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This Alert reviews the decision of a divided Fourth Circuit (in Piedmont Environmental Council v. FERC) holding that the Federal Energy Regulatory Commission (FERC) does not acquire siting jurisdiction if a state “denies” approval for a transmission line within a national interest electric transmission corridor.

What divided the court?

The Federal Power Act gives FERC “backstop” federal authority to site transmission lines in limited circumstances, including when a state has “withheld approval for more than 1 year.” In this instance, FERC took the view that this phrase applies where a state has denied approval as to the siting of transmission lines and where that denial has continued for a year (NB if you find the syntax of the last sentence odd, you probably would side with the court's majority), ie that “denial” and “withholding” of approval were effectively the same thing. The majority disagreed, holding that FERC’s substitution of "denied" for "withheld" “renders the entire phrase nonsensical because, in the context of dealing with a permit application, the final nature of ‘denied’ conflicts with the continuing nature of ‘for more than 1 year.’ FERC would thus change the clear meaning of the provision because the denial of a permit application within one year ends the application process, and there is nothing about that terminated process that would continue for more than one year.”

The Alert covers the dissent’s equally emphatic, and opposite, reading of the phrase (ie that the two terms are synonymous) and notes that policy concerns featured large on both sides of the argument. It is the policy concerns and not the seemingly sophistic “denied/withheld” debate that leads the Alert to conclude that transmission siting will likely be part of the energy and environmental bill on the Congress’s 2009 agenda debate.

Please see our Hot Topics for more on this subject.