframe envisioned by carbon policy.

13

National carbon and clean energy policy, expressed in

pending legislation and regulatory orders issued by

the U.S. Environmental Protection Agency (EPA),

envisions significant reductions of carbon emissions

beginning as soon as 2012.6 Significantly, EPA has

initiated a series of actions to implement this new

national policy,’ and legislation has advanced in

|

Conegress.®

There are important policy consequences to

continued reliance on state and local transmission

siting procedures and the lack of effective federal

transmission siting. It means the U.S. will expand

grid capacity at a much slower rate than would be

possible under federal transmission siting. It means

development of the highest-quality, low-cost renewable

energy potential in regions remote from the grid will

be forestalled or postponed. It also means the change

in U.S. electricity supply will occur much more slowly

than would be possible under federal siting.

®° American Clean Energy and Security Act of 2009 § 311; Clean

Energy Jobs and American Power Act tit. 1; Proposed Rulemaking

to Establish Light Duty Vehicle Greenhouse Gas Emission

Standards and Corporate Average uel Economy Standards, 74

Fed. Reg. 49454, 49460 (proposed Sept. 28, 2009) (to be codified at

40 C.F.R. pts. 86 and 600).

7 See supra note 4

8 The U.S. House of Representatives passed H.R. 2454, supra note

4, on June 26, 2009, and bills are pending in the Senate.

14

C. State and Local Siting of Interstate

Transmission Facilities Has Proven

Inadequate to Meet the Evolving Need.

Until enactment of the Energy Policy Act of 2005,

the United States sited electric transmission facilities

under a 1935 statute that reflected the nature of the

grid as it was at the time, relying on state and local

siting of privately owned transmission lines.

Piedmont, 558 F.3d at 310. In 1935, electricity

delivery was essentially local in nature, and it is thus

not surprising that the Federal Power Act did not

provide for federal transmission siting by the Federal

Power Commission, the predecessor agency to the

FERC. Instead, Congress reserved siting of

transmission facilities to the states. Federal Power

Act § 201, 16 U.S.C. § 823c (2008). State siting

authorities and policies vary substantially, with some

states vesting sole authority in a single state agency or

public utility commission while others delegate it to a

host of affected local governments. Nat’ Council on

Elec. Policy, Electricity Transmission: A Primer 11

(2004).

State and local siting can be an efficient way to site

certain transmission facilities, particularly smaller

single state projects that benefit the siting state.

National Transmission Grid Study at E-7, E-42. But

state and local siting is poorly designed to site large

interstate transmission projects whose benefits extend

to an entire region or the nation. Jd. at 53, E-42; Wind

Energy Study at 99. However, it is precisely this

category of transmission project that needs to be built

to meet national energy and environmental policy

15

goals, including supporting competitive markets, by

removing constraints that result in higher prices and

greater price volatility, assuring grid reliability, and

maximizing renewable energy development. National

Transmission Grid Study at 58; Midwest Independent

Transmission System Operator, Inc., et al., Joint

Coordinated System Plan ’08, 7, 9 (2008).

There are two principal problems with state and

local siting of large interstate transmission projects.

First, state and local transmission siting proceedings

of large projects take too long, especially when

approval is needed from multiple jurisdictions. It can

take more than ten years to obtain siting approval for

transmission projects that cross multiple states. For

example, the Jacksons Ferry transmission line

between Virginia and West Virginia, involving two

state commissions and a federal land agency, took 13

years to site, and less than three years to construct.

That is true even though the project was recognized as

critical to the reliability of the Eastern grid. U-S.

Dep’t of Energy, Electric Power Outages in the

Western United States, July 2-3, 1996, 82, 85 (1996).

The great length of the transmission siting process

is a particular problem for renewable energy projects

such as wind and solar farms. Renewable resources

are typically located in remote areas of the country.?

Renewable projects can be built quickly, but are

unlikely to be built in locations where they lack access

” Wind Energy Study at 75

16

to an unconstrained interstate power grid and would

face unpredictable curtailments that interrupt sales.

