The Department of Energy has released its final guidelines for the designation of National Interest Electric Transmission Corridors (NIETCs), which are narrowly defined areas where transmission is urgently needed to ensure power reliability and affordability and to advance “important national interests.”

DOE was authorized to designate such corridors in a “nonbinding process” through the Infrastructure Investment and Jobs Act, according to the guidelines issued Dec. 19.

As defined in the guidelines, a NIETC is “a geographic area where … DOE has identified present or expected transmission capacity constraints or congestion that adversely affects consumers. … One or more transmission projects could be located within that geographic area to alleviate such constraints or congestion.”

NIETC designation “unlocks” federal money and permitting tools to accelerate transmission construction, such as programs that allow DOE to sign on as an anchor off-taker for transmission projects, and direct loans made available by the Inflation Reduction Act.

DOE announced its first proposed off-taker agreements in October, with up to $1.7 billion invested in three interstate transmission projects. (See DOE to Sign up as Off-taker for 3 Transmission Projects.)

The IIJA also authorized FERC to issue permits for transmission projects within a NIETC if a state lacks authority to issue a permit, has delayed action on a permit application for more than a year or has denied the application.

The guidelines lay out a four-step process for NIETC designation: information collection on potential NIETCs; the publication of a preliminary list of proposed NIETCs; completion of environmental or other reviews, “robust public engagement” and the release of draft NIETC designation reports; and one or more final NIETC designation reports with related environmental documents.

“Improving and expanding national transmission infrastructure is essential to not only meeting President Biden’s clean energy goals, but also to ensuring that people across the country have access to resilient, affordable power,” Maria Robinson, director of DOE’s Grid Deployment Office, said in a DOE press release.

“Consumers are frequently harmed from a lack of transmission infrastructure, which can directly contribute to higher electricity prices, more frequent power outages from extreme weather and longer outages as the grid struggles to come back online,” according to the press release. “While these needs are urgent, building and expanding transmission often requires several years of permitting, siting and regulatory processes, especially if the line extends through multiple states and regions.”

‘Any Interested Party’

DOE was first authorized to designate transmission corridors in the Federal Power Act of 2005, according to a report from the department’s Electricity Advisory Committee. The law also allowed FERC “backstop” permitting authority — that is, allowing the commission to issue a permit even if a state was opposed to a project. Those provisions were ruled unconstitutional because they did not provide clear enough definitions of what conditions would trigger the backstop authority.

The IIJA amended the 2005 law to provide more clarity on DOE’s ability to designate the renamed NIETCs and FERC’s ability to permit interstate or interregional transmission.

The final guidelines incorporate feedback DOE received in the 112 comments it received following the Notice of Intent and Request for Information on the NIETC designation process, which it issued in May. For example, state officials, RTOs and advocacy groups were concerned that transmission developers might have too much influence in the NIETC designation process. (See States, RTOs Caution DOE on Transmission Corridors.)

The guidelines acknowledge this feedback and open eligibility to provide information and suggest corridors to “any interested party.”

“DOE does not prioritize NIETC designation based on which interested party submits information and recommendations. … As commenters suggest, opening eligibility may spur collaborative transmission development among traditional developers, load-serving entities (including public power entities and Indian tribes), states and local governments, and others.”

Robinson similarly stressed that DOE has pursued “meaningful, collaborative and widespread stakeholder engagement into our NIETC designation process to make sure we can clearly identify the areas that are the nation’s highest priorities for transmission and bring critical infrastructure there first.”

The release of the 66-page guidelines will kick off a comment period that will run through Feb. 2. DOE is targeting spring 2024 for a preliminary list of potential NIETCs.

NIETC vs. Transmission Planning

In evaluating potential NIETCs, the guidelines state that DOE’s National Transmission Needs Study, also released in October, will be a primary, but not the only, source of information for corridor designation.

The triennial report provided a breakdown of regional and interregional transmission needs, pointing to the higher electricity prices and reliability concerns grid congestion and constraints can have on consumers. From 2019 to 2020, the guidelines say, “congestion on interfaces across all [Western non-RTO/ISO] markets (day-ahead, 15-minute and 5-minute) increased by 74% from $152 million in 2019 to $263 million in 2020, primarily due to increased congestion.”

Looking ahead, the guidelines predict the effects of inadequate transmission will intensify. Massive growth in interregional transfer capacity may be needed, such as a 255% increase between New England and New York.

The guidelines’ summary of Needs Study suggests all regions may benefit from NIETCs. But, again noting stakeholder input, the guidelines stress the NIETC process isn’t intended to disrupt or supplant, but to complement existing transmission planning.

“In particular, DOE can use the NIETC designation process to identify valuable areas for transmission development that these existing transmission planning processes may not be identifying,” the guidelines say. “Existing transmission planning processes are largely constrained by their focus on regional or local needs, whereas the NIETC designation process can examine interregional needs.”

DOE also will use a “threshold need determination” to help identify possible NIETCs, based on the current status and future expectations of congestion or lack of capacity that may affect consumers, the guidelines say. Only areas that pass that screening will continue in the designation process.

Advocates and industry analysts are still reviewing the guidelines, but they shared initial reactions with RTO Insider.

Rob Gramlich, president of Grid Strategies, a research and consulting firm, said he’s glad to see DOE moving ahead with the process, but cautioned “it is better for all parties involved for the process to focus on actual routes which the … process allows. If they are not using that, they will need to find another way to focus on meaningful, narrow corridors.”

Elise Caplan, vice president of regulatory affairs at the American Council on Renewable Energy (ACORE), said her organization “supports DOE’s preliminary finding that the greatest value for NIETC designation will be in geographic areas where DOE has found a need for increased interregional transfer capacity.”

“DOE also properly critiques the shortfalls in transmission planning and the absence of planning for larger-scale, regional and interregional transmission ‘that may address multiple transmission needs in a wider area more cost effectively than the piecemeal transmission expansion that dominates today,’” Caplan said. “ACORE supports the use of the NIETC designation process as one of many tools to address this shortcoming.”