Regulations for Filing Applications for Permits to Site Interstate Electric Transmission Facilities, 69440-69476 [E6-20001]

Agencies

• DEPARTMENT OF ENERGY
• Federal Energy Regulatory Commission

[Federal Register Volume 71, Number 231 (Friday, December 1, 2006)]
[Rules and Regulations]
[Pages 69440-69476]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20001]


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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Parts 50 and 380

[Docket No. RM06-12-000; Order No. 689]


Regulations for Filing Applications for Permits to Site 
Interstate Electric Transmission Facilities

Issued November 16, 2006.
AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Final rule

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SUMMARY: The Federal Energy Regulatory Commission (Commission) is 
implementing new regulations in accordance with section 1221 of the 
Energy Policy Act of 2005 to establish filing requirements and 
procedures for entities seeking to construct electric transmission 
facilities. The regulations will coordinate the processing of Federal 
authorizations and environmental review of electric transmission 
facilities in national interest transmission corridors.

DATES: Effective Date: This rule will become effective February 2, 
2007.

FOR FURTHER INFORMATION CONTACT:
John Schnagl, Office of Energy Projects, Federal Energy Regulatory 
Commission, 888 First Street, NE., Washington, DC 20426. (202) 502-
8756. john.schnagl@ferc.gov.
Carolyn Van Der Jagt, Office of the General Counsel, Federal Energy 
Regulatory Commission, 888 First Street, NE., Washington, DC 20426. 
(202) 502-8620. carolyn.VanDerJagt@ferc.gov.

SUPPLEMENTARY INFORMATION:

 
                            TABLE OF CONTENTS
 
                                                              Paragraph
                                                               numbers
 
I. Background..............................................            2
II. Discussion.............................................           11
    A. National Interest Transmission Corridors............           11
    B. Permit Findings.....................................           14
        1. Commission Jurisdiction under 216(b)(1).........           14
            a. One Year Clock/Pre-filing...................           16
            b. Withholding/Conditioning Approval...........           24
            c. Other Jurisdictional Issues.................           35
        2. Other Findings under 216(b)(2) through (6)......           37
    C. Project Participation...............................           45
        1. Landowners......................................           50
        2. Stakeholders and Notification...................           60
        3. Document Availability...........................           73
        4. Participation Process...........................           74
    D. Pre-filing..........................................           90
        1. Initial Consultation Issues.....................           92
        2. Third-party Contractors.........................          100
        3. Subsequent Filing Requirements..................          103
        4. Lead Agency Issues/Coordinating Federal Permits.          105
        5. Timeframe for Pre-filing........................          112
        6. Review of Director's Decisions in Pre-filing....          116
    E. Application Requirements............................          118
    F. Filing Requirements.................................          120
        1. State Record....................................          122
        2. Exhibits........................................          126
            a. Exhibit E--Maps.............................          129
            b. Exhibit F--Environmental Requirements.......          130

[[Page 69441]]

 
                i. Section 380.5-Actions that Require EAs..          134
                ii. Section 380.6 Actions that Require EISs          135
                iii. Section 380.10--Participation in                137
                 Commission Proceeding.....................
                iv. Resource Report 1--General Requirements          138
                v. Resource Report 2--Water Use and Quality          142
                vi. Resource Report 3-Fish, Wildlife, and            144
                 Vegetation................................
                vii. Resource Report 4--Cultural Resources.          146
                viii. Resource Report 5--Socioeconomics....          150
                ix. Resource Report 6--Geological Resources          159
                x. Resource Report 7--Soils................          160
                xi. Resource Report 8--Land Use,                     162
                 Recreation, and Aesthetics................
                xii. Resource Report 9--Alternatives.......          175
                xiii. Resource Report 10--Reliability and            180
                 Safety....................................
                xiv. Resource Report 11--Design and                  182
                 Engineering...............................
            c. Exhibit G--Engineering Data.................          185
            d. Exhibit H--System Analysis Data.............          188
            e. Exhibit I--Project Cost and Financing.......          192
    G. Critical Energy Infrastructure Information..........          194
    H. Accepting/Rejecting Applications....................          198
    I. Hearings............................................          199
    J. Permit Conditions...................................          204
    K. State and Local Permits.............................          213
    L. Subsequent Modifications to Facilities..............          219
    M. Definitions.........................................          221
    N. Eminent Domain Issues...............................          225
    O. Filing Fees/Funding.................................          228
    P. Technical Conferences...............................          229
III. Information Collection Statement......................          231
IV. Environmental Analysis.................................          236
V. Regulatory Flexibility Act..............................          237
VI. Document Availability..................................          238
VII. Effective Date and Congressional Notification.........          241
 

Before Commissioners: Joseph T. Kelliher, Chairman; Suedeen G. Kelly, 
Marc Spitzer, Philip D. Moeller, and Jon Wellinghoff.

    1. On June 16, 2006, the Federal Energy Regulatory Commission 
(Commission) issued a Notice of Proposed Rulemaking (NOPR) in this 
proceeding.\1\ In the NOPR, the Commission proposed regulations in 
accordance with section 1221 of the Energy Policy Act of 2005 (EPAct 
2005) \2\ to implement filing requirements and procedures for entities 
seeking permits to construct or modify electric transmission facilities 
under the circumstances set forth in that section. This Final Rule 
considers comments submitted in response to the NOPR, and as a result, 
makes various modifications to the regulatory text described in the 
NOPR. Following the issuance of this rule, we will convene regional 
conferences to assist stakeholders in its implementation.
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    \1\ 71 FR 36258 (June 26, 2006); FERC Stats. & Regs. ] 32,605 
(2006).
    \2\ Pub. L. 109-58, 119 Stat. 594 (2005).
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I. Background

