[Federal Register Volume 69, Number 140 (Thursday, July 22, 2004)]
[Notices]
[Pages 43833-43834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-16724]


-----------------------------------------------------------------------

DEPARTMENT OF ENERGY


Designation of National Interest Electric Transmission 
Bottlenecks (NIETB)

AGENCY: Office of Electric Transmission and Distribution, Department of 
Energy.

ACTION: Notice of inquiry and opportunity to comment.

-----------------------------------------------------------------------

SUMMARY: The Department of Energy (DOE) seeks comments on issues 
relating to the identification, designation and possible mitigation of 
National Interest Electric Transmission Bottlenecks (NIETB). This 
inquiry is DOE's initial step in seeking to identify and designate 
NIETBs. By publicly identifying and designating NIETBs, DOE will help 
mitigate transmission bottlenecks that are a significant barrier to the 
efficient operation of regional electricity markets, threaten the safe 
and reliable operation of the electric system, and/or impair national 
security. DOE seeks comments on the questions posed below and welcomes 
other pertinent comments or proposals.

DATES: Written comments are to be filed electronically by e-mailing to: 
[email protected] no later than 5 p.m. e.d.t. September 
20, 2004. Comments can be filed at the address listed below.

ADDRESSES: Office of Electric Transmission and Distribution, TD-1, 
Attention: Transmission Bottleneck Comments, U.S. Department of Energy, 
Forrestal Building, Room 6H050, 1000 Independence Avenue, SW., 
Washington, DC 20585.
    Note that U.S. Postal Service mail sent to DOE continues to be 
delayed by several weeks due to security screening. Electronic 
submission is therefore encouraged.

FOR FURTHER INFORMATION CONTACT: Mr. David Meyer, Office of Electric 
Transmission and Distribution, TD-1, U.S. Department of Energy, 1000 
Independence Avenue, SW., Washington, DC 20585, (202) 586-1411, 
[email protected], or Lot Cooke, Office of General Counsel, GC-76, 
1000 Independence Avenue, SW., Washington, DC 20585, (202) 586-0503, 
[email protected].

SUPPLEMENTARY INFORMATION: The Nation's electric system includes over 
150,000 miles of interconnected high-voltage transmission lines that 
link generators to load centers. The electric system has been built by 
electric utilities over a period of 100 years, primarily to serve local 
customers. Until recent years, electricity trade among electric 
utilities was modest. With the advent of wholesale electricity markets, 
trade has increased exponentially, and utilities now shop for the 
lowest cost power from suppliers reachable through the transmission 
network. The increase in regional electricity trade saves electricity 
consumers billions of dollars, but it places significant additional 
loads on the transmission facilities over which this trade is 
conducted. Steady growth in demand for electricity also has contributed 
to the growth in demand for transmission service.
    While transmission service has become more important economically 
and operationally, investment in new transmission facilities has not 
kept pace. Over the past 25 years, investment in new transmission 
facilities has significantly declined. Today, bottlenecks in the 
transmission system impede economically efficient electricity 
transactions and potentially threaten the safe and reliable operation 
of the transmission system. DOE estimates that these bottlenecks cost 
consumers several billions of dollars per year by forcing wholesale 
electricity purchasers to buy from higher-cost suppliers. This estimate 
does not include the reliability costs associated with such 
bottlenecks.
    The National Energy Policy (May 2001), the Department's National 
Transmission Grid Study (May 2002), and the Transmission Grid Solutions 
Report (September 2002) issued by the Secretary's Electricity Advisory 
Board, recommend that the Department initiate a process to determine 
how to identify and designate transmission bottlenecks of national 
interest, as a first step toward mitigation of them.
    Specifically, the Grid Study states:

    Transmission bottlenecks affect national interests by increasing 
the cost of electricity to consumers and the risk of transmission 
system reliability problems in various regions throughout the United 
States. Relieving transmission bottlenecks is a regional issue. DOE 
will work in partnership with FERC, States, regions, and local 
communities to designate significant bottlenecks and take actions to 
ensure that they are addressed.

