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Considerations for Transmission Congestion Study and Designation of National Interest Electric Transmission Corridors

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Office of Electricity Delivery and Energy Reliability (“OE”), Department of Energy.


Notice of inquiry requesting comment and providing notice of a technical conference.


The Department of Energy (the “Department”) seeks comment and information from the public concerning its plans for an electricity transmission congestion study and possible designation of National Interest Electric Transmission Corridors (“NIETCs”) in a report based on the study pursuant to section 1221(a) of the Energy Policy Act of 2005. Through this notice of inquiry, the Department invites comment on draft criteria for gauging the suitability of geographic areas as NIETCs and announces a public technical conference concerning the criteria for evaluation of candidate areas as NIETCs.


Written comments may be filed electronically in MS Word and PDF formats by e-mailing to: no later than 5 p.m. EDT March 6, 2006. Also, comments can be filed by mail at the address listed below. The technical conference will be held in Chicago on March 29, 2006. For further information, please visit the Department's Web site at​1221.


Written comments via mail should be submitted to:

Office of Electricity Delivery and Energy Reliability, OE-20, Attention: EPACT 1221 Comments, U.S. Department of Energy, Forestall Building, Room 6H-050, 1000 Independence Avenue, SW., Washington, DC 20585.


U.S. Postal Service mail sent to the Department continues to be delayed by several weeks due to security screening. Electronic submission is therefore encouraged. Copies of written comments received and other relevant documents and information may be reviewed at​1221.

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Ms. Poonum Agrawal, Office of Electricity Delivery and Energy Reliability, OE-20, U.S. Department of Energy, 1000 Independence Avenue, SW., Washington, DC 20585, (202) 586-1411,, or Lot Cooke, Office of the General Counsel, GC-76, 1000 Independence Avenue, SW., Washington, DC 20585, (202) 586-0503,

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I. Background

A. Overview

The Nation's electric system includes over 150,000 miles of interconnected high-voltage transmission lines that link generators to load centers.[1] The electric system has been built by electric utilities over a period of 100 years, primarily to serve local customers and support reliability; the system generally was not constructed with a primary emphasis on moving large amounts of power across multi-state regions.[2] Due to a doubling of electricity demand and generation over the past three decades and the advent of wholesale electricity markets, transfers of large amounts of electricity across the grid have increased significantly in recent years. The increase in regional electricity transfers saves electricity consumers billions of dollars,[3] but significantly increases transmission facility loading.

Investment in new transmission facilities has not kept pace with the increasing economic and operational importance of transmission service.[4] Today, congestion in the transmission system impedes economically efficient electricity transactions and in some cases threatens the system's safe and reliable operation.[5] The Department has estimated that this congestion costs consumers several billion dollars per year by forcing wholesale electricity purchasers to buy from higher-cost suppliers.[6] That estimate did not include the reliability costs associated with such bottlenecks.

The National Energy Policy (May 2001),[7] the Department's National Transmission Grid Study (May 2002),[8] and the Secretary of Energy's Electricity Advisory Board's Transmission Grid Solutions Report (September 2002),[9] recommended that the Department address regulatory obstacles in the planning and construction of electric transmission and distribution lines. In response to these recommendations, the Department held a “Workshop on Designation of National Interest Electric Transmission Bottlenecks” on July 14, 2004, in Salt Lake City, Utah. The Department also issued a Federal Register notice of inquiry on July 22, 2004.[10] The purpose of the workshop and the notice of inquiry was to learn stakeholders' views concerning transmission bottlenecks, identify how designation of such bottlenecks may benefit the users of the grid and electricity consumers, and recognize key bottlenecks. In its plans for implementation of subsection 1221(a), the Department notes that it has considered the comments received via the notice and the workshop.

