The location and permitting of facilities used to transmit electricity to residential and commercial customers have been the province of the states (with limited exceptions) for virtually the entire history of the electricity industry. State and local governments are well positioned to weigh the local factors that go into siting decisions, including environmental and scenery concerns, zoning issues, development plans, and safety concerns. Because the grid formerly consisted of many localized transmission and distribution networks, federal interest in siting of the transmission system was limited. Although the federal government has increasingly exercised its authority over transmission reliability, it has, for the most part, left transmission siting decisions to states. However, as concerns over grid congestion and its impact on reliability have grown, the federal government has carved out a role in transmission siting as a "backstop" siting authority in designated transmission corridors. Although this new role has met some resistance from those who oppose expanding federal authority over siting, other policymakers and commentators have advocated an increased federal role in order to encourage development of renewable energy, which is often located in remote areas that are not easily connected with the interstate grid. The courts have also thwarted the federal government's efforts to create transmission corridors. In 2011, the Ninth Circuit vacated the Department of Energy's congestion study underlying the designation of national interest electric transmission corridors, and as a result, there are presently no such corridors in effect. Moreover, the Fourth Circuit reversed FERC's interpretation of its siting authority with respect to electric transmission facility applications that have been rejected by a state agency. The increased federal role in transmission siting decisions raises a number of legal and policy issues. Foremost among these are the concerns over loss of local and regional input and control that often accompany an expansion of federal power into a process traditionally reserved for the states. Indeed, the Federal Power Act specifically reserves certain aspects of governance over the electricity industry to the states, and efforts to expand the federal role in the past have met with resistance from state public utility commissions and advocates of federalism. This report provides a review of the history of transmission siting; a summary and analysis federal authority to designate transmission corridors and provide backstop siting authority for transmission facilities in those corridors; a discussion of the legal issues associated with this expansion of federal authority and any future expansions of federal transmission siting authority; and a look at recent developments concerning transmission siting on federal lands. In order to understand the issues that arise from federal involvement in electricity transmission siting decisions, it is necessary to briefly review the history of the power industry and the development of the transmission grid. Transmission lines connect power generation facilities to distribution systems that make final delivery of electricity to commercial and residential customers. For most of the 20 th century, these lines were generally constructed and operated by "vertically integrated" electric utilities; that is, state-authorized and state-regulated monopolies that owned power generation plants, transmission facilities, and local distribution systems, and ultimately sold electricity to retail customers. While these transmission lines were almost exclusively intrastate in nature at first, the transmission system expanded rapidly to include interstate transmission lines. The Federal Power Act (FPA), first enacted in 1920 as the Federal Water Power Act and amended to include interstate electricity transmission in 1935, granted the Federal Power Commission jurisdiction over wholesale electric power transactions and the interstate transmission of electric power. The states, for the most part, retained jurisdiction over the siting of generation and transmission facilities as well as the pricing of most retail electric power transactions. Over the next several decades, this mostly local electric power system began to interconnect into larger regional grids. Interconnections were motivated by the reliability benefits of connecting a utility to its neighbors, opportunities for power sales, and joint ownership of increasingly large and expensive power plants. The development of higher voltage transmission lines—which made it possible to transmit electricity long distances with relatively small losses—also spurred interconnection. Throughout this expansion, the states continued to be the sole authority for most decisions about where to site electric power transmission facilities. Federal transmission systems, such as the Tennessee Valley Authority and some municipal and cooperative utility systems, were able to site transmission lines independent of state authority. However, the vast majority of transmission facilities were constructed by investor-owned utilities under state jurisdiction. Difficulty in constructing new transmission led Congress to include federal transmission siting authority as part of the Energy Policy Act of 2005 (EPAct). One section of EPAct authorized the Department of Energy (DOE) to designate "National Interest Electric Transmission Corridors" based on DOE's findings after conducting a study of congestion as directed by EPAct. EPAct authorized FERC to permit the construction and operation of electricity transmission facilities within the boundaries of the National Interest Electric Transmission Corridors. This authority may not be exercised by FERC unless the state where the facility would be sited lacks the authority to issue the permit, the applicant