The Federal Energy Regulatory Commission has announced new efforts to increase cooperation with states to develop new transmission. It's an early step in the agency's plan to ease and expedite the build-out of the high-voltage networks that are needed to grow the country's clean energy capacity.
At its Thursday meeting, the agency responsible for regulating interstate transmission systems announced a first-of-its-kind task force in collaboration with the National Association of Regulatory Utility Commissioners (NARUC). The joint undertaking will seek to align federal and state regulators in an effort to identify and navigate barriers to transmission construction.
FERC also clarified last week that states and transmission providers can enter voluntary transmission agreements. The hope is that this rule will allow states to pay for transmission lines that are required to meet state energy goals but which are not prioritized in regional planning efforts.
Collectively, the actions could help alleviate stubborn conflicts over where long-range transmission should be built and who should pay for it by engaging states early on in the process.
“Regional transmission planning and cost allocation processes are all so well intended, but we’ve realized they are taking far too long,” said Colette D. Honorable, a partner at law firm Reed Smith and a former FERC commissioner and NARUC president. “This provides a great new opportunity…for a renewed commitment on all sides to really focus on better ways to carry out this work, so as not to be an impediment to the [energy] transition.”
New transmission lines are notoriously difficult to construct, in part because they traverse so many jurisdictions. Large projects often take over a decade to complete; many languish for even longer. But a robust transmission network will be essential to increasing the proportion of clean electricity on the grid because the best renewable resources are often far from urban centers of electricity demand.
Richard Glick, who was appointed to the role of FERC chair in January, has said that one of his priorities this year is to craft regulations that will ease the constraints to expanding the country's transmission grid. FERC will seek "to outline a path forward on many of these transmission-related issues in the near future," Glick said at the Clean Power 2021 virtual summit earlier this month, adding, "certainly by the end of the summer."
The Biden-Harris administration has proposed investing up to $100 billion to upgrade the transmission system in service of its larger goal of 100 percent carbon-free electricity. The White House infrastructure plan also includes the creation of a Grid Deployment Authority to encourage transmission construction along existing rights-of-way for roads and railways, which could speed permitting and planning.
Equally difficult, according to Rob Gramlich, founder and president of transmission analysis firm Grid Strategies LLC, is determining which entities will fund transmission projects that cross state lines and benefit a wide range of regional electricity users.
“Everybody wants it, but everybody wants somebody else to pay for it. That’s really been the challenge,” Gramlich said. “It’s as if we were able to use no tax dollars for national defense and we had to go around and talk to individual citizens in cities and towns about who’s going to contribute how much to different Pentagon priorities.”
U.S. lawmakers including Senator Martin Heinrich (D-New Mexico) have introduced legislation offering large transmission projects a federal investment tax credit to help with financing. The Biden administration also endorsed that policy in its infrastructure plan. The announcements from FERC are “a welcome development,” said Sen. Heinrich.
“There is recognition that we need to find a better path forward that removes barriers in siting and permitting this critical energy infrastructure. We don't have any more time to waste,” the Senator said in an email.
FERC’s announcement on state agreements also helps clarify part of a 2010 FERC rule called Order 1000, which allows state policies to be considered in regional transmission planning. Last year, New Jersey utility regulators voted to use the state-agreement approach to help build transmission in the PJM region to support state offshore wind goals.
NARUC will nominate 10 state commissioners to serve alongside FERC commissioners on the joint task force, which will then host public meetings regarding transmission development.
The task force represents “a new opportunity for both entities to commit to sit around the table and work together versus opposing one another,” said Honorable.
“It will provide greater certainty for the sector. And greater efficiencies, hopefully, and expeditious infrastructure decisions, which are really important.”
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