Supporters of the national interest in siting transmission lines prevailed–by a strong 16-7 vote–in fighting off a killer amendment by Sen. Robert Menendez (D-N.J.) that would have–as The Energy Daily reports this morning–”gutted the bill by taking away FERC’s ability to override states that objected to interstate lines.” 

http://www.theenergydaily.com/publications/ed/Senators-Rein-In-Broad-Grid-Cost-Allocation_2436.html

Senate Energy Committee Chairman Jeff Bingaman aptly characterized a vote for the Menendez amendment as a vote to “effectively neutralize the entire title.”

We’ve already seen this movie.  In 2005, the same debate over FERC authority led to a mushy compromise authorizing FERC backstop siting authority only when states failed to act.  This title of the Senate bill is designed to strengthen that concept to ensure that the national interest in a strong transmission grid is not held hostage to state-based NIMBYism. 

Unfortunately, the bad news is that Chairman Bingaman and his allies could muster only nine votes against, in the face of 13 votes for, an amendment by Senator Bob Corker (R-TN) that puts a high burden on cost allocation.  Senator Corker’s amendment limits FERC’s authority to spread costs “unless the costs are reasonably proportionate to measurable economic and reliability benefits.”

While that language sounds reasonable, energy security champion Senator Byron Dorgan (D-ND) argued forcefully that the amendment would burden FERC with huge and complex cost-benefit analyses, and that the requirement would hamstring FERC’s ability to spur the development of new long-haul power lines.  Chairman Bingaman agreed, and many observers believe the language will serve as prime litigation bait for any entity who wants to kill a proposed project by blocking cost allocation.

Maybe that analysis is wrong, and, as proponents of the amendment pointed out, the language will only ensure that transmission projects with broad allocation truly do serve the national interest.  Or maybe this year, all we’ll get on the road to stronger energy reliability is a baby-step forward from the authority FERC was granted four years ago.  That’s usually the way Congress works, unless there’s a crisis (in which case it tends to overreact, and to do so quickly).  Here’s hoping the full Senate gets a chance to restore the original language soon.