Transmission siting in deregulated wholesale power markets: Re-imagining the role of courts in resolving federal-state siting impasses

Duke Environmental Law and Policy Forum

Volumn 15, Issue 2, 2005, Pages 315-339

  Rossi, Jim ^a  

^a FLORIDA STATE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

DEREGULATION; ENERGY MARKET; LAND USE PLANNING; LEGISLATION; SITE SELECTION;

EID: 27944464549     PISSN: 10643958     EISSN: 10643958     Source Type: Journal    
DOI: None     Document Type: Article

References (119)

1. See The Energy Foundation/The Hewlett Foundation, Siting Power Plants: Recent Experiences in California and Best Practice in Other States (2002), at http://www.ef.org/documents/Siting_Report.pdf (describing the traditional power plant siting practices in California and other states);
2. Edison Electric Institute, State-Level Electric Transmission Line Siting Regulations (2001), at http://www.eei.org/industry_issues/ energy_infrastructure/transmission/siting_directory.pdf (noting that siting of transmission lines has traditionally been regulated at the state level).
3. See also Linda L. Randell & Bruce L. McDermott, Chonicle of a Transmission Line Siting, Pub. Utils. Fortnightly, Jan. 1, 2003, at 1 (referring to the "good old days" of transmission line siting).
4. Ashley C. Brown & Damon Daniels, Vision Without Site; Site Wthout Vision, Elec. J., Oct. 2003, at 23, 24 ("The traditional siting regime ... envisioned a two-part analysis: one to ascertain need and one to judge the environmental effects of available options.").
5. See infra Part I.
6. See Randall & McDermott, supra note 1.
7. TransEnergie U.S., Ltd., 91 F.E.R.C. ¶ 61,230 (2000).
8. See Regional Energy Reliability And Security: Doe Authority To Energize The Cross Sound Cable: Hearing before the Subcomm. on Energy and Commerce, House Comm. on Energy and Commerce, 108th Cong. 55-56 (May 19, 2004) [hereinafter Hearing] (statement of Jeffrey A. Donahue, Chairman & CEO, Cross-Sound Cable Co.).
9. Id. at 18 (referring to Connecicut DEP refusal to modify permit).
10. The technical advantage to operating two transmission lines between Connecticut and Long Island, as opposed to one, is that this would allow electric power to travel in a semi-circular loop - in and out of Long Island, depending on load.
11. Id. at 56.
12. Id. at 59.
13. Id. at 56.
14. Linda Randell & Bruce McDermott, Cross-Sound Blues: Legal Challenges Continue for the Undersea Transmission Line, Pub. Utils. Fortnightly, Feb.2004, at 20.
15. Bruce W. Radford, Cross-Sound Cable Puts Feds on the Spot, Fortnightly's Spark, June 2004, at 1, 3.
16. Id. at 10.
17. Conn. Governor Signs Moratorium on Grid Projects, Keeping Cross Sound in Limbo, Power Markets Week, June 30, 2003, at 31.
18. Under Section 202(c) of the FPA, the U.S. Secretary of Energy can mandate operation of a transmission line over objections of state regulators, but only in the context of an emergency - not where it is merely found to be in the public interest.
19. Parties Set Deal to Energize Cross Sound Cable, Inside F.E.R.C., June 28, 2004, at 1 [hereinafter Parties Set Deal].
20. Hearing, supra note 6 (statement of Patrick Wood, III, Chairman, FERC).
21. Radford, supra note 13, at 10.
22. See supra notes 1 & 2 (describing state siting process).
23. See also Donald F. Santa & Richard Sikora, Open Access and Transition Costs: Will the Electric Industry Transition Track Natural Gas Industry Restructuring, 25 Energy L. J. 113, 123 (2004) (noting "state regulators' jurisdiction over a traditional electric utility's retail operations include: retail rate setting, construction and siting of generating and transmission facilities").
24. Radford, supra note 13.
25. Parties Set Deal, supra note 17.
26. New York and Connecticut Agree to End Cable Dispute, N.Y. Times, June 25, 2004, at B6.
27. Interestingly, the most vocal opponent of the transmission line, Connecticut Attorney General Richard Blumenthal, was excluded from the negotiations. They Can Bury the Cable, But Not the Controversy, Hartford Courant, July 7, 2004, at A9.
28. Brown & Daniels, supra note 2.
