A divided Federal Energy Regulatory Commission on Monday issued a long-awaited overhaul of how regional electric transmission lines are planned and paid for, a move welcomed by clean energy groups but criticized by a conservative commissioner who said it was driven by “special interests” and exceeded the commission’s authority.
The Commission’s final rule was on transmission planning and cost allocation, which aims to prompt utilities and grid operators across the country to more forward-looking, comprehensive, and cost-effective planning for large electric transmission lines and better account for the broad benefits those wires provide. Almost three years in the making. It was voted on 2-1, with the two Democratic members appointed to the committee voting yes and the lone Republican opposed.
FERC Chairman Willie Phillips said the aging grid, increasing severe weather, growth in demand from new manufacturing industries, data centers, increased electrification as well as the changing generation mix all threaten reliability as high-voltage transmission lines that help deliver power to The need for it has fallen to a record low.
“This rule cannot come fast enough. There is an urgent need for action to ensure the reliability and affordability of our grid,” Phillips said. “We simply will not be able to address these converging challenges and continue to provide the reliable, abundant, and affordable energy that the American people depend on.” Without a clear-eyed, long-term, forward-looking approach to transportation planning.”
But Commissioner Mark Christie, a conservative former Virginia utilities commissioner, strongly objected to the rule, calling it “a pretext to advance a sweeping policy agenda that Congress never agreed to” and that it would “facilitate the widespread transfer of wealth from consumers to consumers.” Profit is private interests.”
Christie has long opposed transportation cost allocation plans that he claimed would force customers in some states to pay for their neighbors’ pro-renewal policies.
“I was fully prepared to vote on this final rule if it was a bipartisan compromise, and if it maintained the state role that everyone sitting here voted for two years ago,” he said.
The genie and the bottle
The sprawling rule requires transit operators to conduct transportation planning at least every five years, and look over 20 years using “the best available data to develop informed projections” of needs, according to a staff presentation.
To determine these transmission needs, providers need to consider state laws and regulations, utility planning documents, fuel cost trends, power plant retirements, requests from developers looking to connect to the grid, as well as “policy objectives and corporate obligations.” They should also consider “network augmentation technologies,” a set of potentially cost-saving tools common in other countries that has been slow to take root in the United States, despite years of urging from supporters, as well as identifying opportunities to upgrade lines. current. And their capabilities, which are called “right size”.
Transmission providers, including utilities and organizations that operate the grid in most parts of the country, are also required to use a list of seven economic and reliability benefits as they evaluate and select long-term regional transmission projects as well as create an evaluation process with transparent selection criteria that is not “discriminatory or preferential.” Unjustifiably, it aims to ensure the selection of more efficient or cost-effective long-term regional transportation facilities and seeks to maximize benefits while accounting for costs over time without over-building transportation facilities.”
Christie criticized those “mandatory inputs” and said that countries did not have the ability to agree to those standards.
One of the major problems FERC is trying to solve is that although construction of large transmission projects has almost stopped, utilities in many parts of the country are on a construction spree of smaller — potentially duplicative and inefficient — projects that are easier Get them approved and paid, and increase customer bills.
“The absence of this type of regional transportation planning results in a gradual expansion of transportation that addresses transportation needs in the relatively near term,” the staff presentation said. “The status quo approach results in transport providers investing in relatively inefficient or less cost-effective transport infrastructure, with costs ultimately recovered through jurisdictional commission rates. This dynamic, among other things, results in transport customers By paying more than is necessary or appropriate to meet their transportation needs, customers lose benefits that outweigh their costs, resulting in less efficient or cost-effective transportation investments.
For example, supporters of the new rule point to the hundreds of millions of dollars in transmission costs that would result from the closure of a power plant in Maryland in the area overseen by PJM Interconnection, the nation’s largest grid operator, as an example of poor planning.
“It is hard to imagine that the district would not have found a more cost-effective solution had it begun planning for this retirement along with other anticipated shifts earlier,” said Democratic Commissioner Allison Clements, who took over for Christie over his opposition. . She said he was pressing the commission to take a “perilous journey” to determine appropriate public policies to create transportation requirements.
She said: “All transportation needs are inherently affected by state policies in all their fields.” “The reality is that enormous amounts of money will be spent investing in transportation regardless of whether it is done under this new rule or not.”
She said the new rule will protect customers from the expensive and intermittent transmission build-outs that occur in much of the country now.
“It’s not all about politics,” she said. “It is not the Commission’s job to try to force the genie that is energy conversion back into the bottle. It is our legal responsibility to protect consumers in light of what is going on in the world around us.
Neil Chatterjee, former Republican head of FERC, Published on X that he would have voted for the rule if he were still a member of the committee.
“The @ferc rule was voted down 2-1 today, but that doesn’t mean it’s a partisan rule,” he wrote. “If I had written this rule as president, would it have looked exactly like this? Of course not. But it would have been within the scope. Making regulations is difficult.”
“The benefit of having a large network”
Competitive transportation providers and clean energy groups celebrated Monday. Organizations ranging from the American Council on Renewable Energy and the National Audubon Society to Conservation Energy Network and Americans for a Clean Energy Grid issued statements praising the order.
Some renewable energy organizations have privately questioned whether a unanimous vote campaign might lead to a more relaxed rule for Christie’s inclusion. That might have left states with big renewable energy targets, paying all the transmission costs needed to absorb them, as New Jersey is doing for its planned offshore wind buildout, even though that power generation could mean cheaper, cleaner electricity for its neighbors as well. Along with other benefits.
The US Department of Energy found a “urgent need” for new transportation infrastructure across the country to relieve congestion and improve reliability. Grid congestion costs electricity customers billions of dollars annually, according to some reports. Given the more diffuse nature of renewable energy, moving it from where it is produced to where it is needed, as is the case with the vast amount of wind power in the Great Plains, can require large, multi-state transmission lines.
“Families and businesses are paying the price for the failure of utility and grid operators to meet our critical electricity infrastructure needs,” said Heather O’Neill, president and CEO of the United National Advanced Clean Energy Association. “Building more multistate transmission lines will eliminate traffic congestion on America’s electric highways and unlock our ability to keep up with our growing energy needs.”
Justin Vickers, a senior attorney with the Sierra Club, said the rule appears firmly within FERC’s jurisdiction, despite Christie’s concerns to the contrary.
He added: “I think the Commission stands on very strong foundations here.” “This is a way to maximize the benefits of living in a big country. We can send power across the country. It increases reliability and lowers the price. That’s the benefit of having a big grid. … Let’s take advantage of it.”
The Edison Electric Institute, which represents investor-owned utilities, said it was “disappointed” that the Federal Communications Commission declined to include a “right of first refusal” policy for some transmission projects, which would have given its members first right to some lines. The organization also said the base lacks “regional flexibility to evaluate project benefits.”
“A one-size-fits-all approach doesn’t work, because different regions have different needs and different states have different policies,” said Phil Mueller, executive vice president of the institute.
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Editor’s Note: This story has been updated to link to the text of the new rule from the Federal Energy Regulatory Commission. It was published Monday night.
