Transmission Buildout Requires State as Well as Federal Engagement

Posted by Jeff Dennis on Mar 15, 2022 11:30:00 AM

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The need to deploy vast new supplies of advanced energy technologies to achieve a 100% clean electricity system and power the transportation and building sectors with clean electricity is well documented. Expanding the nation’s electric transmission infrastructure — the long-distance high-voltage lines that deliver electricity in bulk from generation resources to local distribution networks — is a key part of achieving that goal. A variety of challenges stand in the way of transmission expansion, ranging from weak planning processes, to fights over who will pay the cost of new lines, to local permitting and siting issues. Addressing these challenges will require policy changes not just at the federal level, where recent attention has been focused, but also in states and local communities.

To achieve a 100% clean electricity system, we need a diverse mix of large-scale zero- and low-carbon electric generation technologies (like onshore and offshore wind, solar, hydropower, and advanced nuclear), energy storage technologies (including battery storage and clean hydrogen), and distributed energy resources (DERs) including demand-side technologies (like rooftop solar, behind-the-meter storage, electric vehicles with vehicle-to-grid capabilities, energy efficiency, and demand response). To tie that diverse mix together in a reliable, resilient, and affordable way, we need an updated electricity delivery network, including expanded transmission capacity.

Expansion of the transmission grid has recently taken center stage on policy agendas in Washington, D.C., where clean energy advocates have sought several interventions to help speed the planning, financing, and permitting of new transmission lines. Much of that focus has been on FERC, which regulates the rates, terms, and conditions of interstate electric transmission service, including how transmission is planned and paid for by customers, the process for connecting new generation to the grid, and how competing generation resources access the transmission grid to deliver their output to customers.

Last year, FERC issued a massive Advanced Notice of Proposed Rulemaking (ANOPR) seeking comments from the public on numerous potential changes to its regulations governing transmission planning, cost responsibility, and generator interconnection processes. It also established a new joint Task Force with the states to foster discussion of transmission-related issues.

Beyond FERC, the role of the U.S. Department of Energy (DOE) in resolving transmission development challenges has also received significant attention. The bipartisan Infrastructure Investment and Jobs Act (IIJA) passed by Congress and signed by President Biden includes over $2 billion in new funding and authorities for DOE to spur transmission planning and construction and address siting and permitting challenges. Earlier this year, DOE announced its “Building a Better Grid Initiative,” which will pursue five categories of work to facilitate deployment of transmission (both onshore and offshore), covering coordination of government entities, transmission planning, financing, permitting, and R&D.

This focus on FERC, DOE, and Congress to address transmission roadblocks is critical – and AEE is actively involved (see our comments to FERC on regional transmission planning processes, in response to the ANOPR) – but states and local communities also play a critical role in ensuring that transmission gets built. States (and in some cases local governments) must ultimately determine whether a transmission project is needed to grant siting approvals (including the use of eminent domain to obtain right-of-way) under their own state laws. State regulators also pay close attention to the costs of transmission and whether a project will provide benefits to their consumers that justify asking them to pay those costs.

Moreover, local communities are the hosts of transmission infrastructure, and meeting their needs and reducing impacts on them (including historically disadvantaged communities that often unfairly bear the burden of energy infrastructure) is vital to achieving the national transmission buildout we need for an advanced energy future. Local opposition has led to recent high-profile rejections of transmission projects considered key to meeting state and national clean energy policy objectives, most recently in Maine.

Some states are actively addressing the need for new transmission to meet their policy goals. In 2021, both Colorado and Nevada adopted new laws that require the utilities in their states to join a Regional Transmission Organization, which will provide a vehicle for meeting collective transmission needs in the West at lower cost. Each state also took additional steps in these laws to support the development of new transmission. Colorado established the Colorado Electric Transmission Authority (CETA) to help modernize and streamline the state’s electric transmission planning process, identify intrastate transmission corridors, and finance new projects. (New Mexico’s similar Renewable Energy Transmission Authority was instrumental in supporting the recently energized Pattern Energy’s Western Spirit Transmission line.) Nevada’s legislation, meanwhile, provided critical support for the “Greenlink” transmission project, which comprises two high-capacity lines that would link the entire state and unlock significant renewable energy development potential.  

These examples show the potential for state and local policy to move transmission projects from the drawing board to reality. But sustained engagement with state and local policymakers is necessary to marshal support for building the transmission needed to unlock low cost, carbon-free advanced energy supplies. To overcome siting and permitting challenges, states need to elevate transmission expansion as part of their overall policy goals. That means actively engaging in transmission planning processes to identify projects needed to meet those goals, and prioritizing working with local communities to identify preferred corridors where those projects can be located while minimizing their impacts on the public and vulnerable populations.

Where states have worked together in transmission planning efforts, it has produced results. For example, states in the Midwest worked closely with each other and the Midcontinent Independent System Operator (MISO) on a planning process that led to the approval in 2011 and subsequent construction of a $5 billion portfolio of new transmission projects, mostly driven by the rapid growth of wind power, which were found to collectively benefit every individual state in the MISO region far in excess of what they were required to pay for them.

The attention and resources devoted to federal policy changes to support transmission buildout, while focused mostly on steps that FERC, DOE, and other federal actors can take on their own, have also opened opportunities for states to get more engaged. The IIJA and other measures passed by Congress have provided DOE with significant funding that it can use to provide technical assistance to states to help them engage in existing regional planning processes, conduct their own stakeholder processes to identify transmission needs and work with local communities to identify intra-state corridors that minimize impacts, or work with other states to plan for new challenges like connecting offshore wind. DOE’s newly announced “Building a Better Grid Initiative” prioritizes state technical assistance in several areas. In addition, as noted above, there is FERC’s joint task force with NARUC, which will provide a forum for state utility regulators and FERC to discuss these issues.

Helping states get more engaged in transmission planning, elevating transmission development as a priority for states with clean energy commitments, engaging local communities to address their concerns, and following through on policy changes at the federal level, are all necessary to secure the transmission infrastructure investment that will achieve a 100% clean electricity grid and electrify transportation, buildings, and other end uses. For this reason, AEE has made comprehensive policy engagement on transmission issues at all levels of government a top priority.

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Topics: State Policy, Federal Policy, Transmission