    The report of the Electricity Advisory Board states:

    We would urge the Secretary to develop the criteria and process 
for determining which existing bottlenecks should qualify for 
special status as ``National Interest Transmission Bottlenecks'' 
because the bottlenecks affect the reliability and security of the 
nation's electric grid. The DOE must work with State, regional and 
local government officials to encourage proposals from industry 
participants and to monitor progress toward elimination of 
designated bottlenecks.

    The Electricity Advisory Board goes on to recommend that to be 
designated

[[Page 43834]]

a National Interest Transmission Bottleneck the bottleneck must meet 
one of three criteria:
    1. The bottleneck jeopardizes national security;
    2. The bottleneck creates a risk of widespread grid reliability 
problems or the likelihood that major customer load centers will be 
without adequate electricity supplies; or
     3. The bottleneck creates the risk of significant consumer cost 
increases in electricity markets that could have serious consequences 
on the national or a broad regional economy or risks significant 
consumer cost increases over an area or region.
    We note that Title XII of H.R.6, as reported by a joint U.S. 
Senate-House of Representatives Conference Committee, as well as Title 
XII of S. 2095, the comprehensive energy legislation now before the 
U.S. Congress, contain provisions that would require the Secretary of 
Energy, within one year after enactment into law, and every three years 
thereafter, to designate ``National Interest Transmission Corridors.''
    The legislation would also give certain Federal ``backstop'' siting 
authority to the Federal Energy Regulatory Commission for facilities to 
be located within DOE-designated National Interest Transmission 
Corridors.
    This Notice of Inquiry does not ask for comment on any of the 
National Interest Transmission Corridor and related provisions of 
pending energy legislation. Should those provisions be enacted into 
law, the Department will issue such notices and take other actions as 
may be authorized or directed by those provisions.
    The Department has completed some preliminary scoping studies to 
support DOE identification of NIETBs. These include a survey of 
existing models and tools that could support bottleneck assessment by 
DOE and a survey of bottlenecks reported by regional transmission 
operators or independent system operators. These studies are available 
at: http://www.electricity.doe.gov/bottlenecks.
    Additionally, DOE organized a workshop on July 14, 2004, in Salt 
Lake City, Utah, immediately following the National Association of 
Regulatory Utility Commissioners (NARUC) Summer Meeting. The purpose of 
this workshop was to learn from stakeholders what they believe to be 
the major issues associated with the designation of NIETBs, and how 
they believe the process should be designed to maximize its benefits to 
the users of the grid and to electricity consumers. For proceedings 
from the workshop, please go to http://www.electricity.doe.gov/bottlenecks.
    To assist DOE in developing a procedure for identifying, 
designating, and addressing NIETBs, we request comments on the three 
criteria for designation described above, and the following questions:
    1. Are the Electricity Advisory Board's recommended criteria for 
designation of National Interest Electric Transmission Bottlenecks 
appropriate and sufficient? If not, what should they be? For example, 
should DOE also consider disaster recovery, economic development, and 
the enhancement of the ability to deal with market and system 
contingencies in designating NIETBs?
    2. What should be the role of transmission grid operators, 
utilities, other market participants, regional entities, States, 
Federal agencies, Native American tribes and others in the process of 
identifying, designating, and addressing NIETBs? For example, should a 
NIETB be designated only if some entity applies to DOE for designation? 
Should DOE accept applications only from entities from regions that 
have an extant regional transmission (or resource) plan? Should DOE be 
able to designate a NIETB even if no entity asks DOE to do so?
    3. How might DOE identify bottlenecks in regions where much 
pertinent data are not available, in contrast to regions where 
transmission expansion plans have been developed and made public?
    4. What actions should DOE undertake to facilitate and monitor 
progress towards mitigation of designated NIETBs?
    In addition to the above, commenters are encouraged to discuss, 
comment on, and make suggestions on other transmission bottleneck 
issues that may be relevant to the development of procedures to 
designate and address NIETBs. To the greatest extent consistent with 
law, comments submitted pursuant to this Notice of Inquiry will be 
deemed public and will not be treated as confidential.

    Issued in Washington, DC, on July 16, 2004.
James W. Glotfelty,
Director, Office of Electric Transmission and Distribution.
[FR Doc. 04-16724 Filed 7-21-04; 8:45 am]
BILLING CODE 6450-01-P