One way to demonstrate the failure of state and

local transmission siting of large interstate

transmission projects is to contrast it with what is

possible under federal siting of interstate natural gas

pipelines, where federal siting authority is exclusive

and preemptive.'!° In recent years FERC has sited

thousands of miles of interstate natural gas

pipelines,!! while states have sited very little multi-

state electric transmission lines.!* Furthermore, it is

possible to site very large interstate natural gas

pipelines in a matter of months, while it can take

years for states to site much smaller electric

0 Natural Gas Act § 7(h), 15 U.S.C. § 717f (h) (2008). The

original Natural Gas Act also reserved siting of interstate natural

gas pipelines to the states. But in 1947 Congress concluded that

reliance on state and local siting of these interstate facilities had

failed and amended the Act to provide for exclusive and

preemptive federal siting. Natural Gas Act Amendments of 1947,

Pub. L. No. 80-245, 61 Stat. 459 (1947).

'! Between 1997 and 2002, FERC sited 9,316 miles of interstate

natural gas pipelines. Fed. Energy Regulatory Comm'n,

Approved Pipeline Projects (2009), available at

http://www .ferc.gov/industries/gas/indus-act/pipelines/approved

projects.asp.

2 Between 2000 and 2007, states sited 668 miles of cross-border

lines 230 kV and higher. Fed. Energy Regulatory Comm'n

Electnic Transmission Siting, presentation (2007), shde 2

avatlable at

http://www .ferc.gov/industries/electric/indus-act/siting/trans-

siting-present.pdf.

17

transmission facilities.’ Large natural gas pipelines

can be conceived, proposed, sited, constructed, and

begin operation in 2-3 years,'* while those steps can

take 10 years or longer for electric transmission

facilities of comparable size.

The second problem with = state and _ local

transmission siting is that siting large interstate

transmission projects necessarily involves balancing

local impacts against regional benefits, and state and

local officials cannot be expected to adequately weigh

regional or national benefits. The duty of a state or

local official is to a single state or local government,

not to a region or the nation. Prior state siting

decisions reflect an inability or unwillingness by state

and local officials to properly weigh benefits to

neighboring states in siting decisions. !5

'3 Rockies Express Pipeline—West, which crosses five states and

exceeded 700 miles, was sited by FERC in 11 months, and the

MidContinent pipeline, which crossed five states and exceeded

500 miles, was sited by FERC in 9 months. See supra note 11. As

noted above, siting the Jacksons Ferry transmission line, which

crossed two states and was only 90 miles long, took 13 years

\4 Rockies Express Pipeline—West took less than 3 years from

conception to operation Rockies Express Pipeline West,

avatlable at http://www.rexpipeline.com/index_west.htm|

'5 See e.g., Anzona Corp. Comm., /n the Matter of Southern

California Edison Co., Docket No. L-00O000A-06-0295-00130,

Decision No. 69638 (June 6, 2007), available at

http:/Amages.edocket.azcc.gov/docketpdf/00000 73735. pdf

(denying power line certificate in part because primary

beneficiary would be Califorma); Connecticut Siting Council

TransEnergie U.S. Ltd., Docket No. 197, Opinion (March 28

2001), available at

18

Even if there are countervailing regional bencfits,

the narrow focus of state and local review remains

local impacts. In the face of this lopsided balancing,

electric transmission projects may be abandoned or

withdrawn carly in the process, anticipating that

siting approval had become a Sisyphean task. A

prominent characteristic of state and _ local

transmission siting is its sheer unpredictability with

respect to length of state and local siting review, the

likelihood of success, and the influence of political

considerations on state and local siting decisions.

That stands in sharp contrast with the predictability

of the FERC natural gas pipeline siting process.

Congress recognized the problems associated with

state and local siting of interstate transmission

facilities, which is why the law was changed in 2005.

The federal role established in the Energy Policy Act of

2005 was manifestly preemptive, but not exclusive.

