Biden’s got a plan for ramping up energy transmission

The White House wants Congress to pass permitting reform. In case that doesn’t work, it’s tapping DOE’s authority to make it easier to build transmission.
By Jeff St. John

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A lone black transmission tower on a grass covered hill against a blue sky with wispy white clouds
(Thomas Despeyroux/Unsplash)

Last week, the White House released a comprehensive plan that could help fix America’s dysfunctional energy transmission system. The aim is to break down the barriers that are holding back the buildout of the truly massive amount of high-voltage power lines the country needs to connect clean energy projects to the grid and decarbonize the nation’s electricity supply.

Now the question is how much of the plan can be passed through a politically fractured Congress — and if the answer is none, how much of the plan can be pushed through via executive actions by the Biden administration.

The stakes are enormous — and the deadlines are looming. Over the past decade, the growth of the U.S. transmission grid has slowed from 2,000 miles per year between 2012 and 2016 to just 700 miles per year from 2017 to 2021, according to the Department of Energy. Large-scale transmission projects can face decades of disputes over permitting and cost-sharing. New wind and solar projects currently face yearslong backlogs and rising grid-upgrade costs due to the lack of adequate transmission capacity.

If the U.S. can’t rapidly speed grid buildout to accommodate this new clean power, the country won’t be able to realize the majority of the decarbonization potential unlocked by the Inflation Reduction Act, according to a comprehensive study led by Princeton University researchers.

Given that we have to increase electric transmission 60 percent over the next seven years — which means building transmission lines at twice our current pace — we have to fix this problem now,” John Podesta, senior advisor to the president for clean energy innovation and implementation, said in a May 10 speech in Washington, D.C. introducing the new plan.

The White House plan includes a set of priorities it’s asking Congress to take up in permitting reform legislation, including a host of proposals to streamline the processes for siting and permitting transmission lines and connecting clean energy projects to the grid. It also incorporates steps being taken by federal agencies independent of congressional action, including a streamlined process for interagency review and a commitment to reduce the time for federal permitting and environmental review of proposed transmission projects to no more than two years.

But the fixes won’t be easy. The mechanisms of delay for transmission buildout are pervasive at every level of government — federal, state, and local,” Podesta said. 

And even the entities that want to rapidly build more transmission don’t agree on how best to reform the laws and regulations that make the construction of new lines so challenging. Utilities, transmission developers and environmental groups all back different approaches that give varying amounts of attention to the rights of landowners, effects on communities and protection of natural habitats.

Permitting reform remains uncertain 

Most of Biden’s plan comes in the form of a plea for Congress to pass legislation this year to reform the ways that energy infrastructure is permitted. Key proposed components include limiting the length of time during which projects can be legally challenged and consolidating permitting into a smaller number of agencies. But it’s far from clear whether Democrats and Republicans will be able to agree on what constitutes effective reform.

Senator Joe Manchin (D–West Virginia) introduced permitting reform legislation last year that was supported by many clean-energy developers and utilities, but it faltered under opposition from some Democrats and environmental groups worried that fossil-fuel infrastructure would be the primary beneficiary. Meanwhile, Republicans in Congress have opposed permitting reforms aimed at enabling more clean energy. Permitting reform could be included in a negotiated package to raise the debt ceiling, but that’s highly uncertain.

That’s why pro-transmission groups that have continued to lobby for permitting reform this year are also looking to the Biden administration to act outside of new legislation. 

I think transmission is too important to wait on Congress,” Christy Walsh, senior attorney with the Natural Resources Defense Council, said during an April webinar hosted by Americans for a Clean Energy Grid (ACEG), an advocacy group backed by utilities, clean energy groups, transmission industry groups, environmental groups and labor organizations.

ACEG’s webinar was focused on the group’s legislative agenda, which includes permitting reforms similar to those proposed by Manchin last year and by the Biden administration last week. ACEG is also asking for a tax credit for transmission investments — one of the few clean-energy-related tax credits that was proposed but not enacted in last year’s Inflation Reduction Act.

A lot of the goals can be achieved through administrative actions, and we all need to keep pushing forward on that,” Walsh said. 

Waiting on FERC for planning and interconnection reform

Walsh highlighted a host of actions underway at the Department of Energy (DOE) and at the Federal Energy Regulatory Commission (FERC) — two federal agencies with authority over how interstate transmission lines are planned, built and paid for — that could also help expand the scope of transmission planning to meet the needs of a high-renewables future.

We have to keep tackling this through FERC and DOE,” she said. 