29. Id.
30. The Commerce Clause provides that "the Congress shall have power ... to regulate Commerce... among the several States...." U.S. Const. art. I, § 8, cl. 3.
31. Oliver Wendell Holmes, Collected Legal Papers 295-96 (1920).
32. Skeptics believe that the purposes of the dormant commerce clause can readily be served by other more textually explicit constitutional doctrines, such as the Import-Export Clause of Article I, Section 10 or the Privileges and Immunities Clause of Article IV, Section 2. These alternatives are not without their own critics. See, e.g., Brannon P. Denning, Why the Priveleges and Immunities Clause of Article IV Cannot Replace the Dormant Commerce Clause Doctrine, 84 Minn. L. Rev. 284 (2003);
33. Brannon P, Denning, Justice Thomas, The Import-Export Clause, and Camps Newfound/Owatonna v. Harrison, 70 U. Col. L. Rev. 155 (1999). However, for purposes of this Article, let it suffice to emphasize that the alternatives would make protections against interstate regulatory barriers much narrower.
34. Balwdin v. G.A.F. Selif, Inc., 294 U.S. 511, 522 (1935).
35. Id.
36. H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 531 (1949).
37. 519 U.S. 278 (1997).
38. Id. at 281-82.
39. Id. at 301.
40. 511 U.S. 383 (1994).
41. Id. at 386-87.
42. Id. at 387-88.
43. Id. at 386-87.
44. Id. at 393.
45. Id. at 389, 394.
46. Buck v. Kuykendall, 267 U.S. 307 (1925). Justice Brandeis wrote for the Court: [The statute's] primary purpose is not regulation with a view to safety or to conservation of the highways, but the prohibition of competition. It determines not the manner of use, but the persons by whom the highways may be used. It prohibits such use to some persons while permitting it to others for the very same purpose and in the same manner.
47. Id. at 315-16.
48. Reeves, Inc. v. Stake, 447 U.S. 429 (1980);
49. Hughes v. Alexandria Scrap Corp., 426 U.S. 794 (1976).
50. While many have criticized this exemption to dormant commerce clause jurisprudence, it is defended as a pragmatic balance between competing federalism concerns. Dan T. Coenen, Untangling the Market-Participant Exception to the Dormant Commerce Clause, 88 Mich. L. Rev. 395 (1989).
51. The exemption is limited, and is not automatically available where the state could expand into the market; To avail itself of the exemption the state must establish that it is a market participant and may not use mere contractual privity to immunize downstream regulatory conduct in a market in which it is not a direct participant. South-Central Timber Dev. v. Wunnicke, 467 U.S. 82 (1984).
52. C&A Carbone, 511 U.S. at 387.
53. Paul E. McGreal, The Flawed Economics of the Dormant Commerce Clause, 39 Wm. & Mary L. Rev. 1191, 1223 (1998).
54. General Motors Corp v. Tracy, 519 U.S. 278, 300 (1997).
55. H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525,539 (1949).
56. McGreal, supra note 44;
57. Steven Gey, The Political Economy of the Dormant Commerce Clause, 17 NYU Rev. of L. & Soc. Change 1 (1989-90);
58. Julian N. Eule, Laying the Dormant Commerce Clause to Rest, 91 Yale L. J. 425 (1982).
59. See supra note 42 (discussing the market participant exception).
60. For example, one of the leading cases suggesting that the dormant commerce clause allows the setting of rates is Munn v. Illinois, 94 U.S. 113 (1876) (upholding legislative approval of joint price agreement by grain elevators in Chicago against a dormant commerce clause challenge, given concern with regulating a common carrier as a monopoly in the "public interest").
61. 519 U.S. at 825.
62. Eule, supra note 47, at 430.
63. Order No. 888, Promoting Wholesale Competition Through Open Access Non-discriminatory Transmission Services by Public Utilities and Recovery of Stranded Costs by Public Utilities and Transmitting Utilities and Recovery of Stranded Costs by Public Utilities, 61 Fed. Reg. 21,540 (May 10, 1996).
64. Jim Chen, A Vision Softly Creeping: Congressional Acquiesence and the Dormant Commerce Clause, 88 Minn. L. Rev. 1764 (2003).
65. See supra note 47.
66. 512 U.S. 186 (1994).
