Policymaker Summaries are based on recent academic literature that explores energy policy, states, and the U.S. Constitution. They are written by the Harvard Environmental Policy Initiative in collaboration with the professors who produced the underlying scholarship. The content of these Summaries reflects the views of the professors and not necessarily those of the Harvard Environmental Policy Initiative or Harvard University.

Policymaker Summaries:

• Net Metering and Federal/State Jurisdiction
• Addressing the Regulatory Holdout Problem in the Siting of Interstate Transmission Lines

Net Metering and Federal/State Jurisdiction

This Policymaker Summary argues that FERC has authority to enable and facilitate the participation of retail customer resources, such as rooftop solar, in wholesale markets. Any FERC regulation of retail customer energy resources would operate alongside state programs, and would not uniformly preempt state policies. It is based on a paper written by Jim Rossi, which will be published in The Electricity Journal.

FERC has consistently rejected opportunities to regulate net metering, holding that energy flowing from a customer to the distribution grid is not a wholesale sale subject to its jurisdiction. Nonetheless, as it did in its demand response regulations, upheld by the U.S. Supreme Court in 2016, FERC could enable retail customer resources to participate in wholesale energy markets, using its authority to craft market-wide policies that enhance competition. FERC’s overlapping jurisdiction with states over compensation for retail customer resources does not require a single uniform approach to participation of retail customer resources or the elimination of state and utility programs.

Addressing the Regulatory Holdout Problem in the Siting of Interstate Transmission Lines

This Policymaker Summary recommends ways states can ensure that statutes and regulatory practices governing approval and eminent domain authorization for transmission lines facilitate regional cooperation and avoid dormant Commerce Clause violations. It is based on a paper written by Alexandra B. Klass and Jim Rossi entitled Revitalizing Dormant Commerce Clause Review for Interstate Coordination, which will be published in the Minnesota Law Review.

Public utility and property laws that govern the electric transmission line siting and construction process are often aimed at protecting in-state interests. While these laws address many valid local concerns, they can be overly broad or applied in a manner that inhibits approval and siting of interstate transmission lines that produce regional benefits.

To facilitate better regional coordination and to avoid dormant Commerce Clause violations:
1) siting laws and procedures should allow out-of-state transmission line companies to apply for siting certificates and eminent domain authority and otherwise participate in proceedings about transmission on the same or terms as incumbent in-state utilities;

2) siting proceedings should allow or require regulators to account for the regional benefits of new transmission line projects, in addition to benefits to native load customers; and

3) laws providing eminent domain authority should allow projects that provide regional benefits to qualify.