FERC has been the primary actor in transmission reform so far, and the White House plan cited the agency’s work in several key areas. Those include two major rulemakings FERC launched last year — one aimed at restructuring how utilities and regional grid operators plan for and assess the benefits of long-range transmission buildouts, and another aimed at reducing the wait times and costs for new generation projects seeking to interconnect to the grid.

But since those two reform efforts began, the FERC chair who led them, Richard Glick, failed to be reconfirmed for the position due to opposition from Senator Manchin related to policy on natural gas pipelines. Glick’s departure has left FERC with only four commissioners instead of the five it’s meant to have.

Two of those seats are held by Democrats who have supported transmission reforms: Willie Phillips, the new FERC chair, and Allison Clements, who’s had a long career working for environmental causes. The other two are held by Republican commissioners: James Danly, who voted against last year’s rulemaking on long-range transmission planning, and Mark Christie, who has been a staunch supporter of states as the final decision-makers for transmission investments.

Rob Gramlich, a grid analyst, former FERC economic adviser and former executive director of ACEG, warned in a recent interview on Canary’s Catalyst podcast that this new political reality at FERC means that we have these potentially great actions, but we don’t know if they will pass, and we don’t know if maybe they’ll just pass a weak form of them.”

One key concern is that FERC’s long-range grid-planning reforms may not go far enough in tackling what Gramlich described as the root cause” of the country’s grid problems: the absence of centralized grid-planning authority.

Many of the conflicts that have stymied large-scale transmission projects in the past have hinged on disputes between different states’ regulators and the utilities they oversee over how the costs of building projects should be allocated between the multiple states they cross. Without a strong planning process in place, individual states and utilities are likely to act in ways that prevent costly projects from moving forward to avoid having to bear a portion of the costs of building them.

Podesta called out the need for accelerating the deployment of transmission and making permitting more efficient and predictable for interstate transmission projects. A key part of this is allowing projects to allocate project costs to customers that benefit from the new transmission.”

But FERC has not yet launched a rulemaking to address this key cost-sharing issue, and it’s not clear if the four commissioners now at FERC could reach a consensus on how to do so. 

Gramlich cited several examples of how inertia against large-scale planning has been overcome in the past in the Midwest, Texas and California. A new long-range transmission plan for parts of the Midwest promises to bring billions of dollars of new transmission to that region over the coming years.

But building broader regional consensus around large-scale plans is hard work, and we don’t necessarily have that yet,” he said. 

Granting federal agencies the authority to find and fix grid bottlenecks 

While the Inflation Reduction Act didn’t provide tax credits for transmission, the Infrastructure Investment and Jobs Act passed in 2021 does provide billions of dollars in federal lending authority to boost transmission development, Podesta noted in his speech.

What’s more, he said, the infrastructure law unlocks DOE and FERC tools to accelerate the deployment of high-capacity transmission” by employing a nearly two-decade-old authority that’s never been successfully put to use before.

Under the 2005 Energy Policy Act, DOE has the authority to designate National Interest Electric Transmission Corridors — areas where DOE has determined that electric energy transmission capacity constraints or congestion are adversely affecting consumers.” But early efforts to use this NIETC authority have been stymied by unfavorable court decisions that have severely limited its practical application.

The infrastructure law altered the legal equation for NIETC authority by removing the ability of state regulators to block projects or simply fail to move them forward. It also expanded the scope of DOE’s authority to determine not only where transmission constraints or congestion exist today, but where they are expected to exist in the future — a step that opens up the use of the authority to plan ahead to build the grid to accommodate future clean energy growth.

In February, DOE issued a draft of its National Transmission Needs Study, a nationwide attempt to identify geographic areas where the power grid could benefit from new or upgraded transmission facilities.” This analysis will inform DOE’s use of its authorities and funding related to electric transmission,” including the potential designation of NIETCs, the draft report states.

And earlier this month, DOE issued a notice of intent” seeking input on how to implement its new NIETC authority on an application-driven, route-specific” basis. Instead of identifying wide areas of land as previous NIETC designations did, this process would give transmission developers the leeway to propose projects in the areas identified by the National Transmission Needs Study.

A lot of us already know where these projects are needed, especially those of us that develop generation,” Nicole Luckey, senior vice president of regulatory affairs for clean-energy and transmission developer Invenergy, said during April’s ACEG webinar. We know where the congestion is on a system because our projects are being curtailed today because of congestion.”

NIETC designation also opens the door for projects to seek access to revolving loans from a pot of $2.5 billion in lending authority created by the infrastructure law and $2 billion in lending authority created by the Inflation Reduction Act. Under these programs, DOE would sign contracts to buy up to half of the electricity-delivery capacity of the lines being built.

