This is the second article in Womble Bond Dickinson’s Energy & Natural Resources thought leadership series titled “Powering the Future: Legal Challenges in Grid Modernization and Transmission". This series explores the factors driving the evolution of the grid and legal implications that will help shape the pace of change. From transmission expansion and interconnection reforms to environmental compliance and financing structures, the legal landscape will determine how quickly and effectively we can build the grid of tomorrow.
The aging U.S. transmission grid is being asked to do more: integrate large volumes of renewable generation, serve rapidly growing demand, and maintain reliability amid more frequent extreme weather and outage risks. Modernizing and expanding long-distance transmission is essential to moving power efficiently across regions and meeting these system needs.
Demand growth is being accelerated by electrification and by large, energy-intensive facilities like data centers and hyperscalers, which can require gigawatt-scale service and are often sited far from existing high-capacity infrastructure. These trends stress an already constrained grid and increase the urgency for new and upgraded transmission.
Transmission expansion, however, is as much a land-use and governance challenge as an engineering one. Securing rights-of-way requires complex permitting, sustained engagement with communities, and managing property impacts, environmental disruption, and eminent domain. The challenge is how to accelerate transmission buildout while recognizing local authority and protecting property rights? This article examines the evolving legal landscape and strategies for balancing national needs with local interests.
Congress created a narrow federal role in interstate electric transmission siting in the Energy Policy Act of 2005 by adding Section 216 to the Federal Power Act.
Although states remain the primary gatekeepers for transmission siting, federal law sets a framework that can influence what projects move forward, the circumstances under which federal involvement may occur, and the obligations developers owe to stakeholders.]
Congress created a narrow federal role in interstate electric transmission siting in the Energy Policy Act of 2005 by adding Section 216 to the Federal Power Act (FPA). Section 216 contemplates a two-step structure: (i) the U.S. Department of Energy (DOE) designates “National Interest Electric Transmission Corridors” (NIETCs), and (ii) in specified circumstances, the Federal Energy Regulatory Commission (FERC) may issue a permit for eligible facilities in an NIETC—potentially accompanied by federal eminent domain authority for necessary rights-of-way.
In practice, Section 216 was seldom usable. Two appellate decisions undercut its framework: in Piedmont Environmental Council v. FERC (2009), the Fourth Circuit construed the statute to preserve a state “veto” by limiting FERC’s ability to act following an affirmative state denial; and in California Wilderness Coalition v. DOE (2011), the Ninth Circuit vacated DOE’s initial NIETC designations on procedural grounds. Following those decisions, DOE made no further NIETC designations, and FERC received no Section 216 permit applications.
A key structural point for project sponsors is what the rule did not do: although FERC’s NOPR proposed concurrent federal pre-filing alongside state proceedings, the final rule retained a state-first sequencing.
The Infrastructure Investment and Jobs Act (IIJA) (2021) materially revised Section 216 to make the backstop authority more functional. Among other changes, the IIJA clarified that a state denial can be a trigger for FERC jurisdiction (alongside delay and certain conditional approvals), resolving the interpretive issue at the center of Piedmont. The IIJA also added a landowner-facing precondition tied to eminent domain: before a permit holder may rely on Section 216 eminent domain authority, FERC must determine that the applicant made “good faith efforts” to engage with stakeholders.
FERC’s Order No. 1977 (May 13, 2024) is the principal rulemaking that aligns FERC’s Part 50 siting regulations with the IIJA, including applicant engagement, stakeholder participation, and updated informational requirements. A key structural point for project sponsors is what the rule did not do: although FERC’s NOPR proposed concurrent federal pre-filing alongside state proceedings, the final rule retained a state-first sequencing. Applicants generally must proceed through the relevant state process first; for “state delay” cases, the applicant must wait at least one year after beginning the state application process before commencing FERC’s mandatory pre-filing.