B. Summary of Relevant Provisions From the Statute

On August 8, 2005, the President signed into law the Energy Policy Act of 2005, Public Law 109-58, (the “Act”). Title XII of the Act, entitled “The Electricity Modernization Act of 2005” includes provisions relating to the siting of interstate electric transmission facilities and promoting advanced power system technologies. Subsection 1221(a) of the Act amends the Federal Power Act (“FPA”) by adding a new section 216 which requires the Secretary of Energy (the “Secretary”) to conduct a nationwide study of electric transmission congestion (“congestion study”), and issue a report based on the study in which the Secretary may designate “any geographic area experiencing electric energy transmission capacity constraints or congestion that adversely affects Start Printed Page 5661consumers as a national interest electric transmission corridor.” [11]

Subsection (a) of new FPA section 216 requires the Secretary to conduct a study of “electric transmission congestion” within “[one] year after the date of enactment of [the Act] and every three years thereafter.” [12] Subsections 216(a)(1) and (a)(3) of the FPA require the Secretary to conduct each congestion study in consultation with affected states and any appropriate regional entity.[13] FPA subsection 216(a)(2) requires the Secretary “[a]fter considering alternatives and recommendations from interested parties,” to issue a report, based on the study, in which the Secretary may designate “any geographic area experiencing electric energy transmission capacity constraints or congestion that adversely affects consumers” as an NIETC.[14] In exercising the Secretary's authority to designate NIETCs, subsection 216(a)(4) states that the Secretary may consider, among other things, whether—

(A) The economic vitality and development of the corridor, or the end markets served by the corridor, may be constrained by lack of adequate or reasonably priced electricity;

(B)(i) The economic growth in the corridor, or the end markets served by the corridor, may be jeopardized by reliance on limited sources of energy; and

(ii) A diversification of supply is warranted;

(C) The energy independence of the United States would be served by the designation;

(D) The designation would be in the interest of national energy policy; and

(E) The designation would enhance national defense and homeland security.[15]

If the Secretary designates an area “experiencing electric energy transmission capacity constraints or congestion” as an NIETC, subsection 216(b) of the FPA authorizes the Federal Energy Regulatory Commission (“FERC”) to issue permits for the “construction and modification of electric transmission” in the NIETC, provided that FERC finds that certain conditions have been met.[16]

C. Key Terms: Geographic Areas, Needs, and Corridors

In its initial electric transmission congestion study pursuant to FPA section 216, the Department expects to present an inventory of geographic areas of the Eastern and Western Interconnects that have important existing or projected needs related to the electricity transmission infrastructure. Such needs may include relieving existing or emerging congestion, addressing existing or emerging reliability problems, enabling larger transfers of economically beneficial electricity to load centers, or enabling delivery of electricity from new generation capacity to distant load centers. The Department recognizes that in some cases it may be possible to address such needs through functional alternatives such as distributed generation, conventional generation sited close to load, and/or enhanced demand response capacity.

The Department expects to identify corridors for potential projects as generalized electricity paths between two (or more) locations, as opposed to specific routes for transmission facilities. The Department believes that defining corridors too narrowly would unduly restrict state authorities, FERC, and other relevant parties in determining whether and how to authorize the construction and operation of transmission facilities to relieve the identified congestion. In their comments on the criteria set forth below, the Department invites commenters to address how broadly or narrowly the Department should consider and define corridors in its study and its NIETC designations.

III. Questions for Public Comment

A. Congestion Study

In conducting the initial electric transmission congestion study required by FPA subsection 216(a)(1), the Department intends to identify geographic areas where transmission congestion is significant, and where additions to transmission capacity (or suitable alternatives) could lessen potential adverse effects borne by consumers. The Department will compile an inventory of areas where planners believe significant transmission needs exist. This inventory, the work on which is already well underway, will be based on a review of existing transmission expansion plans and related studies by the regional coordination councils, other regional and subregional transmission planning groups, regional transmission operators, independent system operators and utilities. The inventory will also be informed by congestion modeling that the Department will conduct of the Eastern and Western Interconnects.

By August 8, 2006, the Department intends to publish its congestion study and to invite interested parties to provide comments and recommendations concerning these need assessments for each geographic area. Interested parties also will be invited to comment on or identify potential transmission corridors they think could be relevant to addressing such needs, and corridors suitable for designation as NIETCs. The Department will consider well-supported recommendations from affected States and interested parties throughout the study process regarding areas believed to merit urgent attention from the Department.

