A lawyer's take on the Maryland PSC's PATH hearing

thank you for posting this (0.00 / 0)

It is very helpful to know what's going on in other states impacted by the same issues.

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by: Clem Guttata @ Mon Aug 03, 2009 at 22:41:17 PM UTC

The situation in WV is at once worse and better than in MD. (0.00 / 0)

WV statute allows any kind of company to apply for a certificate of need, but a certificate of need can only be issued to a public utility.  This creates an absurd situation which actually happened in the TrAIL case last year.  

TrAILCo, Allegheny Energy's front company, was not a public utility when it applied for a certificate of need, so, in its order granting the certificate of need, the WV PSC had to declare that TrAILCo was a public utility, although TrAILCo had only existed for a few months and had contracted all operation of the TrAIL line to Allegheny Energy.

Under WV law, a public utility must provide a public service.  Although this is a very vague definition, acting as a landlord for a power line is clearly not providing a public service.

The four (count 'em, four) front companies applying for the PATH certificate of need have also asked for the WV PSC to hit them on the head with a magic wand and turn them into public utilities.  This is ridiculous.  It is quite likely that a number of intervenors will object to this charade in the coming months.  I already have.

WV is not under threat of federal takeover, because the US Fourth Circuit declared this FERC rule is unconstitutional in the Fourth Circuit.  MD remains under this federal threat because MD is not in the Fourth Circuit.

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by: Calhouner @ Mon Aug 03, 2009 at 23:28:41 PM UTC

Thanks for the 4th Circuit info (0.00 / 0)

That's an aspect I hadn't thought of. Does the Fourth Circuit provide precedent, or a guide, to what might happen in other circuits?

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by: blonde moment @ Tue Aug 04, 2009 at 01:02:01 AM UTC

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No. (0.00 / 0)

Their ruling only has force in their own circuit.

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by: Calhouner @ Tue Aug 04, 2009 at 01:30:41 AM UTC

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Yes. Md is Fourth Circuit also. (0.00 / 0)

brother-in-law works at SCOTUS, administrative office, his email is ao.uscourts.gov so look at this. Maryland. West Virginia are both Fourth Circuit. Penn. and New Jersey are Third, that's the opportunity for a different ruling and another shot at SCOTUS, unless Sen. Bingaman has '"fixed" it first.

NFTT: Support My Team or I Will Dance

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by: CA Berkeley WV @ Tue Aug 04, 2009 at 05:12:26 AM UTC

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need a recap (0.00 / 0)

Sorry for being slow on this one, I'm getting lost in the 4th circuit weeds here... please lay it out for me really simple, I get the feeling this could be important. :-)

The court ruled what? The ruling means what to the PATH case?

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by: Clem Guttata @ Tue Aug 04, 2009 at 10:12:46 AM UTC

Thanks to CA Berkeley (0.00 / 0)

for the correction on the Fourth Circuit. Clem, remember Cheney's secret energy task force at the beginning of his administration?  That task force came up with an agenda that would federalize the process of building huge new transmission lines that would enable Cheney's buddies like Kenny Boy Lay to trade electricity till the cows came home.  Kenny Boy screwed it all up in California and Enron collapsed, but Citigroup and Goldman Sachs have filled Enron's shoes.

A key part of the Cheney agenda was written into law by the 2005 National Energy Policy Act, passed by the Republican controlled Congress.  That law established the National Impact Energy Transmission Corridors around the US where FERC decided there was electrical system "congestion."  This congestion is not what you and I think of as congestion, but that discussion is for another time.  Suffice it to say that this congestion is about whether traders can make money, "economic congestion," and is not about lines melting or the grid collapsing.  That discussion is for another time.

44 of WV's 55 counties were designated as falling within NIETC in the eastern part of the US, basically all but the most southern counties.  The NIETC designation was designed to allow the Federal Energy Regulatory Commission to step in and impose federal eminent domain power to seize land for power lines if state regulatory agencies, much closer to pressure from citizens and land owners (remember them?), either refused or failed to act on an application for approval.

The law said that a state PSC must act on a proposed line within one year to rule on a line or FERC could step in.  FERC interpreted the law to also mean that if a state PSC considered a certificate of need and turned it down, FERC could step in and force the construction of the line.

In Loudoun County, Virginia there is a wonderful organization called the Piedmont Environmental Council.  They are involved in a wide range of issues including the preservation of farmland and the promotion of farmers markets, but they also were major players in the TrAIL line case in VA.  They are also one of the leading groups in the VA section of the PATH line, which also goes through Loudoun County.