    2. On August 8, 2005, EPAct 2005 became law. Section 1221 of EPAct 
2005 adds a new section 216 to the Federal Power Act (FPA), providing 
for Federal siting of electric transmission facilities under certain 
circumstances.
    3. New FPA section 216 requires that the Secretary of the 
Department of Energy (DOE or Secretary) identify transmission 
constraints. It mandates that the Secretary conduct a study of electric 
transmission congestion within one year of enactment and every three 
years thereafter, and that the Secretary then issue a report. The 
Secretary is further empowered to designate certain constrained areas 
as national interest electric transmission corridors (National 
Corridors).
    4. FPA section 216(b) provides that the Commission may issue 
permits to construct or modify electric transmission facilities in a 
National Corridor under certain circumstances. The Commission has the 
authority to issue permits to construct or modify electric transmission 
facilities if it finds that: (1) A State in which such facilities are 
located does not have the authority to approve the siting of the 
facilities or to consider the interstate benefits expected to be 
achieved by the construction or modification of the facilities; (2) the 
applicant is a transmitting utility but does not qualify to apply for 
siting approval in the State because the applicant does not serve end-
use customers in the State; or (3) the State commission or entity with 
siting authority withholds approval of the facilities for more than one 
year after an application is filed or one year after the designation of 
the relevant national interest electric transmission corridor, 
whichever is later, or the State conditions the construction or 
modification of the facilities in such a manner that the proposal will 
not significantly reduce transmission congestion in interstate commerce 
or is not economically feasible.\3\
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    \3\ Under FPA section 216(i)(4), the Commission may not issue a 
permit for facilities within a State that is a party to an 
interstate compact establishing a regional transmission siting 
agency unless the members of the compact are in disagreement and the 
Secretary of the Department of Energy makes certain findings.
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    5. Additionally, under FPA sections 216 (b)(2) through (6), before 
issuing a permit the Commission must find that the proposed facility: 
(1) Will be used for the transmission of electric energy in interstate 
commerce; (2) is consistent with the public interest; (3) will 
significantly reduce transmission congestion in interstate commerce and 
protect or benefit consumers; (4) is consistent with sound national 
energy policy and will enhance energy

[[Page 69442]]

independence; and (5) will maximize, to the extent reasonable and 
economical, the transmission capabilities of existing towers or 
structures.
    6. New FPA section 216(h)(2) designates DOE as lead agency to 
coordinate all Federal authorizations needed to construct proposed 
electric transmission facilities in National Corridors. Under FPA 
section 216(h)(4)(A), to ensure timely efficient reviews and permit 
decisions, DOE is required to establish prompt and binding intermediate 
milestones and ultimate deadlines for all Federal reviews and 
authorizations required for a proposed electric transmission 
facility.\4\ Section 216(h)(5)(A) of the FPA requires that DOE as lead 
agency, in consultation with the other affected agencies, prepare a 
single environmental review document that would be used as the basis 
for all decisions for the proposed projects under Federal law.
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    \4\ Under FPA section 216(h)(6)(A), if any agency has denied a 
Federal authorization required for a transmission facility, or has 
failed to act by the deadline established by the Secretary, the 
applicant or any State in which the facility would be located may 
file an appeal with the President.
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    7. On May 16, 2006, the Secretary delegated paragraphs (2), (3), 
(4)(A)-(B), and (5) of FPA section 216(h) to the Commission as they 
apply to proposed facilities in designated National Corridors for which 
an application for authority to construct has been submitted to the 
Commission.\5\ Specifically, the Secretary delegated to the Commission 
DOE's lead agency responsibilities for the purpose of coordinating all 
applicable Federal authorizations and related environmental review and 
preparing a single environmental review document for facilities falling 
within the Commission's siting jurisdiction. With respect to such 
projects, the Commission will establish prompt and binding intermediate 
milestones and ultimate deadlines for the review, and ensure that all 
Federal permits are issued, and reviews are completed, within a year or 
as soon as practicable thereafter.
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    \5\ Department of Energy Delegation Order No. 00-004.00A.
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    8. On August 8, 2006, DOE issued its National Electric Transmission 
Congestion Study that examined transmission congestion and constraints 
and identified affected transmission paths in many areas of the 
nation.\6\ DOE states that it expects the study to open a dialogue with 
stakeholders in areas of the Nation where congestion is a matter of 
concern, focusing on ways in which these problems might be alleviated. 
DOE states that where appropriate in relation to the congestion areas, 
it may designate National Corridors.
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    \6\ Department of Energy, National Electric Transmission 
Congestion Study, Executive Summary (2006), https://
www.oe.energy.gov/energy_policy/epa_sec1221.htm#Timeline (follow 
``Congestion Study Executive Summary'' hyperlink).
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    9. Also on August 8, 2006, several Federal agencies including DOE 
and the Commission entered into a Memorandum of Understanding on Early 
Coordination of Federal Authorization and Related Environmental Reviews 
Required in Order to Site Electric Transmission Facilities (MOU).\7\ 
The purpose of the MOU is to establish a framework for early 
cooperation and participation that will enhance coordination of all 
applicable land use authorizations, related environmental, cultural, 
and historic preservation reviews, and any other approvals that may be 
required under Federal law in order to site an electric transmission 
facility.
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    \7\ The other agencies include the Department of Defense, the 
Department of Agriculture, the Department of the Interior, the 
Department of commerce, the Environmental Protection Agency, the 
Council on Environmental Quality, and the Advisory Council on 
Historic Preservation.
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    10. FPA section 216(c)(2) requires that the Commission issue rules 
specifying the form of, and the information to be contained in, an 
application for proposed construction or modification of electric 
transmission facilities in National Corridors, and the manner of 
service of notice of the permit application on interested persons. The 
Commission is implementing those regulations in a new part 50 of 
existing subchapter B of its regulations.