Order No. 1977 also operationalizes the IIJA’s “good faith efforts” requirement through a voluntary Applicant Code of Conduct and related documentation expectations, and it requires more structured stakeholder engagement planning (including Public Engagement Plans and Tribal Engagement Plans). On October 17, 2024, FERC issued Order No. 1977‑A on rehearing, adding requirements for projects that would require right-of-way authorizations on certain Tribal lands and clarifying that the rule does not infringe Tribal sovereignty.
...if the availability of a federal “off-ramp” becomes credible, it may change negotiating dynamics in state proceedings.
Because an NIETC designation is a prerequisite to Section 216 permitting, DOE’s corridor process is the gateway for meaningful use of the backstop authority. DOE issued final guidance in December 2023 and released a preliminary NIETC list in May 2024. DOE since narrowed that list to three potential corridors and initiated Phase 3 (public and governmental engagement) “should DOE designate” any corridor. DOE has still not completed any NIETC designations, meaning FERC’s backstop siting authority is not yet in effect for lack of a designated corridor.
For many project sponsors, the effect of these developments may be strategic: if the availability of a federal “off-ramp” becomes credible, it may change negotiating dynamics in state proceedings. Whether that translates into routine FERC-issued permits will depend on (i) DOE’s willingness and ability to finalize corridor designations that withstand challenge, and (ii) whether early cases demonstrate that the federal pathway can function as a viable alternative to delayed or denied state processes.
Motivated by the need for substantial national infrastructure development and recognition that NEPA compliance and related litigation often delay or prevent such development, in December 2025 the House passed the Standardizing Permitting and Expediting Economic Development (SPEED) Act (H.R. 4776). If the SPEED Act survives current political challenges and becomes law, it could benefit new transmission development by streamlining federal agencies’ NEPA procedures and substantially revising NEPA litigation through a combination of judicial deference to agency decisions and limits on judicial remedies and timelines.
To meet increasing infrastructure needs, several states are undergoing initiatives aimed at streamlining transmission siting.
Transmission siting and permitting is largely left to state authority, and states exercise this power in myriad ways. Some states have siting boards, many rely on state utility commissions, others punt much of the siting decisions to local governments. Often, multiple governmental agencies have a role in the process, creating layered approvals and potential for long lead times. To meet increasing infrastructure needs, several states are undergoing initiatives aimed at streamlining transmission siting.
Minnesota and Colorado recently passed laws easing restraints on the co-location of high-voltage transmission in highway rights-of-way. In 2024, New York passed the Renewable Action through Project Interconnection and Deployment (“RAPID”) act to consolidate and expedite environmental review and permitting of major renewable energy facilities and transmission facilities, in part by transferring responsibilities to its department of public service. Local jurisdictions are also taking action. Loudoun County, Virginia, a data center hot spot, is updating its Comprehensive Plan to identify preferred locations for the development of future transmission lines and review policies to better support co-location of new and existing lines.
Some states are also addressing the immense investment transmission projects require. Last fall, California passed Senate Bill 254 which establishes a Transmission Infrastructure Accelerator to develop financing and development strategies for eligible clean energy transmission projects. The bill creates a fund to finance projects and deems such projects to be in the public interest and eligible for various forms of financial assistance, including bonds. Proponents argue that alternative financing models like these can reduce pressure on rates.
...the Joint Federal-State Task Force on Electric Transmission brought together federal and state regulators to focus on how to efficiently and fairly plan and pay for transmission system improvements.
While federal agencies and state governments use available tools consistent with their respective jurisdiction, they also recognize that transmission planning and development require coordinated efforts. From 2021 to 2024, the Joint Federal-State Task Force on Electric Transmission brought together federal and state regulators to focus on how to efficiently and fairly plan and pay for transmission system improvements. Over the course of eight public meetings, FERC Commissioners and representatives of ten state utility commissions tackled issues including regional and interregional transmission planning, identification of transmission benefits, cost allocation principles and methodologies, generator interconnection barriers, transmission development oversight, transmission system security, grid enhancing technologies, and transmission siting.