In that regard, if interested parties believe that there are geographic areas or transmission corridors for which there is a particularly acute need for early designation as NIETC, the Department invites interested parties to identify those areas in their comments on this NOI. If such areas are identified, the Department will consider whether it should complete its congestion study for that area in advance of the larger national study discussed elsewhere in this NOI, and proceed to receive comment and designate that area as an NIETC on an expedited basis. If interested parties wish to identify areas for early designation, they should supply with their comments all available data and information supporting a determination that severe needs exist. Parties should identify the area that they believe merits designation as an NIETC, and explain why early designation is necessary and appropriate. The Department will only consider for early designation as NIETCs those corridors for which a particularly compelling case is made that early designation is both necessary and appropriate, and for which data and information are submitted strongly supporting such a designation.

After publishing the national congestion study by August 8, 2006 and considering comments received on it, the Department may revise or update its study, or the Department may proceed directly to designation of some NIETCs, based on the study and the comments, alternatives and recommendations offered by the public.

To assist the Department in conducting and preparing its electric transmission congestion study so that the study will be the most useful in helping identify areas of need and areas Start Printed Page 5662potentially suitable for designation as an NIETC, the Department requests comments on the following questions:

(1) Should the Department distinguish between persistent congestion and dynamic congestion, and if so, how?

(2) Should the Department distinguish between physical congestion and contractual congestion, and if so, how?

(3) Appendix A lists those transmission plans and studies the Department currently has under review. In addition to those listed in Appendix A, what existing, specific transmission studies and other plans should the Department review? How far back should the Department look when reviewing transmission planning and path flow literature?

(4) What categories of information would be most useful to include in the congestion study to develop geographic areas of interest?

B. Criteria Development

While it is conducting the congestion study, the Department intends to develop criteria based on the considerations listed in subsections 216(b)(4)(A)-(E) of the FPA,[17] and any other criteria the Department considers relevant, to evaluate geographic areas identified in the congestion study as candidates for NIETCs. The Department intends to apply these evaluation criteria to the geographic areas identified in the congestion study in order to identify areas where NIETC designations would be appropriate.

The Department invites comment on what criteria it should use in evaluating the suitability of geographic areas for NIETC status. Preliminary criteria that might be used in evaluating these considerations for NIETC evaluation are listed below, along with associated metrics that could be useful in applying them. Commenters are also invited to apply any of the draft criteria to one or more specific geographic areas and demonstrate how the criterion helps to identify such areas as having national significance for NIETC designation.

Draft Criterion 1: Action is needed to maintain high reliability. Maintaining high electric reliability is essential to any area's economic health and future development. Accordingly, an area would be of interest for possible NIETC designation if there is a clear need to remedy existing or emerging reliability problems. Metrics: A definition of the affected area in terms of load, population, and demand growth; a description of the expected degree of improvement in reliability associated with a proposed project; if appropriate, identification existing or projected violations of NERC Planning Criteria TPL-001, -002, -003, or -004.[18]

Draft Criterion 2: Action is needed to achieve economic benefits for consumers. An area may need substantial transmission improvements to enable large economic electricity transfers that would result in significant economic savings to retail electricity consumers. Metrics: Estimates, based on transparent calculations and data, of the aggregate economic savings per year to consumers over the relevant geographic areas and markets. A demonstration of expected reduction in end-market concentration and how economic benefits for consumers would be affected.

Draft Criterion 3: Actions are needed to ease electricity supply limitations in end markets served by a corridor, and diversify sources. Metrics: Areas that are dependent on “reliability-must-run” plants would benefit from targeted improvements, in terms of enhanced reliability, reduced costs, or both. Similarly, areas that are highly dependent on specific generation fuels could economically benefit from supply diversification. Estimate the likely magnitude of such benefits, showing calculations.

Draft Criterion 4: Targeted actions in the area would enhance the energy independence of the United States. Metrics: Provide calculations showing how specific actions aided by designation as an NIETC would increase fuel diversity, improve domestic fuel independence, or reduce dependence on energy imports. Quantify these impacts, including possible impacts on U.S. energy markets.

Draft Criterion 5: Targeted actions in the area would further national energy policy.

Draft Criterion 6: Targeted actions in the area are needed to enhance the reliability of electricity supplies to critical loads and facilities and reduce vulnerability of such critical loads or the electricity infrastructure to natural disasters or malicious acts. Metrics: For this criterion, relevant metrics would be case-specific.

