New Transmission can Provide a Path for Renewables, but Hurdles are Significant

Published: October 25, 2021

By: Concentric Staff Writer

There is growing recognition among policy makers, industry, and environmental groups that more electric transmission lines will be needed across the United States to achieve the buildout of renewable energy infrastructure required to meet climate change goals.

The federal government along with states recently moved forward with major new efforts to build transmission infrastructure, but these initiatives have many hurdles that could cause them to sputter, as was the fate of previous attempts by the federal government to take more control over transmission siting.

The Federal Energy Regulatory Commission (FERC) took a major step toward reforming transmission planning, recently closing out its comment period from industry, state regulators, regional market officials, and others on its advance notice of proposed rulemaking (ANOPR) issued in July. The FERC proceeding, “Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection” will update FERC’s well-known Order No. 1000 on transmission and cost allocation by utilities, issued by the Commission in 2011.

“The electricity sector is transforming as the generation fleet shifts from resources located close to population centers toward resources, including renewables, that may often be located far from load centers,” FERC staff said in a presentation on the ANOPR. “The growth of new resources seeking to interconnect to the transmission system and the differing characteristics of those resources are creating new demands on the transmission system.” The Commission added that the priority in regional transmission planning is ensuring just and reasonable rates and maintaining reliability as the resource mix shifts to more renewables.

One prominent group, the Electric Power Supply Association (EPSA), which is the national trade association representing competitive power suppliers, told FERC in its filed comments that it is critical “that any reforms to transmission policies leverage the Commission’s commitment to competition to ensure that cost-effective transmission investments are signaled and supported by planning, cost allocation, and/or interconnection processes, including the use of competitive procurement processes. FERC’s previous landmark orders on transmission issues under its authority have been successful by ensuring that non-discriminatory open access transmission service supports and promotes competitive power markets.”

There was also a major new effort on state-federal cooperation for transmission planning in June: FERC’s creation of the Federal-State Task Force on Electric Transmission. The task force will hold its first meeting Nov. 10 in Louisville, Kentucky, a location and date chosen to coincide with an annual meeting of state regulators from around the country. FERC said this is the first in a series of such meetings, and an agenda will be issued Oct. 27. FERC recently selected 10 state regulators to the task force that were nominated by the National Association of Utility Regulatory Commissioners (NARUC).1

FERC is accepting agenda topics for the November meeting from interested parties (AD21-15). FERC notes that the development of new transmission infrastructure raises a host of issues, representing an area ripe for federal-state coordination and exploration by the task force.

The goal of the task force is to identify barriers to the planning and development of new transmission in order to facilitate achievement of state and federal policy goals such as renewable portfolio standards. The task force will also explore ways for states to use FERC-jurisdictional planning processes to achieve state policy goals. It will examine methods for states to voluntarily coordinate to develop regional transmission solutions and identify possible reforms to FERC regulations regarding planning and cost allocation of transmission projects.  Additionally, the task force will examine ways to connect resources more quickly to the electric grid and make transmission more cost-effective through enhanced state and federal coordination.

A large-scale effort by the federal government aimed at developing new transmission infrastructure ran aground more than 15 years ago, illustrating the tremendous difficulties in siting massive new transmission facilities, including state and local opposition. The U.S. Congress gave the Department of Energy (DOE) the authority to create “National Interest Transmission Corridors” in the Energy Policy Act of 2005. The legislation gave the DOE power of eminent domain to purchase property needed to build transmission if state and local government failed to issue permits.

But the effort received pushback from state and local governments, and ultimately the designation of two corridors in the Mid-Atlantic and Southwest in 2007 and a congestion study done by DOE in 2006 were vacated by the U.S. Ninth Circuit Court of Appeals in California after a lawsuit by the Wilderness Coalition against DOE. The court ruled that DOE had not adequately consulted with states and had not considered environmental impacts.

Any new effort by FERC could run up against the same opposition from some states. For instance, Arizona Corporation Commission Chairwoman Lea Márquez Peterson wrote to the U.S. Congress in July, expressing concern over a similar national-interest transmission corridor designation within the federal infrastructure bill. She objected to any involuntary regionalization of the Western electricity grid, pointing to blackouts in California last year and in Texas earlier this year.

“Taking the opportunity to provide direct public engagement and involvement in the process away from Arizona’s local leaders and residents, in order to send it to federal bureaucrats in Washington, DC, would only exacerbate the objections that communities already have for the siting of transmission lines,” Márquez Peterson said in the letter. “It’s hard enough to convince citizens to support transmission lines through their communities when the siting process takes place locally, let alone to convince them to support a project that will be heard and decided in Washington, DC.”

The federal-state power struggle is as old as the United States itself, and modern transmission-system planning is no different, leaving the federal government with a challenging path ahead to get more transmission built and move renewable energy around the country.

For inquiries related to this article, please contact info@ceadvisors.com.

All views expressed by the contributors are solely the contributors’ current views and do not reflect the views of Concentric Energy Advisors, Inc., its affiliates, subsidiaries, or related companies. The contributors’ views are based upon information the contributors consider reliable at the time of publication. However, neither Concentric Energy Advisors, Inc., nor its affiliates, subsidiaries, and related companies warrant the information’s completeness or accuracy, and it should not be relied upon as such.

1 The task force includes the four current members of FERC—Chairman Richard Glick, Allison Clements, James Danly and Mark Christie—as well as the 10 state commissioners nominated by NARUC earlier this year. The task force is chaired by Glick, with two state commissioners appointed to five different regional conferences: Mid-Atlantic; Mid-American; New England; Southeastern and Western. State commissioners on the task force include Gladys Brown Dutrieuille, Chair of the Pennsylvania Public Utility Commission; Jason Stanek, chair of the Maryland Public Service Commission; Andrew French, chair of the Kansas Corporation Commission; Dan Scripps, chair of the Michigan Public Service Commission; Riley Allen, chair of the Vermont Public Utility Commission; Matthew Nelson, chair of the Massachusetts Department of Public Utilities; Kimberly Duffley, chair of the North Carolina Utilities Commission; Ted Thomas,  chair of the Arkansas Public Service Commission; Kristine Raper, chair of the Idaho Public Utilities Commission and Clifford Rechtschaffen, a member of the California Public Utilities Commission.

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