Will Federal Government Enable Large Transmission Projects?

by Bob Shively, Enerdynamics President and Lead Facilitator

As our nation’s generation mix continues to evolve from one based on thermal fossil fuel baseload units to one based more on variable renewable generation and natural gas turbines, the role of transmission must also evolve. To the extent that the mix includes increasing distributed resources, then the role of transmission may not be a critical issue.

Distributed PV chart                     Source: NERC 2015 Long-Term Reliability Assessment, p. 20

 

But at least to date, the majority of renewable generation has taken the form of utility-scale projects.

Utility scale vs distributed

Since renewable projects are located where renewable resources are most plentiful, new projects are often built in regions without much existing transmission and therefore require significant upgrades to deliver the power to load centers. A perfect example of this is the proposed 3,800 MW Power Company of Wyoming wind project that, if built as planned, will be the largest wind farm in North America. To make the project feasible, construction of the $3 billion, 725-mile TransWest Express transmission line connecting the farm to the grid in southern Nevada via Colorado and Utah will be required.

Wind resources and transmission lines.pngSource: NREL.gov[1]

Additionally, system operators are increasing depending on interregional power flows to manage the variable output provided by wind and solar resources. This is perhaps best demonstrated by the ongoing growth of the Energy Imbalance Market in the western United States, but is also demonstrated by the ability of MISO to absorb growing renewable generation across its footprint.

Market areas maps.png

The difficulty with needing more transmission is that transmission projects are difficult to build because, unlike natural gas pipelines, siting approval for electric transmission has traditionally been the legal purview of the states. This means that a line like TransWest must individually obtain approval from multiple states. This can be difficult because while a project may benefit numerous states, it may provide little to no benefits to one state that the line must pass through. The opposition of just one state has frequently been sufficient to sink proposed transmission projects.

To address difficulties in building transmission projects, the federal government has taken steps to move beyond sole state decision making. Congress in the 2005 Energy Policy Act authorized FERC to issue permits in certain situations where the states refused, but subsequent court decisions prevented this provision from being used. In 2011 FERC issued Order 1000, which required transmission planning to be done on a regional basis, but FERC does not have the ability to compel states to allow transmission to be built.

Finally, project developers working on the Plains and Eastern Clean Line, a $2 billion, 705-mile transmission project designed to bring wind power to the southeast figured out another angle. The project received approval from the states of Texas, Oklahoma, and Tennessee, but was stymied by the Arkansas Public Service Commission that stated that state law in Arkansas only allowed it to approve utility-owned transmission, not lines owned by independent transmission companies.

Plains and Eastern Clean LineSource: Cleanlineenergy.com

The project developers then turned to a separate provision of the 2005 Energy Policy Act that allows the Southwest Area Power Administration and/or the Western Area Power Administration to participate in transmission projects in states in which the agencies operate. With the participation of the federal agencies, state approval is no longer required[2] .

Of course, the state of Arkansas is not happy with the federal government stepping in, and it is attempting to change federal legislation. But, at least for now, there is an example of federal jurisdiction being used to construct multi-state transmission. More such federal efforts may be required if the U.S. is to build out the transmission “super-highway” envisioned by some renewable proponents. The fight over who has rights to approve transmission projects will significantly impact how our nation’s electric infrastructure develops going forward.


 

Footnotes:

[1] http://www.nrel.gov/electricity/transmission/transmission_planning.html

[2] See http://energy.gov/sites/prod/files/2016/03/f30/Summary%20of%20Findings%20Plains%20%20Eastern%20Clean%20Line%20Project%203-25-2016%20FINAL.pdf, p. 2 for further explanation

 

About Enerdynamics

Enerdynamics was formed in 1995 to meet the growing demand for timely, dynamic and effective business training in the gas and electric industries. Our comprehensive education programs are focused on teaching you and your employees the business of energy. And because we have a firm grasp of what's happening in our industry on both a national and international scale, we can help you make sense of a world that often makes no sense at all.
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