Transmission's Time in Congress  

Renewable ENergy World has an article on efforts to overhaul the regulatory environment governing grid expansion in the US - Transmission's Time in Congress.

This is turning out to be a crucial year for renewable energy legislation in Congress. First, in rapid fashion compared to its usual pace, Congress in mid-February passed the economic stimulus bill, which included numerous financial incentives for wind and other renewables. Soon after, a trio of renewable issues were put on the legislative agenda: a national renewable electricity standard (RES), then climate change and, finally, transmission.

In addition, a white paper on the issue of transmission developed by AWEA and other groups notes that almost 300,000 MW of wind projects, more than enough to meet 20% of our electricity needs, are waiting in line to connect to the grid because there is inadequate transmission capacity.

All three issues are closely intertwined. To solve the climate change problem, proponents of legislative action say we need to reduce carbon emissions through a cap-and-trade program. But other incentives are also needed to spur use of more renewable energy in power generation; hence the RES legislation. But a national RES requires still other measures for it to be successful; specifically, many states that have enacted RES legislation cannot meet RES targets without more transmission. Thus, at the national level, transmission legislation is also seen as key to renewables' success.

The Challenge

For the wind industry, the need for new transmission has been obvious for some time. Last year, for example, the U.S. Department of Energy concluded that insufficient transmission was the biggest obstacle to meeting 20% of U.S. Electricity demand from wind by 2030. In addition, a white paper on the issue of transmission developed by AWEA and other groups notes that almost 300,000 MW of wind projects, more than enough to meet 20% of our electricity needs, are waiting in line to connect to the grid because there is inadequate transmission capacity.

To meet such challenges, transmission legislation would be intended to help clear the way for construction of a high-capacity, green superhighway system that would connect the renewable energy sites, often in rural areas, to the urban population centers where electricity demand is growing.

All of the legislation that has been proposed would tackle the "three p's": planning, paying, and permitting. First, the legislation would create a planning process for the eastern and western halves of the nation to design plans to develop transmission to access and deliver renewable energy. Second, in general, the legislation would set up a means to pay for the system by allowing the regions to propose a manner in which to allocate the costs of new transmission infrastructure; if they fail to do so, it would be done broadly across the region and spread, on a pro-rata basis, among all the users of the grid in that region. Third, all of the proposed bills would create federal siting authority to override state or regional objections, if needed.

Much of the new authority needed to get new transmission going would fall to the Federal Energy Regulatory Commission (FERC), which would be given clear authority to certify new entities to undertake the planning process, approve and, in some instances, create the cost allocation mechanism and authority to site transmission.

Proponents say these reforms are needed because the current system for planning, financing and building transmission dates back half a century. State utility regulators do not have the authority or the incentive to approve plans for transmission projects that do more than serve ratepayers in their own state, while no effective federal authority exists either, creating crucial problems given that new transmission infrastructure would need to cross state lines and serve customers in multiple states as well.