Even the Fourth Circuit recognized the federal siting

provisions of the Energy Policy Act of 2005 were

preemptive. Piedmont, 558 F.3d at 313. The only

debate is regarding the scope of federal preemption

intended by Congress.

http://www.ct.gov/csc/cwp/view asp?a=958&Q=247616 (denying

power line certificate in part because primary beneficiary would

be New York)

19

Il. CONGRESS INTENDED TO GRANT FERC

SITING AUTHORITY WHERE STATES HAVE

DENIED PROJECT APPROVAL.

A. National Energy Policy Identified State

Rejection of Siting Approval as a

National Problem and Proposed Federal

Preemption.

It is not a simple matter to mark the beginning of a

legislative process that resulted in enactment of new

law. However, the legislative history of the federal

transmission siting provisions of the Energy Policy Act

of 2005 can be traced back to May 2001. It was on

May 16, 2001 that the Bush Administration issued the

National Energy Policy proposal in part to modernize

our energy infrastructure. Nat'l Energy Policy Dev.

Group, National Energy Policy at xi (May 16, 2001).

The National Energy Policy proposed a series of

electricity legislative reforms that resulted in the

electricity provisions in the Energy Policy Act of 2005.

Id. at 5-21, 7-17.

One of the most important policy proposals in the

National Energy Policy was the recommendation that

the President direct the Secretary of Energy to

“develop legislation to grant authority to obtain rights-

of-way for electricity transmission lines, with the goal

of creating a reliable national transmission grid.

Similar authority already exists for natural gas

pipelines in recognition of their role in interstate

commerce.” /d. at 7-17. This recommendation began

the first serious legislative effort to change the siting

process for clectric transmission since the 1930s, and

20

led to enactment of the federal siting provisions of the

Energy Policy Act of 2005.

The National Energy Policy also identified state

and local transmission siting as a causal factor in the

development of constraints in the power grid. Id. at 7-

7. Importantly, the National Energy Policy specifically

identified state rejections of transmission projects as a

causal factor in transmission constraints, specifically

citing state rejection of a proposed line between

Connecticut and Long Island!6 and identifying state

rejections of proposed transmission projects as a

problem to be remedied by federal legislation.!7

The express reference to the natural gas pipeline

statutory model in the National Energy Policy, the

discussion of state rejections of siting approvals as a

causal factor in grid constraints, and the proposal for

federal legislation to establish effective federal siting

authority modeled on the preemptive natural gas

siting model, all demonstrate that preempting state

rejections of siting approvals was an objective of

federal transmission siting legislation from the very

loo

16 National Energy Policy at 7-7 (“State decisions on where to

locate transmission lines often do not recognize the importance of

proposed transmission facilities to the interstate grid. For

example, a recent decision by regulators in Connecticut to block a

proposed transmission line to Long Island did not recognize the

need for electricity on Long Island.”) (emphasis added).

17 Id. (‘Some state siting laws require that the benefits of a

proposed transmission facility accrue to the individual state,

resulting 1n the rejection of transmission proposals that benefit an

entire region, rather than a single state.’) (emphasis added).

21

beginning of the legislative process that led to

enactment of the Energy Policy Act of 20085.

B. Legislative History Manifests

Congressional Intent to Grant FERC

Authority to Site Transmission When

tates Have Denied Approvai.

Altogether, Congressional consideration of

legislation based on the National Energy Policy

proposal that resulted in the Energy Policy Act of 2005

took about four years and spanned three Congresses.

Congressional intent with respect to the grant of

federal transmission siting authority is made plain

through a review of the relevant legislative history.

Federal transmission siting legislation took two forms

during this period. From December 2001 until June

2004, the relevant legislative provisions authorized

FERC to site transmission when a state has “withheld

approval” or has “delayed final approval for more than

1 year after the filing of an application seeking

approval.”18 From June 2004 through enactment of

the Energy Policy Act of 2005, the legislation used the

final form that is in section 216 as enacted, namely

authorizing FERC siting where a state “withheld

approval for more than 1 year after the filing of an

apphication.”19 Unfortunately, the Fourth Circuit

8 H.R. 3406, 107' Cong. § 402 (2001); H.R. 6, 108 Cong. § 16012

(2003): H.R. 1644, 108th Cong. § 7012 (2003).

