Recent US policy reforms aim to enhance electric grid development with new transmission rules from FERC. Discussions with industry experts highlight challenges in infrastructure development, legal frameworks, and the urgent need for new transmission. Federal oversight of transmission siting and utility industry reactions are also examined. Rethinking congressional action on energy infrastructure and discussion on permitting reform and NEPA implementation in transmission regulation are key topics of the podcast.
Accelerating transmission projects where consumers suffer from lack of infrastructure is a priority for the Department of Energy
Comprehensive planning and reformed institutional capabilities are crucial for enhancing grid efficiency and meeting evolving energy demands
Robust, resilient transmission infrastructure is essential to address reliability concerns due to severe weather events and the transition to renewable energy sources
Deep dives
Key Policy Reforms in Energy Transmission
The Department of Energy proposed 10 National Interest Electric Transmission priorities to accelerate projects where consumers suffer from transmission lack. Orders 1920 and 1977 by the Federal Energy Regulatory Commission aim to expedite national grid build-out by addressing cost allocation and planning issues. These actions will impact transmission projects by streamlining processes and addressing critical infrastructure needs.
Historical Context of Transmission Regulation
The evolution of transmission regulation from a localized focus to regional markets post-restructuring highlights the need for comprehensive planning. Despite laws like the Federal Power Act, structural bottlenecks persist in multi-state transmission line investment and cost recovery. To enhance grid efficiency and address emerging challenges like renewable integration and load growth, reformed institutional and planning capabilities are crucial.
Urgency for New Transmission Infrastructure
The pressing need for robust, resilient transmission infrastructure stems from reliability concerns due to severe weather events and an aging grid. Transitioning to renewable energy sources and accommodating load growth necessitate expansive grid expansions. Reports project a doubling to tripling of US transmission capacity by 2035 to meet evolving energy demands and ensure grid stability.
FERC's Impact on Transmission Development
Federal Energy Regulatory Commission's approval of orders 1920 and 1977 signifies significant progress in jumpstarting transmission projects. While utilities expressed concerns about regional flexibility, the proactive planning mandate and streamlined permitting processes will facilitate transmission development. Court challenges may arise, yet the rules are poised to withstand scrutiny, enabling long-term grid enhancements.
Future Considerations for Transmission Legislation
Despite FERC's recent actions, congressional legislation remains essential to expedite the citing process and address interregional transmission challenges. Proposed law reforms could provide clarity, resolve interstate disputes, and streamline NEPA procedures. The alignment of governors, bipartisan support, and evolving market dynamics underscore the critical need for comprehensive transmission legislation.
Industry Response & Legal Implications
While utility groups raised concerns about FERC orders lacking regional evaluation flexibility, the initiatives signify a step towards grid modernization. Court challenges are expected, but legal experts affirm the rules' robustness. Congressional focus on permitting laws and NEPA reforms may further enhance transmission infrastructure, overcoming past regulatory hurdles and accelerating essential energy transition.
On May 8th, the U.S. Department of Energy proposed ten new “national interest electric transmission corridors” – a designation that allows the federal government to accelerate projects in areas where consumers are harmed by lack of transmission.
Days later, on the 13th, the Federal Energy Regulatory Commission released Orders 1920 and 1977. Both of the new rules aim to expedite the build out of the nation’s electric grid by tackling major issues such as cost allocation and long-term planning.
So, how will these actions from the federal government impact transmission projects? What are critics of the FERC rules saying? And why are these long-awaited reforms happening now?
This week host Bill Loveless talks with Rob Gramlich about the impact the new FERC rules will have on current and future transmission projects. Rob is the founder and president of Grid Strategies, a consulting firm focused on transmission and power markets. He has co-founded multiple organizations focused on power systems reliability and sustainability, including Americans for a Clean Energy Grid and the Working for Advanced Transmission Technologies Coalition. From 2001-2005, Rob served as an economic advisor to FERC chairman Pat Wood.
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