In 2008, the PEC took FERC to the US Fourth Circuit over its interpretation of the 2005 NIETC law.  In February 2009, the Fourth Circuit ruled that NIETC applies if a state agency fails to take any action in a power line case, but that if a state PSC affirmatively rules against a power line, there is nothing FERC can do to overturn that decision.

This decision was a major victory.  While I think this argument is wrong, because I think state politicians and PSCs should stand up for their citizens against federal tyranny, there was an argument that if FERC could take over a project anyway, a state PSC should approve a power line, just so they could remain in the process.  If they denied a power line and FERC stepped in, then the state would be completely out of the picture.  In fact, in 2006, you can find this letter on The Power Line, Gov. Manchin wrote a letter to the Secretary of the Dept. of Energy, encouraging FERC to take over the TrAIL and PATH projects to force them through.  Read this letter.  It puts all Manchin's more recent claims about how he is "neutral" on the power lines into a much clearer perspective.

In any case, for the time being, in the Fourth Circuit, if a state PSC turns down PATH, that's it.  FERC cannot force the issue.  AEP CEO Mike Morris wants the Fourth Circuit opinion overturned by the new energy bill in the Congress now.  Morris said last Friday that he is confident that Sen. Bingaman's Senate bill will "fix," in his words, the House Waxman Markey bill that has extended the Fourth Circuit to the whole eastern US.

The apparent problem in the MD case is that no one really knows what the 2005 law meant when it said that FERC could step in after one year if a PSC failed to act.  Does "to act" mean just accepting an application for consideration or does it mean actually rendering a decision?  No one really knows.  So the MD PSC is apparently worried that if they force the power companies to reapply in MD, FERC would claim that their clock started ticking in May 2009.  If the process had to start all over again, it is unlikely that MD's PSC could render a decision by May 2010.  So they are afraid that FERC would consider that the PSC was stalling and assert their control at that point.

I personally think this is not a big concern.  WV statute requires that the WV PSC render a decision in 400 days, well more than a year.  The WV PSC even extended this deadline in the TrAIL case, and FERC didn't make a peep.  I think the concerns in MD are just being stirred up by the power companies to pressure the PSC.

Sorry for the long explanation, but this stuff is very complicated.  But it can be understood, and it is important that we understand it.

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by: Calhouner @ Tue Aug 04, 2009 at 11:47:13 AM UTC

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thanks, that is really helpful (0.00 / 0)

There's nothing wrong with long explanations that accurately depict complex issues. :-) The power companies are counting on no one being able to give one, and no one else being able to understand one.

So, the big picture is: the power companies are trying to use the threat of a deadline and the threat of federal intervention as reasons for state regulatory "rubber-stamping" of their applications.

Meanwhile, for states in the 4th circuit any single state involved actually does have the power to kill the entire project (or, for states in the middle, require it to be rerouted around that state, effectively killing it).

Depending on what happens in the Fall climate change bill, (a) state's rights may be expanded to all states East of the Mississippi, (b) the status quo may remain (e.g., just the 4th circuit states retain the right), or (c) FERC may get more power to intervene everywhere.

Of course, other circuits and/or the supreme court could always weight in on the issue, too, but that's not on the immediate horizon.

Is that about right?

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by: Clem Guttata @ Tue Aug 04, 2009 at 12:36:38 PM UTC

[ Parent ]

Good summary. (4.00 / 1)

It is still unknown whether FERC will appeal the 4th Circuit decision any higher.  That is the only change in the situation you describe.

Comments by AEP CEO in his conference call last Friday indicate that AEP's lobbyists are working hard in the Senate to get Cheney's NIETC rules put in place for the eastern US.

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by: Calhouner @ Tue Aug 04, 2009 at 14:00:46 PM UTC

[ Parent ]

Strategy - not strategery! (4.00 / 1)

And all of this illustrates why it's important to both fight PATH - our personal "ground battle" - and think strategically about the big picture of national energy policy. If the PSC rules against us on PATH and gives the go-ahead, that might not be the final word if it's contrary to a new federal energy policy (please note the conditional term "might").

Thanks for a great answer, Calhouner, and insightful questions, Clem!

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by: blonde moment @ Tue Aug 04, 2009 at 14:35:52 PM UTC

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