67. United States v. Carolene Products, 304 U.S. 144, 152 n.4 (1938).
68. John Hart Ely has applied the representation-reinforcing role of Carolene Products to equal protection jurisprudence. John Hart Ely, Democracy and Distrust (1980).
69. 512 U.S. at 200
70. (citing Minnesota v. Clover Leaf Creamery Co., 499 U.S. 456, 473 n.17 (1981) and other cases).
71. For elaboration of this view, see Maxell L Stearns, A Beautiful Mend: A Game Theoretical Analysis of the Dormant Commerce Clause Doctrine, 45 Wm & Mary L. Rev. 1 (2003).
72. Tampa Elec. Co. v. Garcia, 767 So. 2d 428, 436 (Fla. 2000).
73. C&A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 416 (1994) (Souuter, J., dissenting). According to the dissent, "The Commerce Clause was not passed to save the citizens of Clarkstown stown from themselves.
74. " Id. at 432. Thus, the dissent rejects extending the political process account beyond scenarios that discriminate between local and out-of-town participants.
75. See supra note 42 (describing the market participant exception).
76. See supra notes 35-43.
77. Id.
78. As Ashley Brown and Damon Daniels observe, "Because very few states include explicit reference to regional considerations in the substantive law governing eminent domain or siting authority, it is left to siting officials and reviewing courts to factor regional effects into the calculation of which projects serve the public interest." Brown & Daniels, supra note 2, at 26. If a state legislature fails to delegate such authority to a regulator, there is a potential problem of inaction on the part of both state legislatures and regulators.
79. Judge Richard Cudahy sees federal regulation of electric power transmission "more or less inherent in the scheme of deregulation and competition, which depends for its functioning upon widespread access to the transmission network." Richard D. Cudahy, Full Circle in the Formerly Regulated Industries?, 33 Loy. U. Chi. L.J. 767, 768 (2002).
80. Richard Pierce embraces expanded congressional authorization for the Federal Energy Regulatory Commission to resolve transmission siting disputes, noting the inevitable incentives states face to erect impediments to interstate commerce. Richard J. Pierce, Jr., Environmental Regulation, Energy & Market Entry, 15 Duke Envtl. L. & Pol'y Forum 167 (2005) (Duke Environmental Law & Policy symposium contribution).
81. For more than a decade, Pierce has been arguing for the same basic congressional solution. Richard J. Pierce, Jr., The State of the Transition to Competitive Markets in Natural Gas and Electricity, 15 Energy L. J. 323 (1994).
82. Jim Chen advocates increased federal authority over telecommunications for similar reasons. Jim Chen, Subsidized Rural Telephony and the Public Interest: A Case Study in Cooperative Federalism and Its Pitfalls, 2 J. Tel. & High Tech. L. 307 (2003).
83. Edward Comer, FERC and the States: A Marriage of Necessity, Elec. J., November 2004, at 85, 87 (advocating "national energy legislation that contains a provision for the Commission to have limited backstop transmission siting authority to help site transmission lines in 'interstate congestion areas' designated by the Department of Energy is states have been unable to agree or move forward.").
84. Id. at 86 ("Regional transmission organizations can play an important part in planning and expanding transmission systems to meet the needs of regional electricity markets.").
85. In this symposium issue, for instance, Professor Pierce embraces expanded congressional authorization for FERC to resolve transmission siting disputes, Pierce, Environmental Regulation, Energy & Market Entry, supra note 65. However, Congress has consistently failed to act to adopt such proposals.
86. Roderick M. Hills, Jr. Against Preemption: How Federalism Can Improve the National Lawmaking Process, available at http://papers.ssm.com/sol3/ Papers.cfm?abstract_id=412000 (last visited Mar. 5, 2005).
87. Richard B. Stewart, Madison's Nightmare, 57 U. Chi. L. Rev. 335. (1990).
88. Peter Berh & Dan Morgan, Without Energy Legislation, Grid, Power Policy in Limbo, Wash. Post, Nov. 27, 2003, at E01.