Having the DOE step in to guarantee offtake” of a large portion of a transmission project’s capacity could be vital for transmission developers that face a chicken-and-egg problem,” Luckey noted. Many would-be customers are leery of signing contracts with a transmission project before it has all of its permits in place, she said — but many state authorities require projects to have committed offtakers” of their power before they’ll issue permits.

It certainly helps to have DOE willing to potentially enter into these contracts with merchant transmission developers to help with the permitting process,” she said. Because the loans are rotating loans, DOE can sell its stake in a transmission line’s capacity to new buyers once it’s built and put the money to work in new commitments to proposed lines, she noted.

The infrastructure law also opens the door for FERC to play a role as a backstop siting authority” for NIETC-designated transmission projects — in other words, giving FERC the authority to issue construction permits where states have denied approval. FERC launched a proceeding to review its policy on this backstop siting authority in December, but it’s unclear to what extent the commissioners will assert federal authority over state jurisdiction.

At the federal level, the Biden administration is pushing agencies to coordinate their permitting work. In his speech, Podesta highlighted a new agreement between nine federal agencies to put electric transmission permitting on a fast track” by giving DOE authority to coordinate a pre-application mechanism” that aligns permitting between those agencies.

ACEG Executive Director Christina Hayes praised this multi-agency agreement in a prepared statement, noting that it clearly gives the Department of Energy the power to require robust community outreach and coordination among agencies, which will make transmission permitting more efficient.”

But Hayes noted that the agreement doesn’t yet include the U.S. Department of Transportation. That’s a problem, given that the agency will need to play a role in siting transmission lines along highways — a potentially game-changing approach to gaining access to transmission rights of way that crisscross the country.

Getting communities to yes on new transmission 

ACEG has long promoted the economic as well as the environmental benefits of building new transmission capacity. In 2021, it detailed how 22 existing transmission projects with a combined cost of $23.3 billion could spur about $100 billion in new clean energy development and create more than 1.2 million jobs.

Those projects include TransWest Express, a $3 billion project to carry up to 3 gigawatts of wind power from Wyoming to California, which took 18 years from inception to receiving its final approval last month. Another, the SunZia project meant to carry up to 3 gigawatts of New Mexico wind power to Arizona and California, has been in the works nearly as long and still hasn’t crossed the permitting finish line.

Other projects on the list include the Grain Belt Express and SOO Green HVDC Link, two Midwestern projects now struggling to obtain necessary permits and interconnection permissions from key regulatory stakeholders, and the New England Clean Energy Connect project, a planned line from Canada to New England that just won a court battle against a ballot measure passed by Maine voters that would have killed the project.

Proponents of permitting reform say it could reduce costs and uncertainty for transmission developers while protecting the rights of landholders and communities to challenge projects. 

Opponents cite the record of fossil-fuel pipelines that have been built against the will of communities that could be harmed by them. They argue that Congress should strengthen the opportunities for communities to challenge potentially harmful projects, not pass legislation to limit those opportunities.

Groups such as the Natural Resources Defense Council are advocating for building out transmission but in a fair and sensitive way. We’re going to need to build a lot of transmission, but we also have a pretty bad history of systemic environmental racism” in terms of how energy infrastructure has been sited and permitted in the U.S., said NRDC’s Walsh. We’ve got to build this out while also considering the communities that are going to benefit from the additional transmission but also that the transmission is going to go through.”

ACEG has developed a set of siting best practices for transmission developers that includes early and honest engagement with communities,” she noted. Binding agreements with communities to limit disruption from building transmission lines, mitigate environmental harms, and find ways to share in the economic benefits” can actually speed transmission development and reduce litigation,” Walsh said.

Podesta highlighted the Biden administration’s requests to Congress to authorize the creation of chief community engagement officer” positions at federal agencies to make permitting processes more inclusive, and to direct funds to assist state, local and tribal governments with reviewing transmission project proposals.

Podesta also took a shot at the not in my backyard” opposition to transmission development based on less significant concerns such as altering the views from people’s homes. 

If we can’t build some new things in a few backyards, the climate crisis will destroy everyone’s backyards — along with the livelihoods, communities, wildlife and biodiversity we all want to protect,” he said. I might not be popular among my friends in the environmental movement for saying that — but it’s the reality.”

Jeff St. John is director of news and special projects at Canary Media. He covers innovative grid technologies, rooftop solar and batteries, clean hydrogen, EV charging and more.