The Department of Energy plans to buy capacity on three transmission projects being developed by National Grid, Berkshire Hathaway, Grid United and their partners, a move designed to facilitate project financing, DOE said Monday.
The projects were selected as part of a solicitation issued by DOE for access to the department’s Transmission Facilitation Program, a $2.5 billion revolving fund that was part of the bipartisan infrastructure law. The $1.3 billion in conditional commitments announced Monday marks the first time the program has been used.
Under the program, DOE can serve as an “anchor customer” for a transmission project by buying up to half of a project’s capacity and later selling the contract to recover the department’s costs.
The initial projects selected by DOE are:
- The Twin States Clean Energy Link, a roughly $2 billion, 1,200-MW high-voltage direct current bidirectional line between New Hampshire and Québec planned by National Grid;
- Southline Transmission’s first phase, a 175-mile, 1,000-MW transmission line from Hidalgo County, New Mexico, to Pima County, Arizona, being developed by Grid United, Black Forest Partners and Hunt Transmission Services; and,
- Cross-Tie, a $667 million bidirectional, 1,500-MW, 500-kV transmission line set to run about 214 miles between Utah and Nevada, planned by TransCanyon, a joint venture between Berkshire Hathaway and Pinnacle West Capital subsidiaries.
Construction could start on the Cross-Tie and Southline projects in 2025, putting them on pace to begin operating in 2027, a DOE official said during a media briefing Friday. National Grid could begin building the Twin States project in 2026 and bring it online in 2028, the official said.
The projects will improve grid reliability, help keep the power on during extreme weather, deliver more affordable clean energy and directly benefit rural and underserved communities, DOE Secretary Jennifer Granholm said.
In recent years, U.S. grid development has accelerated, according to Ali Zaidi, President Biden’s national climate advisor. Since Biden became president, ground was broken on 10 major transmission projects totaling 20 GW, the equivalent of 10 Hoover Dams, he said.
The project developers receiving funding via the Transmission Facilitation Program are required to develop community benefit plans, according to Granholm.
National Grid, for example, is partnering with Citizens Energy, a Boston-based non-profit group, to provide $200 million for the 33 New Hampshire and Vermont communities along the Twin States project’s route, including surrounding disadvantaged communities, according to DOE. The project is expected to cut net energy costs for disadvantaged communities by $470 million over the next 12 years, the department said.
National Grid also agreed to partner with local clean energy organizations in New Hampshire and economic development agencies in Vermont to support energy efficiency, electrification, low-cost financing and distributed generation projects, DOE said.
The Twin States project follows Eversource Energy’s failed Northern Pass transmission project, which would have delivered hydro power from Canada to New England, but faced significant opposition and was rejected in early 2018 by a New Hampshire siting board.
National Grid’s project stood out to DOE because the utility company engaged closely with affected communities, including by agreeing to put some of the line underground, according to the administration official.
The approach of using existing rights of way and “creative” rights of way that are less disruptive is finding success across the country, Zaidi said, pointing to projects such as Champlain Hudson and the Grain Belt Express.
“I think that will be an area of lower friction,” Zaidi said. “One of the things we're seeing with developers … is finding low-conflict [transmission] paths that connect low cost energy to consumers who are excited to see that translate into lower bills.”
DOE said it expects to release a second round of Transmission Facilitation Program funding in the first half of 2024 through a request for proposals that may include a combination of public-private partnerships, loans and capacity contracts, totaling $1 billion.