Why It Matters

The Department of Energy announced on August 12 that it would not proceed with designating three proposed National Interest Electricity Transmission Corridors (NIETCs), reversing the former Biden administration's initiative to expand federal authority over power grid construction.

According to a new report from the Congressional Research Service, the three corridors targeted were the Tribal Access Corridor through the Dakotas and Nebraska, intended to connect tribal reservations to existing or pending new high-voltage transmission; the Southwestern Grid Connector Corridor through portions of Colorado, New Mexico, and the Oklahoma panhandle, designed to facilitate East-West interregional interconnections; and the Lake Erie-Canada Corridor in northern Pennsylvania, meant to connect the mid-Atlantic's Pennyslvania-New Jersey-Maryland interconnection network with the Canadian power network.

The Secretary of Energy has stated that transmission policy must serve the American people and not a climate-alarmist agenda that drives up costs, worsens reliability, and disregards the concerns of local communities, framing the decision as aligned with Executive Order 14154 and a February 5, 2025 Departmental Order.

The Big Picture

The Federal Power Act, adopted as part of the Public Utility Act of 1935, historically limited the Federal Energy Regulatory Commission's (FERC) authority to wholesale sales, interstate transmission pricing, and allocation, leaving the physical siting of transmission facilities to the states except on federal land.

The Energy Policy Act of 2005 enacted a new Section 216 of the Federal Power Act, establishing backstop siting authority for FERC and authorizing it to issue permits for transmission facility construction or modification in areas designated by the Secretary of Energy as NIETCs. It also mandates studies of electric transmission capacity constraints and congestion every three years, but does not require the Secretary to designate NIETCs based on those studies.

The U.S. Court of Appeals for the Fourth Circuit held in 2009 that FERC had exceeded its statutory authority in its 2006 regulations, concluding that the plain meaning of Section 1221 indicated congressional intent to make backstop federal siting authority available only where a state had not made any decision on proposed facilities, not in cases where state authority had denied the application.

A 2011 decision by the U.S. Court of Appeals for the Ninth Circuit vacated two DOE NIETC designations.

As a result of these rulings, federal transmission siting authority was largely abandoned by the relevant agencies and the process left to the states for the next decade.

The Bottom Line

The DOE's decision to suspend the designation of the three National Interest Electricity Transmission Corridors will not directly change any aspects of the existing electricity transmission permitting structure, since the federal government has never exercised its backstop electricity transmission permitting authority over private or state-owned land, despite having the authority to establish NIETCs for over two decades.

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