The Task Force provided a valuable forum for federal-state collaboration on key transmission issues and is generally credited with informing the analyses and decisions underlying FERC’s landmark May 2024 Order 1920, Building for the Future Through Electric Regional Transmission Planning and Cost Allocation, and the subsequent Orders 1920-A and 1920-B which provided enhanced roles for state regulators in transmission scenario planning and cost allocation agreements.
In March 2024, the Task Force transitioned into the ongoing Federal-State Current Issues Collaborative. The Collaborative is exploring a broad range of cross-jurisdictional electricity sector issues including affordability, natural gas-electric coordination, wholesale and retail markets, and resource adequacy, and is expected to focus on transmission consistent with the Trump Administration’s emphasis on streamlining infrastructure permitting and approval.
States across the country have also considered amendments to their eminent domain laws to protect the rights of landowners impacted by proposed transmission projects.
While utilities, independent transmission companies, and developers have a vested interest in cooperatively siting new transmission infrastructure and acquiring necessary rights-of-way, landowner concerns have led to legislation that can create new challenges for grid expansion.
At the federal level, the Protecting Our Land from Federal Overreach Act (H.R. 9527, S. 5042) was introduced in 2024 to eliminate the right of eminent domain to acquire rights-of-way for electric transmission facilities in NIETCs, prohibit using federal funds in the exercise of eminent domain for such facilities, and prohibit FERC from issuing construction permits for such facilities over State objections. The Act stalled in committee and would need to be reintroduced in the current Congress where its prospects are uncertain given the Administration’s emphasis on streamlining infrastructure permitting.
States across the country have also considered amendments to their eminent domain laws to protect the rights of landowners impacted by proposed transmission projects. For example, Michigan House Bill 2025-4526 would require a court in determining the public necessity for the condemnation find by clear and convincing evidence that a transmission company’s proposed route is more reasonable than other possible routes. Maryland Senate Bill 2026-630 authorizes an action to recover the diminished value of residential property located within 300 feet of other property acquired for the construction of a transmission line. Finally, while not related to eminent domain, multiple states considered or enacted legislation related to grid enhancing technologies to optimize existing transmission infrastructure and help minimize the need for new transmission rights-of-way.
With increased stakes, litigation over transmission projects continues to be a risk for infrastructure developers.
Some courts are stepping in to ensure local regulators do not obstruct regional projects. A federal appellate court recently found that the Supremacy Clause of the U.S. Constitution preempted state denial of siting for a transmission project already approved by a FERC-regulated regional transmission organization. In Transource Pennsylvania LLC v. Pennsylvania Public Utility Commission, PJM's selected project to relieve regional transmission congestion was denied state siting approval by the Pennsylvania utility commission. The court held it would “fatally undermine[]” FERC’s ability to fulfill its mandate “if state agencies could veto congestion-reducing projects based on a disagreement with the federal actors’ reasons for selecting or approving a project.”
Federal agencies may prioritize national energy security and interstate commerce considerations, while state regulators focus on ratepayer impacts and local economic development.
The transmission expansion imperative intersects with a complex web of legal, economic, and social challenges that shape how projects are conceived, approved, and implemented. While the technical aspects of grid modernization are well understood, the multi-layered regulatory structure governing development - especially in interstate circumstances- often prove formidable barriers to navigate. Transmission projects typically require approvals from federal agencies, state utility commissions, regional transmission organizations, local authorities, and tribal nations. This creates a regulatory environment where projects must navigate multiple sovereign entities with distinct legal frameworks, consultation requirements/powers, and decision-making processes.
This fragmented authority structure creates coordination challenges that extend project timelines and increase costs. Federal agencies may prioritize national energy security and interstate commerce considerations, while state regulators focus on ratepayer impacts and local economic development. Tribal nations may emphasize cultural preservation, environmental protection, and treaty obligations. Local governments often concentrate on property tax implications and community impacts. These different priorities can lead to conflicting requirements, duplicative processes, or approval conditions that are difficult to reconcile – especially in instances where such governing bodies differ on political opinions/goals.
In this environment, transmission developers who invest early in experienced legal and technical teams versed in navigating the complexities are far more likely to move projects forward successfully and avoid costly project delays.
