Instead of transferring to the Federal Energy Regulatory Commission (FERC) its authority to conduct congestion studies and establish a process for designating national transmission corridors under section 216 of the Federal Power Act (FPA), as it was considering last month, Energy Secretary Steven Chu said the Department of Energy would work “more closely” with FERC in reviewing new transmission projects.

The DOE said that it recognized it could execute its § 216(a) powers “better, faster, with more transparency, and more effectively.”

The agency had considered delegating its authority to designate “National Interest Electric Transmission Corridors” and conduct congestion studies because it would remove transmission development barriers that had arisen as a result on an ineffective backstop transmission procedure established by Congress. The move had been criticized by several industry groups, including the National Association of Regulatory Utility Commissioners (NARUC), which said it would inhibit new power lines by creating uncertainty.

In July and August, the proposal was presented to stakeholder groups to solicit comments. In addition to oral comments, 61 written comments were submitted, the DOE said.

“This nation promptly needs to build the electric grid of the 21st century to compete in the global economy,” Chu said. “Enhanced cooperation between DOE and FERC is the best way to help achieve this goal. I look forward to working with Chairman Wellinghoff as we take steps to ease congestion and increase reliability while modernizing the grid."

The two federal bodies are expected to jointly prepare drafts of congestion studies, supplements to those congestion studies that will be based on transmission plans prepared in accordance with Orders 890 and 1000, and environmental analyses for proposed national corridors.

The DOE also expects to “begin immediately to identify targeted areas of congestion based on the evaluation of existing information and on comments submitted by stakeholders; identify narrower areas of congestion than the broad areas previously studied; and solicit statements of interest from transmission developers while considering what National Corridors to designate.”

NARUC hailed the decision as a “positive development.” NARUC Executive Director Charles Gray said that while the group still needed to review details of the proposal, it was clear that “Energy Secretary Steven Chu gave strong weight to the concerns raised by us and numerous other parties. State public service commissioners understand as much if not more than anyone else about the importance of modernizing our nation’s electrical system. We are working across State boundaries and ensuring that needed transmission is built in a timely fashion giving all parties, from consumers to landowners, a voice.”

Sources: POWERnews, DOE, FERC, NARUC