Item E-2 | News Release 

Good morning, Chairman Phillips and Commissioners.

Item E-2 is a draft final rule that revises the Commission’s regulations governing applications for permits to site electric transmission facilities under section 216(b) of the Federal Power Act.

In the Energy Policy Act of 2005, Congress established a limited Federal role in electric transmission siting, which has traditionally resided solely with the States, by adding section 216 to the Federal Power Act.  Section 216(a) directs the Department of Energy (or “DOE”) to study electric transmission congestion and authorizes DOE to designate national interest electric transmission corridors (or “National Corridors”).  Section 216(b) authorizes the Commission, under specified circumstances, to issue permits to build or modify electric transmission facilities in National Corridors.  Pursuant to this statutory authority, the Commission added Part 50 to its regulations to define the permit application process, and the Commission modified existing Part 380, which implements the National Environmental Policy Act of 1969 (or “NEPA”).

In the Infrastructure Investment and Jobs Act of 2021 (or “the IIJA”), Congress amended section 216 in part to clarify the circumstances giving rise to the Commission’s jurisdiction.  With respect to the Commission’s siting authority, the IIJA clarified that the Commission may issue a permit if a State has denied an application.  The Act also amended section 216(e) to require the Commission to determine, as a precondition to a permit holder exercising eminent domain authority, that the permit holder has made “good faith efforts to engage with landowners and other stakeholders early in the applicable permitting process.”

To align the Commission’s regulations with the IIJA and to update certain regulatory requirements, the Commission issued a Notice of Proposed Rulemaking (or “NOPR”) on December 15, 2022, proposing revisions to Parts 50 and 380.  The Commission received over fifty comments in response to the NOPR, including from 14 State commissions, which informed the determinations in the draft final rule. 

The draft final rule adopts many of the regulatory changes proposed in the NOPR and makes additional modifications and clarifications throughout Parts 50 and 380.  However, the draft final rule reconsiders the NOPR proposal to eliminate the existing policy of a one-year delay between the filing of the relevant State siting applications and the commencement of the Commission’s pre-filing process.  The NOPR proposal would have allowed State siting proceedings and the Commission’s pre-filing process to proceed simultaneously.  But after further consideration and review of comments, including those shared by State commissioners at the February 28, 2024, meeting of the Joint Federal-State Task Force on Electric Transmission, the draft final rule declines to adopt the NOPR proposal to allow simultaneous processing. 

I will now highlight a few of the regulatory changes adopted in the draft final rule.

First, consistent with the IIJA’s amendments to section 216, the draft final rule clarifies that the Commission has the authority to issue permits to construct or modify electric transmission facilities in a National Corridor if a State has denied a siting application.  The draft final rule also updates and clarifies the definitions and project notification requirements set forth in Part 50.  

Second, the draft final rule codifies the Applicant Code of Conduct.  Compliance with the code of conduct is one way that an applicant may demonstrate that it has made good faith efforts to engage with landowners early in the applicable permitting process as required by section 216(e)(1).  The Applicant Code of Conduct includes recordkeeping and information-sharing requirements for engagement with affected landowners, as well as general prohibitions against misconduct.  The draft final rule also allows for alternative methods of demonstrating that an applicant meets the “good faith efforts” statutory standard.

Third, the draft final rule requires applicants to develop engagement plans that describe completed and planned outreach to environmental justice communities and Indian Tribes.  A Tribal Engagement Plan is being added to the draft final rule in response to comments.  Applicants will provide this information as part of a Project Participation Plan, which must be filed early in the pre-filing process.   The information gathered through tailored engagement will inform the application.

My colleague, Maggie Suter, from the Office of Energy Projects will now highlight some of the environmental information that an application must include. 

The draft final rule updates and clarifies the environmental information required for existing applicant-prepared resource reports.  The draft final rule also includes three new resource reports in which applicants must provide information regarding a proposed project’s impacts on air quality and environmental noise, on environmental justice communities, and on Tribal resources. 

As part of the new Air quality and environmental noise resource report, and consistent with the Commission’s obligations under NEPA and the Clean Air Act, the applicant must estimate emissions and noise from the proposed project and the corresponding impacts on air quality and the environment.  The report must also describe any proposed mitigation measures.  In addition, the draft final rule establishes an operational noise limit for proposed substations and related facilities at nearby noise-sensitive areas, such as schools, hospitals, or residences.

In the new Environmental justice resource report, the applicant must begin by using current guidance and data to identify environmental justice communities within the area of potential project impact.  Once environmental justice communities have been identified, the applicant must describe the impacts of project construction, operation, and maintenance on those communities.  In addition, the resource report must discuss cumulative impacts, describe any proposed mitigation measures, and describe any community input received on the proposed mitigation measures. 

The new Tribal resources resource report consolidates existing requirements that the applicant submit information describing the proposed project’s effects on Indian Tribes, Tribal lands, and Tribal resources.  The report also includes new requirements that the applicant identify potentially affected Tribes and describe the impacts of project construction, operation, and maintenance on Tribes and Tribal interests.  The draft final rule modifies the NOPR proposal by requiring the applicant to describe any proposed mitigation measures to avoid or minimize impacts on Tribal resources as well as any input received from Tribes on the proposed measures. 

If adopted by the Commission, the draft final rule will become effective 60 days after publication in the Federal Register.

Staff would like to thank all team members that contributed to this rulemaking, including staff from the Office of Energy Projects, the Office of General Counsel, the Office of Public Participation, the Office of Electric Reliability, the Office of Energy Policy and Innovation, and the Office of Energy Market Regulation.   

This concludes our presentation.  We are happy to answer any questions you may have.

This page was last updated on May 13, 2024