II. Discussion

A. National Interest Transmission Corridors

    11. As stated, on August 8, 2006, DOE issued its National Electric 
Transmission Congestion Study and stated that where appropriate in 
relation to the congestion areas, it may designate National Corridors. 
Once DOE designates a National Corridor, the Commission has the 
authority under FPA section 216(b) to issue permits to construct or 
modify electric transmission facilities in such a corridor under 
certain circumstances.
    12. The Western Interstate Energy Board and Committee on Regional 
Electric Power Cooperation (Western Energy Board) and Western 
Governor's Association (Western Governors) request that the Commission 
delay issuing the Final Rule until DOE acts on establishing National 
Corridors. Section 216(c)(2) of the FPA requires that the Commission 
issue rules specifying the form of the application, the information to 
be contained in the application, and the manner of service and notice 
of the permit application on interested persons. While the Commission 
has no authority to issue a permit unless a facility is in a National 
Corridor, this does not affect the Commission's ability to put in place 
the filing requirements that will apply once National Corridors are 
designated. The Commission, therefore, declines to delay issuance of 
the Final Rule. The Commission believes that prompt issuance of the 
Final Rule, coupled with regional conferences to discuss its 
implementation, is in the public interest and provides timely notice to 
stakeholders of the procedures that will apply to applications 
submitted under FPA section 216.
    13. American Electric Power Service Corporation (AEP) requests that 
the Commission define what constitutes a National Corridor and whether 
the designation is a permanent one. Massachusetts Energy and Facilities 
Siting Board (Massachusetts Energy Board) requests that the Commission 
define the ends, geographic dimensions, and specified boundaries for a 
National Corridor. U.S. Department of the Interior (DOI) also requests 
clarification on what constitutes a National Corridor. The Commission 
declines to make such rulings. DOE, not the Commission, is responsible 
for designating and defining the National Corridors under EPAct 2005. 
Thus, it would be inappropriate for the Commission to establish an 
independent definition in the Final Rule or opine on whether a corridor 
designation is a permanent one.

B. Permit Findings

1. Commission Jurisdiction Under 216(b)(1)
    14. Under FPA section 216(b)(1), the Commission has the authority 
to issue permits to construct or modify electric transmission 
facilities if: (A) A State in which the transmission facilities are to 
be constructed or modified does not have the authority to--(i) approve 
the siting of the facilities; or (ii) consider the interstate benefits 
expected to be achieved by the proposed construction or modification of 
transmission facilities in the State; (B) the applicant for a permit is 
a transmitting utility under this Act but does not qualify to apply for 
a permit or siting approval for the proposed project in a State because 
the applicant does not serve end-use customers in the State; or (C) a 
State commission or other entity that has

[[Page 69443]]

authority to approve the siting of the facilities has--(i) withheld 
approval for more than 1 year after the filing of an application or 1 
year after the designation of the relevant national interest electric 
transmission corridor, whichever is later; or (ii) 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.
    15. Numerous commenters request that the Commission specifically 
address what it will require of applicants to establish the basis and 
supporting rationale for the Commission's claiming jurisdiction over 
proposed electric transmission facilities.\8\ Specifically, they 
request that the Commission clarify how it intends to determine when 
the clock starts and stops for the one-year time period for State 
action on siting requests under FPA section 216(b)(1)(C). They also 
request that the Commission clarify under what circumstances it will 
determine that a State has withheld approval and what conditions in a 
State authorization the Commission will consider sufficient to trigger 
Commission jurisdiction. The commenters also request that the 
Commission generally explain how, and when, it will make the 
determination that it indeed has jurisdiction over a proposed project.
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    \8\ American Public Power Association (APPA), American 
Transmission Co. (American Transmission), California Resources 
Agency (CA Resources), Edison Electric Institute (EEI), Kentucky 
Public Service Commission (Kentucky PSC), New York Department of 
Public Service (DPS), New York State Senator Wright (Senator 
Wright), Southern Company Services (Southern Company), Southern 
California Edison Co. (SoCal Edison), Washington Energy Facility 
Site Evaluation Council (Washington Council), Western Energy Board, 
Western Governors, and the Wilderness Society (Wilderness).
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a. One Year Clock/Pre-Filing
    16. Many commenters request that the Commission specifically 
address when the one-year period for State processing of an application 
will commence. They state that the Commission should specify that the 
one-year clock will not start running until the State determines that 
the application submitted to it is final and in compliance with the 
State's filing requirements.\9\ Several commenters contend that the 
States should have the ability to re-start the one-year review period 
if the applicant significantly modifies or makes substantive changes to 
its application.\10\ The Wilderness Society (Wilderness) states that 
the Commission should require that the applicant prove that it made a 
good faith effort to comply with State siting and permitting 
requirements. The Western Energy Board requests that the Commission 
clarify that an applicant who has not obtained the required Federal 
permit findings in support of a State application has not filed a 
complete State application. Iowa Board states that one-year time period 
should not include periods of appellate review.
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    \9\ Allegheny Power (Allegheny), California Public Utilities 
Commission (California PUC), Iowa Utilities Board (Iowa Board), 
Massachusetts Energy Board, National Association of Regulatory 
Utility Commissioners (NARUC), Pennsylvania Public Utilities 
Commission (Pennsylvania PUC), Pepco Holdings, Potomac Electric 
Power Co., Delmarva Power & Light Co., and Atlantic City Electric 
Co. (PHI Companies), San Diego Gas & Electric (SDG&E), Western 
Energy Board, Public Service Commission of Wisconsin (Wisconsin 
PSC), and Washington Council.
    \10\ Iowa Board, NARUC, and Wisconsin PSC.
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    17. Several commenters also request that the Commission require an 
applicant demonstrate how its proposed application has met the 
statutory requirements for Commission jurisdiction prior to initiating 
the pre-filing process.\11\ Others request that the Commission begin 
the pre-filing process while the State process is ongoing.\12\
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    \11\ CA Resources, Communities, Iowa Board, NARUC, New York PSC, 
Senator Wright, SoCal Edison, Washington Council, and Western Energy 
Board.
    \12\ APPA, AEP, Allegheny, Southern Companies, National Grid USA 
(National Grid), SDG&E, National Rural Electric Cooperative 
Association (NRECA), and Virginia Electric and Power Co. (Virginia 
Electric).
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    18. Communities Against Regional Interconnect (Communities) contend 
that permitting the pre-filing process to be initiated simultaneous 
with the ongoing State process represents nothing more than the 
Commission's desire to ``pounce'' at the moment its jurisdiction is 
triggered. Communities, CA Resources, and New York DPS are concerned 
that simultaneous filings could result in an unwarranted and massive 
expenditure of time and resources, if it turns out the Commission lacks 
jurisdiction to consider the application. Iowa Board contends that 
simultaneous filing deprives States of their authority and conflicts 
with the purpose of the law. Senator Wright and NARUC note that 
allowing the pre-filing process to begin at such an early stage 
prevents the Commission from fully considering the information brought 
forth during the State siting process.
    19. The Commission appreciates the concerns of the States regarding 
the potential for overlap in State and Commission siting processes. 
However, the language of FPA section 216 provides for this potential 
overlap by allowing the Commission to issue a construction permit one 
year after the State siting process has begun and requiring an 
expeditious pre-application mechanism for all permit decisions under 
Federal law. Thus, the Commission pre-filing process can occur at the 
same time as parallel State proceedings.\13\ To ensure that needed 
infrastructure is built, Congress therefore adopted a statutory scheme 
that permits parallel proceedings.
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    \13\ The Commission's pre-filing process is discussed in section 
II.D. of this Final Rule.
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    20. While we believe the statute clearly permits parallel 
Commission-State processes, after taking into account the comments of 
State agencies and other stakeholders, we do not adopt the approach 
proposed in the NOPR. Rather, we adopt an approach that is more fully 
respectful of State jurisdiction.
    21. Although some overlap in State and Federal proceedings is 
inevitable, as was contemplated by FPA section 216, we believe that 
States which have authority to approve the siting of facilities should 
have one full year to consider a siting application without there being 
any overlapping Commission process. Therefore, we find that, in cases 
where our jurisdiction rests on FPA section 216(b)(1)(C),\14\ the pre-
filing process should not commence until one year after the relevant 
State applications have been filed. This will give the States one full 
year to process an application without any intervening Federal 
proceedings, including both the pre-filing and application processes. 
Once that year is complete, an applicant may seek to commence our pre-
filing process. Thereafter, once the pre-filing process is complete, 
the applicant may submit its application for a construction permit. We 
believe this approach most adequately addresses State concerns. If we 
determine in the future, however, that the lack of a Commission pre-
filing process prior to the end of the one year is delaying projects or 
otherwise not in the public interest, we will reconsider this issue.
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    \14\ In all other instances (i.e., where the state does not have 
jurisdiction to act or otherwise to consider interstate benefits, or 
the applicant does not qualify to apply for a permit with the State 
because it does not serve end use customers in the State), the pre-
filing process may be commenced at any time.
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    22. The States also express concern that the one-year time period 
can be abused. For example, an applicant might not provide complete 
information to the States in the hopes of frustrating their ability to 
act within one year and, hence, invoking the Commission's jurisdiction. 
The Commission believes such instances should be rare. We also

