The Federal Energy Regulatory Commission’s proposal to revise its transmission planning and cost allocation rules will help increase power line development, according to Larry Gasteiger, executive director of WIRES, a trade group for utilities, grid operators and other companies in the transmission sector.
The United States needs an “enormous” amount of new transmission to help the country meet clean energy goals, Gasteiger said during a forum Thursday hosted by Americans for a Clean Energy Grid, an advocacy group that aims to expand and modernize the North American power grid. The forum, which brought together a wide range of stakeholders, focused on each group’s just-filed comments on FERC’s proposal.
WIRES supports FERC’s proposed requirements for holistic transmission planning, a state role in transmission cost allocation — one of the most “nettlesome” transmission issues — and increased transparency for local transmission projects, according to Gasteiger.
The trade group contends, however, that competition for regional transmission isn’t working.
“Our view is, we don't double down on something that's a failed policy,” Gasteiger said.
“To the extent the commission’s goal is to encourage the approval of a larger volume of regional projects, the practical difficulties and development delays associated with bidding processes are at odds with that goal,” WIRES said in its comments on the proposal.
Also, WIRES opposes FERC’s proposal to eliminate “construction work in progress,” which allows utilities to recover from ratepayers their construction and development costs as they are building a project instead of waiting to add it to their rate base after the project is in service.
CWIP helps transmission developers and protects utility customers from rate shock, according to Gasteiger.
Independent transmission monitors
Addressing another key issue, Gasteiger said WIRES is leery about the idea of having independent transmission monitors oversee transmission planning, an issue that FERC is addressing in a separate proceeding.
Monitors could lead to delays and litigation, according to Gasteiger. “One of the last things we need in an effort to try to get transmission built in a timely basis is a lot more process, or things being injected into the process that create trip wires for projects to not move forward,” Gasteiger said.
The Clean Energy Buyers Association contends that independent transmission monitors would help spur transmission development, not hinder it, Adrienne Mouton-Henderson, CEBA’s director of market and policy innovations, said during the forum.
“I think it's a helper. I think it is a way to regionally plan in a more sophisticated way,” Mouton-Henderson said, noting that there had been opposition to independent market monitors that oversee wholesale power markets.
“An independent transmission monitor could help protect against transmission planning and/or cost allocation proposals that might be based on discriminatory or inefficient criteria,” CEBA said in its comments.
Breaking the “uncertainty cycle”
FERC’s transmission proposal is closely tied to a separate proposal aimed at unclogging grid interconnection queues, according to Adam Stern, Enel North America’s manager of regulatory affairs. Because so few regional transmission lines are being built, the transmission system is getting expanded via transmission lines that interconnect generating projects to the grid, creating an “uncertainty cycle,” he said.
With a lack of new transmission, interconnection projects get larger and more expensive, knocking proposed generating projects out of interconnection queues, Stern said. This, in turn, makes grid planners hesitant to include planned generation in their planning models, he said.
“Including all generator interconnection customers in regional planning models is necessary to find the transmission solutions that optimally meet all needs,” Enel, a renewable energy developer, said in its comments.
The Sustainable FERC Project, a group housed at the Natural Resources Defense Council, and other environmental groups generally support FERC’s proposal, according to John Moore, the project’s director.
FERC should set a minimum set of benefits transmission planners must consider, according to Moore. The group and others also backed proposed scenario and portfolio planning, he said.
“The failure to require transmission planning entities to plan for the multiple known, calculable benefits of transmission results in piecemeal and sometimes redundant transmission investments that can overburden generators and fail to maximize efficiencies for the benefit of consumers,” Sustainable FERC said in joint comments with groups including the Sierra Club and the Environmental Defense Fund. “Without getting benefit assessment requirements right, no reform effort can succeed.”
Ensuring adequate planning in non-RTO areas
FERC should set minimum standards for non-regional transmission organizations where transmission planning is often “an afterthought,” according to Simon Mahan, the Southern Renewable Energy Association’s executive director.
“Many states throughout the South include some form of integrated resource planning … but these processes are not robust enough to provide adequate transmission planning,” SREA said in its comments. The problem also occurs in the Midcontinent Independent System Operator’s southern region, which includes Louisiana and Mississippi, according to the group.
No time to waste
FERC is facing an enormous challenge in revamping transmission planning rules, but it’s off to a rocky start with Commissioner James Danly voting against the initial proposal, according to Gasteiger.
Gasteiger said he is concerned FERC could end up with a final rule supported by only three of the agency’s five commissioners, which could be less legally durable.
Not only does the U.S. need large amounts of new transmission, it needs it in record time, he said, noting transmission projects can take up to a decade to get built.
To meet clean energy timeline goals, “You’ve got to go with the tried and true,” Gasteiger said. “This is not the time for bold new experiments in a lot of areas. We have to go with what we know works.”