Draft Criterion 7: The area's projected need (or needs) is not unduly contingent on uncertainties associated with analytic assumptions, e.g., assumptions about future prices for generation fuels, demand growth in load centers, the location of new generation facilities, or the cost of new generation technologies. Other things being equal, arguably the Department should be more inclined to designate NIETCs where there are existing needs instead of projected needs, particularly if those future needs rest upon relatively uncertain assumptions and contingencies. On the other hand, timely construction of transmission facilities often requires lead-times of five years or more, and all projections are based on assumptions and involve some degree of uncertainty. The challenge here is to determine what level of confidence can be reasonably imputed to specific projections. Metrics: What metrics would be suitable for gauging such uncertainties?

Draft Criterion 8: The alternative means of mitigating the need in question have been addressed sufficiently. Recognizing the value of transmission alternatives, the Department wishes to avoid designating NIETCs in ways that might unduly affect stakeholders' decisions about how to meet specific needs, confer advantage on transmission options as opposed to non-wires options or generation options, or favor some transmission options over others. At the same time, the Department is mindful that even taking these other factors into account transmission expansion is clearly needed in many areas, and that transmission expansion is itself a protracted process. The Department seeks comments on how it should balance these concerns.

The Department also seeks comment on two additional questions:

(1) Are there other criteria or considerations that the Department should consider in making an NIETC designation? If so, please explain, and show how your proposed criterion would be applied, if possible in the context of a specific area or areas that you consider suitable for NIETC designation. For each new criterion proposed, you should offer metrics that measure or quantify the criterion.

(2) Are certain considerations or criteria more important than others? If so, which ones, and why are they especially important? Start Printed Page 5663

IV. Public Meeting Announcement and Comments

The date of the public technical conference is listed in the DATES section at the beginning of this notice of inquiry. The chief purpose of this conference will be to allow participants to discuss key issues raised by commenters' responses concerning the criteria here proposed for the evaluation of geographic areas for designation as NIETCs. For more information about the conference and registration information, please go to​1221.

To the extent possible, the Department wishes to make all submissions publicly available on one of its Web sites. However, if any person chooses to submit information that he or she considers to be privileged or confidential and exempt from public disclosure, that person should clearly identify the information that is considered to be privileged or confidential and explain why the submitter thinks the information should be exempt from disclosure, addressing as appropriate the criteria for nondisclosure in the Department's Freedom of Information Act regulations at 10 CFR 1004.11(f). The Department also requests that in such cases submitters provide one copy of their comments from which the information claimed to be exempt from disclosure has been redacted, and that protection of the information or data from disclosure be consistent with the requirements set forth in its Freedom of Information Act regulations at 10 CFR 1004.11.

Factors of interest to the Department when evaluating requests to treat submitted information as confidential include: (1) A description of the items; (2) whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sources; (4) whether the information has previously been made available to others without obligation concerning confidentiality; (5) an explanation of the competitive injury to the submitting person which would result from public disclosure; (6) when such information might lose its confidential character due to the passage of time; and (7) why disclosure of the information would be contrary to the public interest.

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Issued in Washington, DC on Friday, January 27, 2006.

Kevin Kolevar,

Director, Office of Electricity Delivery and Energy Reliability.

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Appendix A

Appendix A lists those transmission plans and studies the Department currently has under review.

I. General Documents or Data

1. Electricity Advisory Board, Electric Resources Capitalization Subcommittee, U.S. Department of Energy, “Competitive Wholesale Electricity Generation: A Report of the Benefits, Regulatory Uncertainty, and Remedies to Encourage Full Realization Across All Markets,” September 2002.

2. Electric Transmission Constraint Study, FERC OMOI, December 2003.

3. Electricity Advisory Board, U.S. Department of Energy, “Transmission Grid Solutions Report,” September 2002.

4. Federal Energy Regulatory Commission, “Testimony of Karl Pfirrmann, President, PJM Western Region, PJM Interconnection, L.L.C.,” Promoting Regional Transmission Planning and Expansion to Facilitate Fuel Diversity Including Expanded Uses of Coal-Fired Resources—Docket No. AD05-3-000.

5. Federal Energy Regulatory Commission, “Remarks of Audrey Zibelman, Executive Vice President, PJM Western Region, PJM Interconnection, L.L.C.,” Transmission Independence and Investment—Docket No. AD05-5-000 and Pricing Policy for Efficient Operation and Expansion of the Transmission Grid—Docket No. PL03-1-000.