[[Page 69444]]

wish to make clear that we will not countenance such behavior. The 
Commission expects all potential applicants under FPA section 216 to 
act in good faith as it relates to State jurisdiction. Although the 
Commission may exercise jurisdiction in all instances where a State has 
withheld approval for more than one year, the Commission, in 
determining whether to do so, will weigh heavily clear evidence that an 
applicant has abused the State process.
    23. Under the approach adopted herein, once the one-year time 
period has elapsed the applicant may commence pre-filing. At the pre-
filing consultation required under Sec.  50.5(b) of the Commission's 
regulations, the applicant will need to tell Commission staff the date 
that it filed its application and the status of that application. As 
part of the pre-filing consultation, the Director of the Office of 
Energy Projects (OEP) will review the applicant's progress at the State 
proceeding. After the initial consultation process, if the Director of 
OEP determines that there is sufficient reason to commence pre-filing, 
a notice will be issued under Sec.  50.5(d) of the regulations. To the 
extent the State proceeding is still ongoing, the Commission will host 
a scoping meeting or technical conference to work with the applicant 
and the State agencies to discuss the need to coordinate, among other 
things, simultaneous environmental reviews. We believe that such 
coordination is appropriate because, in some instances, the State may 
be able to complete its action while our pre-filing process is ongoing, 
possibly allowing us to terminate any proceedings under FPA section 
216.
b. Withholding/Conditioning Approval
    24. Numerous commenters request that the Commission define the 
criteria it would use to determine that a State has withheld approval 
or conditioned its approval so as to render a project not economically 
feasible, triggering Commission jurisdiction.\15\ The Western Energy 
Board and California PUC maintain that a State should not be deemed to 
have withheld or unreasonably conditioned approval if it fails to act 
within one year because a project has not received Federal agency 
approvals or because of delays related to ``another provision of 
Federal law.'' California PUC points out that FPA Sec.  216(h)(4)(B) 
allows the Commission to extend its process beyond a year for those 
reasons.
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    \15\ Department of Interior, Iowa Utility Board, Massachusetts 
Energy Board, National Parks, National Regulatory Commissioners, 
Pennsylvania PUC, PJM, Washington Council, Wisconsin PSC, Western 
Energy Board.
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    25. The Iowa Board and Senator Wright state that the Commission 
should clarify that a State's timely and lawful denial of a 
transmission project should not give rise to Commission jurisdiction. 
The Iowa Board also contends that any other conclusion would allow an 
applicant to sidestep an adverse State ruling by subsequently 
requesting Federal jurisdiction. The Wisconsin PSC asks that the 
Commission clarify that State denial for failure to meet proper State 
requirements does not trigger the withheld approval provision. It 
claims that this would be a situation where a State agency acted 
properly and is not guilty of regulatory failure. Communities state 
that the Commission should not have jurisdiction where the State denies 
siting approval for valid reasons under State law, such as the 
protection of environmental resources, the health and safety of its 
citizens, or if better alternatives are identified through the process.
    26. FPA section 216(b)(1)(C) provides jurisdiction to the 
Commission whenever a State has ``withheld approval'' for more than one 
year. The statute does not explicitly define the full range of State 
actions that are deemed to be withholding approval. Nonetheless, to 
promote regulatory certainty, we believe it is our responsibility to 
interpret the statutory language in this proceeding and to give all 
parties notice of such interpretation. To this end, we believe that a 
reasonable interpretation of the language in the context of the 
legislation supports a finding that withholding approval includes 
denial of an application.
    27. Support for this interpretation is found in comparing the 
language added by EPAct 2005 as new FPA section 216(b)(1)(C)(i) to that 
of new FPA section 203(a)(5), also added by EPAct 2005. There, in 
requiring that the Commission grant or deny applications for approval 
of certain merger transactions within 180 days after the application is 
filed, the statute specifies the consequences ``[i]f the Commission 
does not act.'' The Commission has an obligation to construe a statute 
in such a manner as to give every word some operative effect.\16\ 
Interpreting the phrase ``withhold approval'' to mean ``does not act'' 
fails to recognize Congress' use of different words to express its 
intent.
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    \16\ Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 
157, 167 (2004).
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    28. Further support for this interpretation can be found in the 
fact that in addition to giving the Commission jurisdiction to site 
transmission facilities whenever a State has ``withheld approval'' for 
more than a year, FPA section 216(b)(1)(C) also gives the Commission 
jurisdiction to act in instances where a State has approved 
construction, but ``conditioned its approval'' in such a manner that 
the proposed construction or modification is not economically feasible. 
Since Congress has provided the Commission with the authority to 
intervene in circumstances where a State has issued an authorization 
which will essentially prevent a project from going forward, it would 
not be reasonable to interpret the statute in such a manner that would 
leave the Commission without authority to intervene in instances where 
a State has expressly denied an application.
    29. Moreover, legislative history lends support to this 
interpretation of the statute. Congress devoted substantial time to 
consideration of energy legislation in the years immediately prior to 
the enactment of EPAct 2005. It is noteworthy that transmission siting 
language first appeared in legislation considered in the House of 
Representatives in 2003. That measure (H.R. 6) allowed the Commission 
to exercise jurisdiction where a State entity with transmission siting 
authority ``has withheld approval, conditioned its approval in such a 
manner that the proposed construction or modification will not 
significantly reduce transmission congestion in interstate commerce and 
is otherwise not economically feasible, or delayed final approval for 
more than one year after the filing of an application seeking approval 
* * *.'' \17\ In addition, the report language accompanying the above 
legislative text states, ``The section provides that for such lines, 
persons may obtain a permit from FERC and exercise eminent domain if, 
after one year, a State is unable or refuses to site the line.'' \18\ 
The fact that this precursor to the transmission siting provision of 
EPAct 2005 distinguished ``withholding approval'' from ``delaying final 
approval for more than one year'' and was interpreted to include a 
State ``refusing to site a line'' supports the conclusion that 
``withholding approval'' was intended to mean something beyond a 
failure to act.
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    \17\ H.R. 6, 108th Cong. Sec.  16012 (2003).
    \18\ H.R. Rep No. 108-65 (April 6, 2003) (emphasis added).
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    30. Finally, Section 216(b)(1)(C)(i) allows the Commission to 
exercise jurisdiction where a State entity with siting authority has 
``withheld approval for more than 1 year after the filing of