89. Carl Hulse, Even With Bush's Support Wide-Ranging Legislation May Have Been Sunk With Excess, N.Y. Times, Nov. 26, 2003, at A17.
90. Bruce Cain, John Ferejohn, & Morris Fiorina, The Personal Vote: Constituency Service and Electoral Independence (1987).
91. Dan Morgan, The GOP Congress, High on the Hog, Wash. Post, Jan. 18, 2004, at B01.
92. Id.
93. Samuel H. Beer, Political Overload and Federalism, 10 Polity 5 (1977).
94. John W. Kingdon, Agendas, Alternatives, and Public Policies 16-18 (1995).
95. In 2004, Senator Hillary Clinton proposed a stand-alone reliability bill, presumably because she had concluded that the larger energy bill was doomed. See Senator Clinton to Push Reliability Bill, Urges Lawmakers to Pass It Apart from the Energy Bill, Elec. Util. Week, Jan. 20, 2004 at 3. However, with an election year in 2004, many considered a more streamlined bill unlikely to pass Congress unless it was very modest.
96. See supra note 65 (describing the prospect of federal intervention).
97. Parties Set Deal, supra note 17.
98. See, e.g., Pierce, Environmental Regulation, Energy & Market Entry, supra note 65;
99. Comer, supra note 66.
100. See Brown & Daniels, supra note 2.
101. Concerned with their states becoming transmission superhighways or power plant siting grounds for others, many states have considered or adopted such moratoria. See, e.g., Conn. Governor Signs Moratorium on Grid Projects, Keeping Cross Sound in Limbo, Power Markets Week, June 30, 2003, at 31 (describing Connecticut's moratorium on new transmission lines);
102. Florida County Imposes Power Plant Moratorium, Elec. Daily, July 2, 2001, at 1 (describing Broward County, Florida, moratorium that stalled a 511 MW merchant power plant that had been approved by city officials in Deerfield Beach, Florida);
103. Indiana Communities Press for Power Plant Moratorium, Indianapolis Star, March 1, 2000 (indicating governor's support for power plant moratorium).
104. Tampa Elec. Co. v. Garcia, 767 So. 2d 428, 435 (Fla. 2000) (holding that state's power plant siting statute "was not intended to authorize the determination of need for a proposed power plant output that is not fully committed to use by Florida customers who purchase electrical power at retail rates,").
105. Deisinger, 2000; Nervous of NOx, Southern Govs. Put Plants on Hold, Elec. Daily, Aug. 28, 2001;
106. State Limits on Merchant Plants a Growing Worry, Generation Weekly, Aug. 22, 2001.
107. Tampa Elec. Co. v. Garcia, 767 So. 2d 428, 435 (Fla. 2000).
108. See Hills, supra note 69.
109. Roderick M. Hills, Jr. Dissecting the State: The Use of Federal Law to Free State and Local Officials From State Legislatures' Control, 97 Mich. L. Rev. 1201 (1999).
110. See supra note 52 (referencing Order No. 888).
111. The Commerce Clause authorizes Congress to regulate activities such as electric power transmission. Federal Courts interpret the scope of delegations to federal agencies. Thus, under federal preemption doctrine, federal courts have the authority to override state legislatures where national interests authorized by Congress warrant it.
112. Much as Hills envisions courts presumptively authorizing state and local officials to pursue national goals. Hills, supra note 88.
113. See supra Part II (discussing dormant commerce clause).
114. See, e.g., Ex Parte Elliott, 973 S.W.2d 737 (Tex. App. 1998);
115. McFaddin v. Jackson, 738 S.W.2d 176 (Tenn. 1987);
116. Dep't of Legal Affairs v. Rogers, 329 So. 2d 257 (Fla. 1976).
117. Thus, even where federal courts do not exercise such authority, state courts might authorize such action as the best interpretation of state constitutional separation of powers doctrine. As I have argued elsewhere, implicit authorization for state executive and local agencies to act on behalf of federal goals is the best interpretation of state separation of powers - a matter of state constitutional law. Jim Rossi, Dual Constitutions and Constitutional Duels, Wm. & Mary L. Rev._ (forthcoming 2005).
118. See supra note 90.
119. Hearing, supra note 6 (statement of Patrick Wood, III, Chairman, FERC).