6. U.S. Department of Energy, “National Transmission Grid Study,” May 2002.

7. U.S. Department of Energy, “Comments to the Designation of National Interest Electric Transmission Bottlenecks (NIETB) Notice of Inquiry,” Appended 10/15/04.

II. Documents or Data From the Eastern Interconnection

1. NERC 2005 Long-Term Reliability Assessment.

2. NERC 2005 Summer Assessment.

3. NERC 2005/2006 Winter Assessment.

4. U.S. Department of Energy, “National Transmission Grid Study,” May 2002.

5. FERC Form-715s.

6. Florida-Southern Interface Study for 2005 Summer & 2005-06 Winter Bulk Electric Supply Conditions (Oct 2004).

7. ISO-NE Regional System Plan 2005 (October 2005).

8. Maryland Public Service Commission, “Reply Comments of the Staff of the Maryland Public Service Commission in the Matter of the Inquiry Into Locational Marginal Prices in Central Maryland During the Summer of 2005”—Case No. 9047.

9. MEN 2002 Interregional Transmission System Reliability Assessment.

10. Michigan Public Service Commission, “Final Staff Report of the Capacity Need Forum,” January 3, 2006.

11. MISO 2003 Transmission Expansion Plan.

12. MISO Transmission Expansion Plan 2005 (June 2005).

13. NERC TLR Data.

14. NYISO 2004 Intermediate Area Transmission Review of the New York State.

15. NYISO Comprehensive Transmission Plan.

16. NYISO 2005 Load & Capacity Data.

17. NYISO Comprehensive Reliability Planning Process (CRPP) Reliability Needs Assessment (December 2005).

18. NYISO Comprehensive Reliability Planning Process Supporting Document and Appendices For The Draft Reliability Needs Assessment (December 2005).

19. NYISO Operating Study Winter 2004-05 (November 2004).

20. NYISO Transmission Performance Report (August 2005).

21. PJM Regional Transmission Expansion Plan 2005 (September 2005).

22. PJM, MISO, NYISO, and ISO-NE Real-time and Day-ahead Constraint Data

23. PJM Interconnection, L.L.C., “Comments of PJM in Response to the MD PSC Notice of Inquiry”—Case Number 9047.

24. Project Mountaineer, Work Group Meeting, Sheraton Four Points Hotel Baltimore, MD, August 3, 2005.

25. SERC Reliability Review Subcommittee's 2005 Report to the SERC Engineering Committee (June 2005).

26. SPP RTO Expansion Plan 2005-2010 (September 2005).

27. VACAR 2004-2005 Winter Stability Study Report (Mar 2004).

28. VACAR 2005 Summer Reliability Study Report (Apr 2004).

29. VACAR 2007 Summer Reliability Study Report (Feb 2002).

30. VASTE 2005 Summer Reliability Study Report (May 2005).

31. VASTE 2005-06 Winter Study Report (Nov 2005).

32. VEM 2004 Summer Reliability Study Report (May 2004).

33. VEM 2004-2005 Winter Reliability Study Report (Nov 2004).

34. VST(E) 2011 Summer Study Report (Nov 2004).

35. VSTE 2008 Summer Study Report (Nov 2005).

36. NPCC 2004 Report of the CP-10 Working Group Under the Task Force on Coordinated Planning.

III. Documents or Data From the Western Interconnection

1. Available on the WECC Web site—, open “Congestion Study” under the Main Menu of the home page.

1.1. “Framework for Expansion of the Western Interconnection Transmission System, October 2003”.

1.2. “Western Interconnection Transmission Path Flow Study”—February 2003.

1.3. “Northwestern Consortia to Study the Regional Wind Development Benefits of Upgrades to Nevada Transmission Systems”—May 10, 2005.

1.4. “Conceptual Plan for Electricity Transmission in the West”—August 2001.

1.5. “Proposed Criteria for Evaluation of Transmission and Alternative Resources”—October 2005.

2. Available on State of Wyoming Web site at​htdocs/​Start Printed Page 5664subregional/​reports.htm: “Rocky Mountain Area Transmission Study”—September 2004.

3. Available on California Energy Commission Web site at​2005publications /CEC-100-2005-006/CEC-100-2005-006-CTF.PDF: “Committee Final Strategic Transmission Investment Plan (Committee Final Strategic Plan), California Energy Commission, November 2005.”