[[Page 69445]]

an application seeking approval pursuant to applicable law * * *.'' If 
an applicant seeks State siting approval pursuant to applicable law, 
and the State does not grant the application within one year, the 
approval is withheld, regardless of whether the State takes a specific 
action denying it. Indeed, the term ``withhold'' in this context means 
to refrain from granting approval, and, conversely, the term ``deny'' 
is synonymous with ``withhold.'' Webster's Third New International 
dictionary defines ``withhold'' as ``* * * to desist or refrain from 
granting, giving, or allowing * * *.'' The same dictionary defines 
``deny'' as `` * * * to refuse to grant: WITHHOLD'' [caps in original]. 
``Denial,'' similarly, is defined as ``refusal to grant * * *: 
rejection of something requested.'' Furthermore, Roget's International 
Thesaurus 4th Ed., Section 776 (``Refusal'') at paragraph 776.4 lists 
``deny, withhold, hold back * * *'' as synonyms. Thus, there is no 
textual or lexical basis for saying that a formal denial does not 
entail refraining to grant or allow (i.e. to withhold). To say that an 
official denial does not count as a withholding is to say that ``to 
deny'' means something other than ``to refrain from granting,'' which 
would not be a reasonable interpretation.
    31. Therefore, the Commission finds that when a State fails to act 
or rejects an application, it has withheld approval and the proposed 
facility would be subject to the Commission's jurisdiction. However, 
the fact that we possess jurisdiction does not mean that it will be 
exercised in all cases. Rather, we retain the discretion, in 
appropriate circumstances, to allow State processes to be completed 
beyond the one-year period provided in the statute. Indeed, under the 
approach described above, the States will, in many cases, have more 
than two years to complete their action, and thereby avoid issuance of 
a construction permit by this Commission, because our pre-filing and 
construction permit processes typically take more than one year to 
complete (which is in addition to the one year provided to State 
authorities).
    32. We also clarify that mere consideration of an application by 
the Commission does not equate to a jurisdictional determination or 
Commission approval of the proposed project. Once an application is 
filed for consideration by the Commission, anyone who questions the 
Commission's jurisdiction over the proposed project, the timing of the 
exercise of that jurisdiction, or the merits of the proposal can raise 
those matters in its intervention or protest. The Commission will make 
a jurisdictional determination and address comments and protests in a 
subsequent order issued on the merits of the proposed project.
    33. Allegheny requests that the Commission address whether the 
following would constitute withholding approval: (1) A State cannot 
make a decision in one year due to State statutes or rules; (2) the 
State has declined to establish a procedural schedule for reaching a 
decision within a year; (3) a State commission, after an elapse of one 
year, has not acted on an application; and (4) approval is conditioned 
in an unacceptable manner, but does not meet the significantly reduce 
transmission congestion or not economically feasible test. Wilderness 
states that the Commission should adopt detailed standards defining 
what constitutes an economically infeasible project or restrictions 
that prevent a proposed project from significantly reducing congestion. 
Communities argue that Commission jurisdiction should not be triggered 
simply because mitigation measures might increase the costs of the 
project. DOI also encourages the Commission to look closely at the 
reason that certain conditions were imposed on a project.
    34. The Commission believes that these issues cannot be resolved 
adequately on a generic basis in this rule. Rather, it is important to 
consider all relevant factors presented on a case-by-case basis. The 
Commission will, therefore, not limit its ability to review an 
application on a case-by-case basis by establishing specific criteria 
that it will consider in determining if its jurisdiction had properly 
been invoked under FPA section 216(b)(1).
c. Other Jurisdictional Issues
    35. PJM Interconnection (PJM) requests that the Commission address 
the Commission's jurisdiction over facilities that span multiple States 
where one State may have approved the facilities and another does not. 
While the Commission's jurisdiction may, in these circumstances, only 
attach to the portion of the facility that would qualify under FPA 
section 216(b)(1), under the National Environmental Policy Act of 1969 
(NEPA), the Commission would have to analyze the impact of the entire 
project. The Commission may, however, adopt State analyses where 
possible. Additionally, to make its determination under FPA sections 
216(b)(2) through (6) the Commission would have to review the operation 
of the facility as a whole.
    36. PHI Companies request that the Commission clarify that where a 
State does not have the authority to grant eminent domain rights for 
transmission facilities, that constitutes the State not having 
authority to approve the siting of facilities, thus giving a project 
sponsor immediate access to the Commission's jurisdiction. While State 
law may not authorize the taking of property by eminent domain, if it 
still has laws that address the siting of electric transmission 
facilities, it appears that the Commission's jurisdiction will not 
attach unless the State fails to act or denies an application as 
required by FPA section 216(b)(1)(C). We will, however, consider such 
issues if, and when, they arise.
2. Other Findings Under 216(b)(2) Through (6)
    37. Under FPA sections 216(b)(2) through (6), the Commission must 
find that the proposed facility: (1) Will be used for the transmission 
of electric energy in interstate commerce; (2) is consistent with the 
public interest; (3) will significantly reduce transmission congestion 
in interstate commerce and protect or benefit consumers; (4) is 
consistent with sound national energy policy and will enhance energy 
independence; and (5) will maximize, to the extent reasonable and 
economical, the transmission capabilities of existing towers or 
structures.
    38. NARUC asserts that the final rule needs to state more clearly 
how the Commission will implement all five of the above criteria. 
Pacific Gas and Electric Company (PG&E) requests that the Commission 
clarify how it intends to measure and analyze sufficient showings 
related to consistency with the public interest and national policy. 
DOI and Laura and John Reinhardt (Reinhardts) request that the 
Commission define the criteria necessary to establish a basis for the 
public interest determination. Massachusetts Energy Board states the 
Commission should define ``consistent with the public interest'' to 
include that there is no superior approach to the identified 
transmission project; there is no superior alternative to the proposed 
route; and all feasible mitigation of environmental impacts and any 
adverse reliability impacts will be undertaken.
    39. Wisconsin PSC states the Commission should examine a variety of 
factors, including cost-effectiveness, safety, engineering, project 
alternatives, individual hardships, reliability, competitive impacts, 
and environmental impact to judge whether a project is in the public 
interest. PJM believes the Commission should specifically look at 
adding a reliability requirement and a market efficiency analysis. 
NARUC