" H.R. 4503, 108% Cong. § 1221(a) (2004): S. 2095, 108% Cong. §

122. 1(a) (2004): H.R. 6, 109 Cong. § 1221(a) (2005).

22

ignored the first part of the legislative history of the

federal transmission siting provisions of the Energy

Policy Act of 2005, and based its conclusions regarding

Congressional intent on an incomplete legislative

history.

In the wake of the National Energy Policy, the

Bush Administration sent its legislative

recommendations for’ electricity legislation to

Congress, including a recommendation for federal

transmission siting authority both where a state

“withholds approval, conditions approval to make a

project economically infeasible, or delays approval.”2?

Legislation was introduced shortly thereafter that

closely mirrored that Bush Administration

recommendation.?! That bill was the first legislative

step in the process that led to the Energy Policy Act of

2005. Significantly, that bill included federal

transmission siting provisions that authorized FERC

to site transmission where a state “has withheld

approval, conditioned its approval in such a manner

that the proposed construction or modification is not

economically feasible, or delayed final approval for

more than one year after the filing of an application

seeking approval.” 22

20 Letter from the Honorable Dan Brouillette, Assistant Sec’y of

Energy for Congressional and Intergovernmental Affairs, U.S.

Dep't of Energy, to The Honorable Jeff Bingaman, Chairman, S.

Comm. on Energy and Natural Resources 2 (Oct. 9, 2001).

21 Electric Supply and Transmission Act, H.R. 3406, 107» Cong. §

402 (2001).

22 Id. § 402 (emphasis added).

23

It is important to note that this initial bill

distinguished between “withholding approval” and

“delaying final approval,” which is at the heart of the

dispute in Piedmont. There are three important

conclusions that must be drawn by comparing this

legislation to section 216. First, in this context,

“aithholding approval” must mean somcthing

different than “delaying final approval,” or the bill

would not have provided separate authorizations.

Second, “withholding approval’ in this context must

mean denial of approval, rather than “delaying final

approval,” otherwise authorizing federal siting where

states “delayed final approval’ would be superfluous.

Third, the authorization for FERC to site transmission

where a state has “withheld approval” was not limited

to a one-year period. That time limitation applied only

to “delaying final approval.”

Congress held hearings on this bill, and clearly

understood the meaning of these terms.?3 Specifically,

the scope of federal preemption under the original

version of the legislation, and whether the legislation

authorized FERC to site transmission in the face of

state denials, was discussed at the Congressional

23 Electric Supply and Transmission Act of 2001, Hearings Before

the H. Comm. on Energy and Committee, Sub. on Energy and Air

Quality, 107th Cong. 4-5, 8, 18, 32, 39, 43, 56-7, 78-80, 115-16,

122-23, 124, 133 (statements of Reps. Boucher, Shimkus, Sawyer,

Wilson, Bryant, Barton) (2001).

24

hearings.?4 Statements made by subcommittee

members indicate they understood the “withheld

approval” language would authorize FERC to site

transmission even where states had _ rejected

transmission projects.25 One subcommittee member

stated the siting language would allow FERC to review

“every” siting decision made by states, including

rejyections.26 The following exchange between another

subcommittee member and the Deputy Secretary of

Energy about interpretation of the legislative language

is revealing:

MR. ALLEN: [A]s I read the transmission

provisions, it seems to say that States that say

no to a transmission project that the Secretary

of Energy considers vital to solve interstate

[transmission] congestion areas, will lose their

right to say no in the future. ...

MR. McSLARROW: ... I believe that you are

correct.?2?

24 Comprehensive National Energy Policy, Hearings Before the H.

Comm. on Energy and Committee, Sub. on Energy and Air

Quality, 108th Cong. 13, 59, 67-8, 297, 303 (statements of Reps.

Brown, Allen, Boucher, Dingell) (2003).

25 Td.

26 Id. at 13 (statement of Rep. Brown).

27 Id. at 67-8 (statements of Rep. Allen and Dep. Secretary

McSlarrow).