4. Available on the Public Service Company of Colorado Web site at​wtpp.psco_​studies.html: “Colorado Long Range Transmission Planning Study”—April 27, 2004.

5. Available from WECC (Phase 3 Accepted Path Rating Study Report)—Call (801) 582-0353: “Southwest Power link and Palo Verde—Devers 500kV Series Capacitor Upgrade Project”—dated December 2, 2004.

6. Available from CAISO Web site.

6.1. CAISO testimony to the CPUC for the Palo Verde—Devers #2 Project​14cf/​14cf82f921c90.pdf.

6.2. Information on the Southwest Transmission Expansion Plan (STEP)​docs/​2002/​11/​04/​2002110417450022131.html.

6.3. Documents on the Palo Verde—Devers #2 project​docs/​2005/​01/​19/​2005011914572217739.html.

6.4. Information on the CAISO Transmission Economic Assessment Methodology (TEAM)​docs/​2003/​03/​18/​2003031815303519270.html.

7. Available from Northwest Power Pool Web site (Northwest Regional Transmission Association reports).

7.1. “Puget Sound Area Upgrade Study Report”—November 2004​ntac/​pdf/​PSASG%20Final%20Draft.pdf.

7.2. “Montana—Pacific Northwest Transmission Upgrade Study”​ntac/​pdf/​MT-NW%

7.3.​ntac/​pdf/​ Selected%20Transmission% 20Siting%20constraints.pdf.

8. Available from the Southwest Area Transmission Sub-Regional Planning Group Web site.

8.1. “Report of the Phase I Study of the Central Arizona Transmission System”​cats/​default.asp#phase1.

8.2. “Report of the Phase II Study of the Central Arizona Transmission System”​cats/​default.asp#phase2.

8.3. “Report of the Phase III Study of the Central Arizona Transmission System”​cats/​default.asp#phase3.

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1.  North American Electric Reliability Council, Electricity Supply and Demand Database (2003) available at​esd.

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2.  Edison Electric Institute, Survey of Transmission Investment at 1 (May 2005).

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3.  Department of Energy, National Transmission Grid Study, at 19 (May 2002) available at​ntgs/​reports.html.

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4.  Id. at 7; see also Hirst, U.S. Transmission Capacity Present Status and Future Prospects, 7 (June 2004).

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5.  National Transmission Grid Study, supra note 3, at 10-20.

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6.  Id. at 16-18.

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7.  The National Energy Policy Development Group Report, available at​engine/​​BT_​CODE=​ADAP.

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8.  National Transmission Grid Study, supra note 3.

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9.  Department of Energy Electricity Advisory Board, Transmission Grid Solutions, available at​index.cfm?​fuseaction=​home.publications.

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10.  Designation of National Interest Electric Transmission Bottlenecks, 69 FR 43833 (July 22, 2004) also available at​bottlenecks.

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11.  The Electricity Modernization Act of 2005, sec. 1221, § 216, 119 Stat. 594, 946-953 (2005) (to be codified as amended at 16 U.S.C. 824p). Note that section 216 of the FPA specifically excludes the area covered by the Electricity Reliability Council of Texas. Id. at § 216(k). Section 216 of the FPA does not mention Alaska and Hawaii; however, their electricity supply systems are not interconnected with the grids of the continental U.S., and therefore the Department does not plan to include these two states in its initial congestion study.

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12.  Id. § 216(a)(1).

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13.  Id. § 216(a)(1), (3).

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14.  Id. § 216(a)(2).

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15.  Id. § 216(a)(4)(A)-(E).

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16.  Id. § 216(b).

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17.  The five considerations are:

(A) The economic vitality and development of the corridor, or the end markets served by the corridor, may be constrained by lack of adequate or reasonably priced electricity;

(B)(i) The economic growth in the corridor, or the end markets served by the corridor, may be jeopardized by reliance on limited sources of energy; and (ii) a diversification of supply is warranted;

(C) The energy independence of the United States would be served by the designation;

(D) The designation would be in the interest of national energy policy; and

(E) The designation would enhance national defense and homeland security.

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[FR Doc. E6-1394 Filed 2-1-06; 8:45 am]