Nearly two decades ago, Congress attempted to speed up transmission development by defining a federal pathway to get lines built. Still, the multi-step process failed to create a usable regulatory structure. The authority was narrowly defined in court cases and never applied to a single line. Last year the Infrastructure Investment and Jobs Act (IIJA) reinvigorated the approach, which requires developers to go through a state-by-state regulatory review for those lines that fit the Department of Energy’s assessment of national importance first, before they can pursue the federal permitting process. Senator Joe Manchin’s (D-WV) proposed permitting legislation took a crack at streamlining cumbersome and duplicative processes but erred towards stepping on state authority, raising alarm bells for some state regulators. 

Manchin’s proposal is a good start at fixing the overregulation of electricity transmission but needs some fine-tuning to avoid federal overreach. While there is one element of the proposal that should remain intact, three others should be fixed to establish an appropriate federal role in transmission.

One thing to keep: Streamline government involvement

The primary breakthrough in the Manchin proposal is the recognition of a simple principle: Multi-state infrastructure should be sited at the federal level. This has been true for natural gas pipelines for almost 90 years and should be the case for transmission lines. The proposed legislation takes a crucial step forward by removing unnecessary levels of government review and attendant delays. The proposed text says that if a transmission line is in the national interest (according to an eight-factor assessment that includes national security, consumer cost reductions, and electric reliability) there’s no logical reason to go through a state-by-state siting process in addition to a federal one. There will only be one process shared between the Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC). 

It doesn’t strip states of their authority over most transmission lines, which will still go through state processes. But, for a small number of lines that are critical for electricity reliability, energy security, and economic relief, federal authority is a more streamlined approach.

Three things to fix:

# 1: Reduce agency discretion and federal overregulation

Federal transmission siting requires involvement from DOE and FERC, and their authority and discretion have increased over time. The 2005 Energy Policy Act gave both DOE and FERC a role in transmission, with DOE considering where it is in the national interest and FERC siting such transmission if states did not. The IIJA expanded the definition of what DOE may deem in the national interest and granted FERC more authority to overrule a state’s objection. Senator Manchin’s proposal adds FERC authority to pre-assess projects for DOE consideration, creating a FERC-to-DOE-to-FERC process for a transmission line. 

A new approach could significantly reign in federal agencies by delineating a clear and limited role for a single federal agency. Congress could establish a bright-line test, giving FERC authority to site only high capacity interstate transmission lines. Though transmission data is difficult to come by, a high capacity standard of 1000 MW would single-handedly ensure that more than 75 percent of transmission miles built in the U.S. remain solely under state jurisdiction. A standard limited to high-capacity and interstate lines would ensure that the vast majority, likely upwards of 90 percent, of transmission remains under state regulators’ jurisdictions.*

#2: Don’t take state land

Manchin’s text would have allowed FERC to take state land to build a transmission line– an overreach that the next permitting bill should omit. Even the Natural Gas Act did not explicitly authorize eminent domain for state land. That a natural gas pipeline can now condemn state land is an authority derived from a 2021 Supreme Court decision. 

The next permitting bill should cut this attempt to sideline states’ sovereignty over their land. Improved legislation would allow states a seat at the table to negotiate how their land gets used and the compensation they would derive. A new bill should include a provision that prevents land owners from gifting land to a state specifically to block energy development. 

#3: Clarify FERC’s role in cost allocation

State regulators and eighteen Attorneys General bemoaned the cost allocation language in Manchin’s proposal as a wide open door for federal overreach. Indeed, the text on this point is open to interpretation. Does it require FERC to undertake new rulemaking? Is it, as detractors suggest, creating an opportunity for FERC to establish itself as the cost-allocator-in-chief for all transmission lines? What does that mean for existing cost allocation practices and rules?

As it stands, FERC is currently updating rules governing cost allocation agreements for regional lines. Still, there is no rulemaking underway regarding cost allocation for interregional lines. The lack of clarity on how these lines should be paid for stymies the development of infrastructure we need for an affordable, reliable, and resilient grid. Congressional direction about cost allocation would be welcome, and the certainty it provides would likely boost investments. However, unlike the vague language in the Manchin proposal, helpful bill text would confirm that FERC has the authority to allocate the costs for interregional projects to multiple regions commensurate with the benefits.

Manchin’s proposal is absolutely correct that government involvement should be minimized, and we must remove unnecessary steps. His proposal would be much stronger if it acknowledged that the federal government’s role also needs to be streamlined when it comes to transmission, and recognized the valuable role that states serve in ensuring a reliable grid. We can streamline transmission without stepping on states’ rights.

*This estimate uses 1000 megawatts (MW) or mega volt-amperes (MVA) as a minimum high capacity line. A capacity standard allows for more technology flexibility than a voltage standard, but most available data is reported by voltage. A 1000 MVA threshold is roughly equivalent to a 300 kilovolts (kV).

According to NERC transmission data for US only miles, 75% of all US transmission is less than 300 kV. That even holds up for recent buildout: 74% of all miles built in the last 6 years are less than 300kV.

Note, the online NERC Element Inventory is all North America. We requested and received a summary of US only miles.

Also from NERC data, 18% of all 300+kV transmission is within the Texas Reliability Entity, which by definition is one state. 

Consider MISO, the midwest serving grid operator, to estimate the remaining percentage of interstate lines. MISO undertook one major high capacity expansion in the 2010s (MVP) and is developing a second one (LRTP).

6 of 17 MVP projects were multistate

7 of 18 LRTP projects will be multi state.

Slightly less than 40% of these high capacity transmission expansion projects are interstate. 

Extrapolating from there, an estimated ~8% of high capacity lines are interstate.