Matt Lifson is a legal fellow at the Institute for Policy Integrity.
The Bipartisan Infrastructure Law strengthened the Federal Energy Regulatory Commission’s authority to site interstate transmission projects that have been rejected or not acted upon by states. Used appropriately, this authority can help the United States build the transmission infrastructure necessary to achieve President Joe Biden’s goal of fully decarbonizing the electricity grid by 2035.
However, a transmission line’s net effect on power plant emissions will depend on project-specific factors. A particular line could actually increase generation at fossil-fuel-fired power plants. Or a proposed line could integrate renewable resources into the grid, but less than a plausible alternative route would. Moreover, if we are to ensure that decarbonization happens equitably, it is essential to consider the impacts (including air pollution effects) that different transmission lines can have on environmental justice communities.
Thankfully, FERC’s recently proposed regulations mandate that developers seeking FERC backstop siting permits describe the reasonably foreseeable air pollution and environmental justice impacts of their transmission projects.
Yet powerful actors have attacked the commission’s legal authority to do so. In his concurrence to the proposal, Commissioner James Danly argues that his colleagues are trying to enact an “‘environmental justice’ wish list” and “standardless environmental tests well beyond our statutory authority.” The chair of the House Committee on Energy and Commerce and chair of the House Subcommittee on Energy, Climate and Grid Security accused FERC of violating congressional intent. Others, including the Chamber of Commerce, have echoed these criticisms in their comments on the proposed rule.
These skeptics are wrong on the law, and it is not a close question. FERC is legally required to consider the air pollution and environmental justice impacts of proposed transmission lines. If the commission failed to consider these critical factors, it would be exposing projects to legal risk, potentially entangling them in litigation.
Let’s begin with the text of the statute, specifically the recently amended Section 216 of the Federal Power Act. Congress outlined requirements that FERC must meet before approving a transmission project. One such requirement is whether the line would be “consistent with the public interest.” FERC must consider all aspects of a proposed transmission project that may impact the public interest. Two factors that undeniably affect the public interest are (1) how the project would affect dangerous air pollution and (2) its contribution to the environmental burdens faced by already-overburdened communities.
The courts agree. The Supreme Court has instructed that, for the Federal Power Act, “in order to give content and meaning to the words ‘public interest’ . . . , it is necessary to look to the purposes for which the Act w[as] adopted.” While the primary purpose of the Federal Power Act is developing abundant electricity at reasonable prices, the law’s “subsidiary purposes” provide FERC with “authority to consider . . . environmental . . . questions.”
In the natural gas context, the D.C. Circuit has specifically held that FERC must consider air pollution under the public interest standard. FERC must “find that the project will serve the public interest,” so “FERC could deny a pipeline certificate on the ground that the pipeline would be too harmful to the environment” in light of the emissions from burning the pipeline’s gas. More recently, again in the gas context, the D.C. Circuit confirmed that, when FERC’s “analyses of [a] projects’ impacts on climate change and environmental justice communities [are] deficient, the Commission must . . . revisit its determinations of public interest and convenience.”
Looking beyond FERC’s mandatory public interest analysis, emissions are also relevant to at least two other items that the commission must consider under section 216: whether the transmission line “protects or benefits consumers” and “is consistent with sound national energy policy.” The health and climate impacts of emissions are externalities, i.e., costs of power generation that producers impose on others (including consumers). And a sound national energy policy—as articulated by the Biden administration—includes fully decarbonizing the electricity sector by 2035.
In short, FERC has a legal obligation to consider emissions and environmental justice, so any permit for a transmission project that doesn’t take them into account would be legally vulnerable. This vulnerability could cause delays for developers and hinder grid decarbonization (and efforts to relieve congestion and improve reliability).
Still, although FERC’s proposed rule sets out an important framework, it is not flawless. In particular, one significant problem is that the commission does not make crystal clear that developers’ duty to estimate reasonably foreseeable emissions from transmission lines includes how power plants (including plants that have not yet been built or interconnected) will adjust their output in response to the new transmission capacity. As the Institute for Policy Integrity explained in our own comments to FERC, forecasting these emissions would be relatively straightforward.
Readily available modeling software—either production-cost models or capacity-expansion models—can predict these emissions impacts. Moreover, requiring these estimates from developers would be a relatively light lift given the other power-system modeling that the proposed rule already requires for congestion and reliability. Finally, FERC has a history of requesting and receiving these estimates from developers. When FERC considered a backstop siting application for the Devers-Palo Verde No. 2 Project in 2008, it required the developer to submit “[a]ir emission levels (e.g., carbon dioxide, oxides of nitrogen and particulates) based upon the expected changes in the type, level and location of electric generation associated with the project.” The developer complied with FERC’s request by submitting modeling results showing how the project would cause power plants to increase or decrease their output, and how these shifts would affect emissions.
If FERC were to clarify that developers must estimate power-system emissions—and hold the line on the commission’s authority to consider emissions and environmental justice—it would be well positioned to facilitate the construction of transmission projects aligned with the public interest. But if FERC were to impose artificial limits on its own authority, the transmission lines that it approves may become bogged down in the courts.