does not qualify for the permit in the state, or the state has "withheld approval" of the permit for more than one year. The federal transmission siting authority created in EPAct is a "backstop" authority that is exercised only if the state cannot authorize the facility or if it has "withheld approval." This authority, which is discussed in detail infra , was adopted after the blackouts in August of 2003 that interrupted service, in some cases for days, to many customers across the northeastern United States and in Canada. EPAct directed the Secretary of Energy to designate the corridors only in areas in which it finds "electric energy transmission capacity constraints or congestion that adversely affects consumers." In addition, FERC was authorized to permit transmission facilities only upon a finding that the proposed construction or modifications would "significantly reduce transmission congestion in interstate commerce and protects or benefits consumers." Recent events, however, have led some legislators and commentators to push to expand the federal role in transmission siting. Some have advocated an expanded federal role as a means to encourage development of green energy technology. Others have suggested that a recent ruling by the U.S. Court of Appeals for the Fourth Circuit interpreting the transmission siting section of EPAct has limited federal siting authority too severely, and that legislation is needed to expand FERC's siting authority to guard against future congestion problems. These concerns, and some of the proposals that address them, are explored further below. Congressional authority for legislation affecting the transmission of electric power, including the siting of transmission facilities, would likely be dependent upon Congress's constitutional authority to "regulate commerce ... among the several states." This constitutional authority to legislate pursuant to the power to regulate interstate commerce has expanded significantly in the last 75 years. The plain meaning of this language might indicate a limited power to regulate commercial trade between persons in one state and persons outside of that state. During the early 1900s, the Supreme Court was confronted with statutes which went beyond regulation of trade and addressed other related economic activities. At that time, the Court struck down a series of federal statutes which attempted to extend commerce regulation to activities such as "production," "manufacturing," or "mining." Starting in 1937, however, with the decision in NLRB v. Jones & Laughlin Steel Corporation , the Supreme Court held that Congress has the ability to protect interstate commerce from burdens and obstructions which "affect" commercial transactions. Subsequent Supreme Court decisions found that Congress had considerable discretion in regulating activities which "affect" interstate commerce, as long as the legislation was "reasonably" related to achieving its goals of regulating interstate commerce. Thus the Court found that in some cases, events of purely local commerce (such as local working conditions) might, because of market forces, negatively affect interstate commerce, and thus would be susceptible to federal regulation. The Court has also held that an activity which in itself does not affect interstate commerce could be regulated if all such activities taken together did affect interstate commerce. In the 1995 case of United States v. Lopez , however, the Supreme Court identified three categories of laws which are authorized by the Commerce Clause: (1) laws which regulate channels of commerce; (2) laws which regulate instrumentalities of commerce; and (3) laws which regulate economic activities which affect commerce. Within the third category of activities which affect commerce, the Lopez Court determined that the power to regulate commerce applies to intrastate activities only when they "substantially" affect commerce. Given the Court's broad application of these three acceptable categories of legislation, it seems likely that congressional action expanding the federal role in siting of electric transmission facilities would be found to fall into at least one of the categories. Although an argument can be made that the contemplated legislation could fall under any of the three categories, it seems particularly likely that legislation impacting the interstate electricity grid could be considered to be affecting an "instrumentality" of interstate commerce. The interstate electricity grid has characteristics similar to other interstate systems previously found to be instrumentalities of commerce, such as the railroads, the mail delivery, or the telephone network. In order to rely upon this prong of the "interstate commerce" test, there likely would need to be a demonstration that the legislation in question is intended to provide for the safety, efficiency, and accessibility of the electricity grid. Such a demonstration seems plausible with respect to legislation that could enhance the reliability of electricity service by easing the regulatory path to obtaining a permit for construction of transmission facilities. Also, the broadest of the three categories, legislation "affecting" interstate commerce, may be applicable to legislation. As noted supra , even local activity can be legislated under this category if the legislation "exerts a substantial economic effect on interstate commerce." There is an argument that the ability to site electric power transmission facilities in accordance with national interest and with less pressure from local interests would exert such a substantial economic effect on interstate commerce. Such an argument would likely be bolstered by any information that may be available about the aggregate effect of transmission siting denials by state regulatory agencies on the reliability and efficiency of the interstate grid.