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The U.S. Department of Energy (DOE) has withdrawn a proposal that would have transferred its authority to designate National Interest Electric Transmission Corridors (NIETCs) to the Federal Energy Regulatory Commission (FERC).

The DOE says retaining this authority will allow it to handle its designation duties under Section 216 of the Federal Power Act more effectively and efficiently.

As a result, the DOE will immediately begin to identify targeted areas of congestion based on the evaluation of existing information and on comments submitted by stakeholders; identify narrower areas of congestion than the broad areas previously studied; and solicit statements of interest from transmission developers while considering what NIETCs to designate.

In addition, DOE says it will work with FERC to prepare drafts of transmission congestion studies mandated by Congress; supplements to those congestion studies based on, among other things, the transmission plans prepared pursuant to Orders 890 and 1000; and the environmental analyses for any proposed NIETC.

Jim Hoecker, counsel to WIRES, an industry group focused on supporting the electric transmission sector, says the impact of DOE's decision is unclear.

"We're going to end up with a bit of trial and error going forward," he tells Renew Grid. "It means that transmission siting is going to continue to be a difficult issue. We will have to see how good the Department of Energy and FERC are at working out a more cooperative, more efficient arrangement."

Hoecker, a former chairman of FERC, believes the original section 216 statute is flawed, so the effect of this latest decision is unknown.

"It's a federal scheme that doesn't really solve the basic problem, and the basic problem is that you have multiple agencies in multiple jurisdictions with responsibility for siting a single project," he says. "It's expensive, it's inefficient, takes a lot of time and it doesn’t necessarily result in better environmental review."

When the DOE announced last month that it was considering transferring authority to FERC, many were against the idea.

Sen. Jeff Bingaman, D- N.M., sent a letter to Energy Secretary Steven Chu in September recommending that he not delegate that authority. The senator, who is chairman of the Energy and Natural Resources Committee, was one of the principal authors of the act. He said in a statement at the time that congressional intent was for the DOE to take the lead in identifying grid congestion and proposing transmission corridors.

Section 216 of the act requires the secretary to conduct triennial studies of electric transmission congestion and also authorizes the secretary to designate any area experiencing congestion that adversely affects consumers as a "national interest electric transmission corridor," Bingaman wrote in the letter to Chu.

The National Association of Regulatory Utility Commissioners (NARUC) issued a statement applauding the DOE's decision to retain authority.

"While we still need to see the details of this proposal, it is clear that Energy Secretary Steven Chu gave strong weight to the concerns raised by us and numerous other parties," Charles Gray, executive director of NARUC, said in a statement.

"State public service commissioners understand as much as if not more than, anyone else about the importance of modernizing our nation’s electrical system."

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