[[Page 69446]]

requests that the Commission consider the impact of the project on host 
States and any possible mitigation, and also require that harmful 
financial impacts of the project are mitigated through an applicable 
cost allocation methodology within the Commission's jurisdiction.
    40. PSEG Companies contend that the Commission should define the 
term public interest to consider the energy and environmental policies 
of the States where the transmitted energy will provide power. It 
states that ``significant'' should be defined as it applies to the 
reduction of congestion and that ``sound national energy policy'' 
should be clarified to consider that national security concerns will be 
taken into consideration. Finally, PSEG Companies state that the 
criteria for approval should be on a cost-benefit basis and an 
applicant should specify whether the project is being built for 
reliability or for economic reasons because that could lead to a 
different evaluation. Wilderness asserts that the Commission's public 
interest determination should consider the benefits of electric 
transmission, the project's environmental impacts, and alternatives 
with less environmental impacts. Progress Energy (Progress) cautions 
the Commission to be mindful that a policy of maximum use of existing 
towers and structures should be conditioned upon maintaining or 
improving the reliability of the transmission system.
    41. While commenters have raised a number of valid public interest 
considerations, the Commission cannot adopt an exclusive list of 
factors or construct a bright-line test to determine whether a project 
meets all the statutory criteria. It is difficult to construct helpful 
bright line standards or tests for this area. Bright line tests are 
unlikely to be flexible enough to resolve specific cases and to allow 
the Commission to take into account the different interests that must 
be considered. In reviewing a proposed project, the Commission will 
consider all relevant factors presented on a case-by-case basis and 
balance the public benefits against the potential adverse consequences. 
The Commission will conduct an independent environmental analysis of 
the project and determine if there is no significant impact as required 
by NEPA. It will look at alternatives, including, as appropriate, 
alternatives other than transmission lines, and consider whether the 
proposed facilities would maximize the use of existing transmission 
facilities. It will review the alternatives for their respective 
impacts on the environment and will determine mitigation measures to 
lessen the adverse impacts. The Commission will review the proposed 
project and determine if it reduces the transmission congestion 
identified in DOE's study and if it will protect or benefit consumers. 
It will investigate and determine the impact the proposed facility will 
have on the existing transmission grid and the reliability of the 
system.
    42. The Commission will also consider the adverse effects the 
proposed facilities will have on landowners and local communities. The 
Commission will evaluate the entire record of the proceeding, and after 
due consideration of the issues raised, determine if the proposed 
project is consistent with Congress' goals and objectives in enacting 
FPA section 216, while avoiding unnecessary disruptions to the 
environment and the unneeded exercise of eminent domain. The 
Commission's review of a proposed project will be a flexible balancing 
process during which it will weigh the factors presented in a 
particular application. It will impose appropriate conditions necessary 
to avoid adverse economic, competitive, environmental or other effects 
on the relevant interests from the construction of a new project, and 
will approve the project only where the public benefits to be achieved 
from the project outweigh the adverse effects.
    43. PG&E states the Commission should rebuttably presume a need for 
a project subject to the independent oversight of an approved 
independent system operator (ISO) or regional transmission organization 
(RTO) without a direct economic interest in the application process. It 
contends that this will maximize efficiency as participants must 
already make showings of local or regional need to gain approval from 
an ISO or RTO. PSEG Companies encourages the Commission to incorporate 
the results of the RTO process into its proceeding. APPA asserts that 
if a project results from an open and collaborative regional planning 
process designed to meet the transmission needs of load-serving 
entities (LSE) within the national interest electric transmission 
corridors, or a consortium with broad LSE ownership/participation then 
there should be a presumption of public interest. Similarly, NRECA 
contends that the Commission cannot reasonably make the FPA section 
216(b)(2) through (6) findings unless the proposed expansion or 
modification arose from a truly open and inclusive joint transmission 
planning process. It requests that the Commission require an applicant 
to complete a joint planning process before beginning the pre-filing 
process.
    44. The Commission agrees that the determinations of an independent 
entity, such as an RTO, should be given due weight in our assessment of 
whether a particular facility is needed to protect or benefit 
customers. We will, therefore, consider any such independent 
determinations as a factor, along with all other relevant factors, in 
determining whether the statutory criteria have been met.

