Originally published at Law360
… Experts say that many states, which tend to fiercely guard their jurisdiction over retail, non-interstate transmission facilities and transmission siting, may also not welcome the BAAJA allowing FERC to wield more enforcement authority over local planning.
“We’ve always had states very suspicious, very guarded that the feds are trying to take away their local authority,” said Ken Irvin, who co-leads Sidley Austin LLP’s global energy and infrastructure practice and focuses on FERC matters. “It’s going to be a new world for what the states have to deal with vis-à-vis the feds, and I think there’s going to be a reluctance, a hesitancy. I don’t think it’s going to be a warm embrace.”
However, other experts emphasized that FERC would only wield this enforcement authority at the behest of a state, and that the BAAJA provision represents an acknowledgment that some state utility regulators need help in determining whether local transmission facilities are being prudently planned and developed.
Kent Chandler, a former chair of the Kentucky Public Service Commission, said that supervision of local transmission planning and cost recovery for projects is a topic that state utility regulators have frequently raised with FERC, in technical conferences on transmission oversight and with joint task forces between FERC and the National Association of Regulatory Utility Commissioners, the umbrella advocacy group for state utility regulators.
“This is the kind of thing that state utility regulators have been begging for from FERC for the last number of years,” said Chandler, who is now vice president for electricity at energy policy think tank Lighthouse Energy Institute. “I don’t know if it’s that FERC didn’t feel like they had the authority to do it, or that they didn’t have the right toolbox to do it, or the bandwidth to do it. But state regulators have been asking for this, and Congress has, I think, been pretty responsive.”
It remains to be seen how often states would actually ask FERC to use its new enforcement powers if this BAAJA provision is enacted. But the ultimate question is whether the provision will make local and regional transmission development more efficient, or inject additional complications into an already complex, time-consuming process, experts say.
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