USA Law and Practice Contributed by: David P. Flynn, Lindsey E. Haubenreich, Thomas F. Puchner and Dennis W. Elsenbeck, Phillips Lytle LLP
4.5 Monopoly Rights to Provide Transmission Services
dition its approval on certain modifications or considerations that will make the proposed pro- ject compliant with the relevant safety, environ- mental, engineering and zoning standards. 4.4 Eminent Domain, Condemnation and Expropriation Rights to Construct and Operate Transmission Lines and Associated Facilities A CPCN (or its equivalent) issued by a state public utility commission may include eminent domain rights to the transmission facility devel- oper under terms and conditions specific to that state. To act on their eminent domain authority, the developer must provide the landowner with just compensation, based on the fair market value of the property being condemned, on the date that the eminent domain is exercised. On the federal level, if a facility project is grant- ed a permit by FERC or the DOE, the transmis- sion facility developer will have eminent domain authority (16 USC Section 824p). The eminent domain authority can only be used for the per- mitted facilities. The developer should refer the landowner to the relevant state agency or state Attorney General, and should explain to the landowner that they have the right to acquire the property, or prop- erty rights, by eminent domain under FPA Sec- tion 216 (e). When a developer exercises eminent domain under FPA Section 216 (e), a condemnation pro- ceeding in federal court must conform as nearly as practicable to the practice and procedure of condemnation proceedings in the courts of the state in which the property is located (FERC Order No 689, Sections 225–227).
Under federal law, transmission entities do not have monopoly rights to provide transmission service within a specific geographic area. While transmission lines were historically owned by pri- vate, vertically integrated entities, FERC required transmission services to be unbundled and pro- vided pursuant to each utility’s FERC-approved OATT, which sets forth the terms and conditions of using the transmission system (FERC Order Nos 888, 889 and 890). In 2011, FERC Order No 1000 built upon Order 890 to increase transmission development by requiring public utility transmission providers to participate in a regional transmission planning process to generate regional transmission plans. While federal law does not provide for monopoly transmission rights, state law and utility commis- sion regulation may provide for such rights under terms and conditions that will vary by state. 4.6 Transmission Charges and Terms of Service Laws Governing Transmission Charges Pursuant to the FPA, FERC has exclusive juris- diction over: • the transmission of electrical energy in inter- state commerce; • the sale of electrical energy at wholesale in interstate commerce; and • all facilities for such transmission or sale of electrical energy. This jurisdiction is conferred by Section 201 of the FPA, and the principal laws of such jurisdic- tion are codified at 16 USC Section 824, 824 (d) and 824 (e). Utilities providing transmission service subject to FERC’s jurisdiction must abide
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