C. Project Participation

    45. Section 216(d) of the FPA requires that the Commission afford 
each State in which the transmission facility covered by the permit 
application is or will be located, each affected Federal agency and 
Indian tribe, private property owners, and other interested persons, a 
reasonable opportunity to present their views and recommendations with 
respect to the need for and impact of a facility covered by the permit 
application. Additionally, under FPA section 216(h)(3) and its 
delegated authority, the Commission needs to coordinate the Federal 
authorization and review process with any Federal agencies, Indian 
tribes, multistate entities, and State agencies that are responsible 
for conducting separate permitting and environmental reviews of the 
facilities.
    46. Under the Commission's review process, any interested entity or 
individual will have multiple opportunities to participate and express 
its views on the proposed project.\19\ Under Sec.  50.4 of the 
Commission's regulations, the applicant is required to develop a 
Project Participation Plan (Participation Plan) to facilitate 
participation from all stakeholders during the Commission's 
proceedings. The Participation Plan will be used to provide accurate 
and timely information, including the environmental impacts, as well as 
the national and local benefits, of the proposed project, to all 
stakeholders. The Commission expects that the applicant will conduct 
various outreach activities to solicit comments on its proposal before 
commencing the Commission's review process.
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    \19\ The Commission considers any interested entity or 
individual to be included in its definition of stakeholder in Sec.  
50.1 of the Commission's regulations.
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    47. In addition to the applicant's outreach activities, Commission 
staff will conduct its pre-filing process. As part of this process, 
Commission staff will start its scoping and environmental review of the 
proposed project as

[[Page 69447]]

required by NEPA. As part of this review, it will seek comments and 
recommendations from interested stakeholders. Commission staff will use 
those comments during its preliminary review of the proposed project to 
formulate the issues raised by the project and to assist the applicant 
in compiling the information necessary for the Commission staff to 
draft the environmental document and for the Commission to address 
those issues during the application process.
    48. Once the application is filed, it will be noticed and 
interested stakeholders will be able to file to intervene and/or file 
protests and/or comments concerning the applicant's proposal. 
Additionally, during the application proceeding, the Commission will 
issue a draft environmental document.\20\ The environmental document 
will also be subject to a comment period where any stakeholder may file 
comments concerning the findings made in that document. Finally, the 
Commission will issue a final environmental document and an order 
addressing the issues raised in the proceeding.
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    \20\ The Commission will issue an environmental assessment under 
Sec.  380.5 or an environmental impact statement under Sec.  380.6 
of the Commission's regulations depending upon the level of NEPA 
review that will be required for the proposed project.
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    49. The Commission received numerous comments on its proposal for 
public participation in its siting process. Many commenters requested 
clarification on how the Commission envisioned its notification 
requirements would be implemented, who would be notified about the 
project, and how an interested stakeholder would be able to access 
information and participate in the Commission's proceedings. Some 
commenters were concerned that the Commission's definition of affected 
landowners was too limited. Others thought it was too broad. Some 
commenters were afraid that their group may be excluded from the 
definition of stakeholder. Others thought a stakeholder's right to 
participate should be restricted.
1. Landowners
    50. Under Sec.  50.1, an affected landowner is an owner of property 
interests, as noted in the most recent tax notice, whose property is: 
(1) Directly affected, crossed or used, by the proposed project; or (2) 
abuts either side of an existing right-of-way or proposed facility site 
or right-of-way, or contains a residence within 50 feet of a proposed 
construction work area. In addition, Sec.  50.4(c) requires that the 
applicant notify any landowner with a residence within a quarter mile 
from the edge of the construction right-of-way.
    51. Communities contend that the definition of affected landowner 
is too limited and must be broadened to provide a fair opportunity for 
intervention and a comprehensive environmental review. It states that 
it should include all landowners directly affected by the proposed 
facility so that all such individuals are allowed to participate fully 
in the proceeding. DOI requests that the definition of affected 
landowners include land management agencies. Similarly, National Parks 
Conservation Association (Parks Association) requests that the 
definition of affected landowner be reworded so that land managing 
agencies with fee simple lands and those lands in which agencies own 
scenic easements, are notified during the appropriate times.\21\ They 
contend that if the Commission does not include Federal agencies as 
``affected landowners,'' it needs to develop a notification criterion 
for Federal agencies that manage public lands. DOI also encourages the 
Commission to add a procedure for notifying stakeholders who would be 
within the viewshed, but not necessarily abutting, the proposal project 
to help notify other Federal governments and agencies involved in the 
project.
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    \21\ Lackawaxen River Conservancy adopts the comment of the 
Parks Association.
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    52. Parks Association requests that the reference to ``directly 
affected'' landowners in Sec.  50.1(a)(1) needs to be defined since an 
electricity corridor might not cross or use parklands, but could still 
``directly'' affect the scenic and historic resources of a park. It 
also states that a specific definition of ``used'' in Sec.  50.1 should 
be added and include landowners whose property is exposed to noise and 
visual impacts. Moreover, Park Associations believes the quarter mile 
distance requirement is inadequate to address the possible adverse 
impacts on lands discussed in the land use, recreation, and aesthetics 
resource report. Massachusetts Energy Board requests that the 
Commission define affected landowner using a distance greater than 50 
feet from overhead transmission lines or use a definition based on a 
distance from the edge of the cleared or permanent right-of-way.\22\
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    \22\ Additionally, Massachusetts Siting Board also states that 
the word ``and'' should be replaced with ``or'' after the phrase 
``temporary workspace''. We agree that the word ``and'' between the 
two requirements should be replaced with ``or'' and have changed the 
regulation accordingly.
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    53. The definition of affected landowner is meant to encompass 
owners of property either directly within or adjacent to the proposed 
right-of-way and construction area. If a land management agency manages 
land on or adjacent to the proposed right-of-way and construction area, 
it will be considered an affected landowner. While the definition only 
encompasses land on or abutting a proposed right-of-way, the applicant 
must also notify all landowners with a residence within a quarter mile 
of the edge of the construction right-of-way under the notification 
requirements of Sec.  50.4(c)(1). The Commission believes that between 
the definition of affected landowner and the expanded quarter mile 
notification requirement, a sufficient group of individuals will be 
notified of the proposed project.
    54. Stakeholders do not need to be an affected landowner or live in 
a residence within a quarter mile of the proposed site to participate 
in the Commission's proceedings. Under the definition of stakeholder in 
Sec.  50.1, any interested entity or person may file comments as a 
stakeholder and participate in the Commission's process. Even if a 
specific land management agency is not included in the definition of 
affected landowner, it can still participate as a stakeholder. Resource 
Report 8, in Sec.  380.16(j), requires that the applicant identify the 
existing land use in the vicinity of the proposed facility, including 
areas designated for studies under Federal law under Sec.  
380.16(j)(7). If, for some reason, a specific land management agency is 
not identified in the early planning stages of a project, as discussed 
below, during the pre-filing process Commission staff will work with 
the applicant to determine if any potential stakeholder has been missed 
and if they have, to make sure that they have had notice of the 
proposed project and an opportunity to participate.
    55. Southern states that owners with property interests that abut 
an existing right-of-way should not be included in the definition of 
affected landowners unless it becomes necessary to secure easements or 
other rights from such owners. It argues that the definition should be 
limited to owners of property interests directly affected by the 
project and not to property interests that abut existing rights-of-way. 
Allegheny states that the Commission should only require notification 
of landowners with residence within 50 feet of a construction work 
site, as required under the affected landowner definition under the 
Commission's natural gas pipeline regulations in Sec.  157.6(d)(2)(ii) 
and not expand the landowner group to residences within a quarter mile 
of the right-of-way as required under Sec.  50.4(c).