25

This remained the form of federal transmission

siting legislation for more than two and a half years.28

The legislative history of bills with the initial

formulation of federal transmission siting language

makes plain that Congress intended to authorize

FERC to site transmission where states have denied

approval. H.R. Rep. No. 108-65, Part I, at 170, 342

(2003). Legislation that included these _ siting

provisions passed the U.S. House of Representative on

April 11, 20038.

The form of the siting provisions changed in June

2004, with introduction of H.R. 4503, the “Energy

Policy Act of 2004.” Energy Policy Act of 2004, 108th

Cong. § 1221(a) (2004). This bill was the first measure

that used the transmission siting language reflected in

section 216, namely “withheld approval for more than

1 year.” The legislative history of this bill is sparse,

lacking a committee report and relevant House floor

debate.

But the intent of the new language becomes clear

by comparing it to the earlier version and tracking the

changes. In the earlher bill, “withheld approval”

unambiguously did not mean “delay approval,” since

that bill contained a separate authorization for FERC

to site transmission where states “delayed final

approval.” Given that separate authorization,

“withheld approval” meant “denial.” Previously, the

time limitation of “more than 1 year” applied only to

28 H.R. 3406, 107% Cong. § 402 (2001); H.R. 6, 108 Cong. § 16012

(2003); H.R. 1644, 108» Cong. § 7012 (2003).

26

“delaying final approval,” not on “withholding

approval.” The revised language dropped the

reference to “delaying final approval” altogether, and

moved the time limitation to the “withheld approval”

term for the first time.

The most reasonable interpretation is that when

Congress struck “delayed final approval” from the new

formulation and attached the time limitation to

“withheld approval” beginning in June 2004, it did not

intend to limit federal siting to circumstances where

states had failed to act. For two and a half years,

“withheld approval” had never meant “delayed final

approval” and had consistently meant FERC would be

authorized to site transmission where states have

denied approval. There is no basis to believe that

Congress intended that “withheld approval’ in this

new formulation would suddenly serve as a synonym

for “delayed final approval.” If that is what Congress

had intended, it would have been a simple matter to

strike “withheld approval” instead of “delayed final

approval” and use the latter term instead. But that is

not what Congress did, and that choice is meaningful.

Congress retained “withheld approval,” deleted

“delayed final approval” and applied the _ time

limitation of the latter to the former. In that light, the

conclusion must be drawn that when Congress began

to use the term “withheld approval for more than 1

year’ Congress intended that “withheld approval”

would continue to include denials, but it also intended

to expand the meaning of the term to include “delaying

final approval,” or else applying the time limitation

would be nonsensical.

27

C. Congress Did Not Intend a Nullity.

If the Fourth Circuit’s decision is left standing,

FERC will have to amend its rule and strip out the

provisions that authorize federal siting where states

have denied siting approval. Doing so would eliminate

most of the preemptive effect in a statute that even the

Fourth Circuit recognized was preemptive. Piedmont,

558 F.3d at 313. That will entirely change the

character of section 216. The end result of the Fourth

Circuit decision is that federal transmission siting will

become a very unlikely event, restoring the law to the

status quo ante that governed before enactment of the

Energy Policy Act of 2005, a status quo that Congress

found unacceptable and had resolved to change. When

engaged in statutory construction “Congress will not

be presumed to have done a useless, ineffective, or

absurd thing.” Consumers Union of the United States

v. Sawhill, 512 F.2d 1112, 1126 (Em. App. 1975).

Incorrect construction of section 216 by the Fourth

Circuit has great national importance. Whatever

improvement was made in federal transmission siting

by Congress with enactment of the Energy Policy Act

of 2005 would be lost under the Piedmont decision. By

interpreting “withheld approval” to mean FERC can

only site transmission when states withhold approval

by delaying action, rather than by denying approval,

the Fourth Circuit has rendered section 216 useless.

28

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

Joseph T. Kelliher

Counsel of Record

FPL Group, Inc.

801 Pennsylvania Ave., N.W.

Washington, D.C. 20004

202-347-7082

Attorney for Amict Curtae

October 21, 2009