FERC Transmission Reform: A New Year's Resolution?
Jan 9, 2024
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Ari Peskoe, from Harvard Law School, dives into FERC's pending transmission reforms, discussing the need for expanded infrastructure, challenges in current planning systems, and legal hurdles expected. Topics include the impact of transmission regulations on clean energy growth, concerns around cost distribution, and the role of state involvement in planning amidst political debates. The podcast explores the complexities of utility decision-making, the importance of stakeholder diversity, and the need for flexibility in reform while addressing legal vulnerabilities and proposals for connectivity improvements in transmission infrastructure.
FERC's pending reforms aim to expedite transmission line expansion to facilitate clean energy growth.
Electric utility industry control impedes necessary transmission infrastructure development despite increasing electricity demands.
Deep dives
Need for Transmission Infrastructure for Renewable Energy
The increasing demand for electricity, driven by factors such as the move to electric-powered cars and homes, necessitates the development of new long-distance transmission lines to deliver power reliably to consumers. The availability of clean energy sources like wind and solar highlights the importance of building transmission infrastructure to tap into these resources. Recent weather-related power outages underscore the critical role of transmission in maintaining system reliability and affordability amidst rising electricity needs.
Challenges in Building New Transmission Lines
The electric utility industry's control over transmission development processes poses a challenge to building new lines, especially concerning access to renewable energy sources. Utilities may prioritize projects that serve their interests over those benefiting consumers, hindering the development of necessary transmission infrastructure. Limited forward-thinking projects and the focus on short-term solutions instead of long-term planning contribute to the difficulty in constructing new transmission lines.
FERC's Transmission Planning Reforms and Industry Response
The Federal Energy Regulatory Commission (FERC) aims to update transmission planning rules to align with long-term energy trends and increasing electricity demands. FERC's proposed reforms emphasize long-term planning horizons, considering a broader range of transmission benefits, and involving state regulators early in the planning and cost allocation processes. However, the industry's resistance, political polarization, and legal challenges indicate potential obstacles to implementing FERC's transmission reforms, with debates centered around resource mix changes and cost allocation strategies.
Ari Peskoe, director of Harvard Law School’s Electricity Law Initiative, discusses FERC’s pending reforms to the electric transmission development process in the U.S., and legal challenges they'll likely face.
Description
Nearly two years ago, the U.S. Federal Energy Regulatory Commission proposed a set of regulatory reforms to speed a much-needed expansion of the nation’s network of long distance electric transmission lines. FERC’s final rules, which are likely to arrive this year, are expected to substantially update the framework under which transmission lines are planned and paid for, and pave the way for the growth of clean energy. Yet FERC’s reforms come at a time when the future of the electric grid has become the focus of fierce partisan debate, and legal challenges to FERC’s proposed rules are expected.
Ari Peskoe, director of Harvard Law School’s Electricity Law Initiative, explores the need for a rapid expansion of the nation’s transmission infrastructure, and why the industry’s existing framework for transmission development has not been able to deliver the necessary pace of development. He discusses FERC’s proposed rules to govern transmission planning and the sharing of transmission costs, and how a final order might endure expected legal challenges.
Ari Peskoe is director of Harvard Law School’s Electricity Law Initiative.