[[Page 69448]]

    56. While property owners with land that abuts the proposed right-
of-way or with a residence within 50 feet of the proposed construction 
work area may not be required to negotiate easements once the ultimate 
route is determined, one of the purposes of the pre-filing process is 
to review the applicant's proposed route and explore route alternatives 
and variations based on the input the Commission receives from property 
owners and other interested entities and individuals. It is important 
that potentially affected property owners are notified early on in this 
review process to provide the Commission with their views and 
recommendations as required under FPA section 216(d). Additionally, 
once construction commences, abutting property owners may be impacted 
by the construction activities conducted in such close proximity to 
their property and should be made aware of these activities.
    57. The Commission also believes it is appropriate to notify all 
landowners within a quarter mile of the proposed right-of-way. Unlike 
gas pipelines which are generally buried underground, electric 
transmission lines can be seen from greater distances. Therefore, more 
surrounding landowners should be directly notified by the applicant. 
The fact that these landowners are not designated as affected 
landowners does not diminish their right to be notified and participate 
in the Commission's proceedings. Additionally, the Commission will also 
notify these individuals of its intent to conduct its environmental 
review and will seek comments from them during that review.
    58. PG&E states that the Commission should defer to States' 
distance requirements for notification of affected landowners. It 
requests that where there is no corresponding State requirement, the 
Commission should designate the appropriate minimum distance between 
the proposed project and a landowner's property that would trigger the 
direct notification requirement. National Grid recommends that the 
Commission only require notification within 300 feet of the 
construction right-of-way.
    59. The Commission does not believe it is appropriate to defer to 
States' distance requirements for notification of affected landowners 
or that notification within 300 feet is sufficient to reach the broad 
group of participants that the Commission seeks to include in these 
proceedings. Moreover, having different requirements in different 
States may result in inconsistent requirements along the route of a 
multistate project.
2. Stakeholders and Notification
    60. Section Sec.  50.1 defines a stakeholder as a Federal, State, 
or multistate, Tribal or local agency, any affected non-governmental 
organization, or other interested person. In other words, a stakeholder 
includes agencies and individuals contemplated under FPA section 216(d) 
and the permitting agencies contemplated under FPA section 
216(h)(3).\23\ Under Sec.  50.4(c) the applicant is required to notify 
all known stakeholders, including affected landowners, of the proposed 
new facilities or modification of existing facilities within 14 days 
after the Director of OEP or his designee notifies the applicant of the 
commencement of the pre-filing process. Additionally, under proposed 
Sec.  50.4(c)(1)(ii), the applicant must publish the notice of the pre-
filing request and application filing twice in a daily or weekly 
newspaper of general circulation in each county in which the facilities 
will be located.
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    \23\ Section Sec.  50.1 defines a permitting entity as any 
entity, including Federal, State, Tribal, or multistate, or local 
agency that is responsible for conducting reviews for any Federal 
authorization that will be required to construct an electric 
transmission facility in a national interest electric transmission 
corridor.
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    61. Communities states that while counties are technically included 
in the definition of a person under Sec.  385.102(d) of the 
Commission's regulations they should, nevertheless, be prominently 
listed as stakeholders for the purposes of these regulations. Imperial 
states that as a political subdivision, it should be accorded 
stakeholder status. The Commission considers any interested entity or 
individual to be included in its definition of stakeholder in Sec.  
50.1 of the regulations. Thus, if a particular entity, such as a non-
public utility or a county, is not specifically listed in the 
definition of stakeholder, it still may comment and participate in the 
Commission's proceedings.
    62. SoCal Edison, PG&E, and NRECA request that the applicant 
provide electric utilities and affected transmission owners and 
operators with notice and opportunities to participate in the process 
if they would be connected to an applicant's proposed transmission 
facility, provide service in the service area, or would be impacted, 
either by environmental, reliability or structural impact, as a result 
of the project. Western Energy Board requests that the applicant should 
also notify individuals who have expressed an interest in the State 
proceeding. It also requests that the Commission include a requirement 
for the applicant to periodically update the notification list as 
properties change hands.
    63. The Commission agrees that electric utilities and transmission 
owners and operators that are connected to the applicant's proposed 
transmission facilities should be notified of the proposed project.