Transmission’s Time in Congress

This is turning out to be a crucial year for renewable energy legislation in Congress. First, in rapid fashion compared to its usual pace, Congress in mid-February passed the economic stimulus bill, which included numerous financial incentives for wind and other renewables. Soon after, a trio of renewable issues were put on the legislative agenda: a national renewable electricity standard (RES), then climate change and, finally, transmission.

All three issues are closely intertwined. To solve the climate change problem, proponents of legislative action say we need to reduce carbon emissions through a cap-and-trade program. But other incentives are also needed to spur use of more renewable energy in power generation; hence the RES legislation. But a national RES requires still other measures for it to be successful; specifically, many states that have enacted RES legislation cannot meet RES targets without more transmission. Thus, at the national level, transmission legislation is also seen as key to renewables’ success.

The Challenge

For the wind industry, the need for new transmission has been obvious for some time. Last year, for example, the U.S. Department of Energy concluded that insufficient transmission was the biggest obstacle to meeting 20% of U.S. Electricity demand from wind by 2030. In addition, a white paper on the issue of transmission developed by AWEA and other groups notes that almost 300,000 MW of wind projects, more than enough to meet 20% of our electricity needs, are waiting in line to connect to the grid because there is inadequate transmission capacity.

To meet such challenges, transmission legislation would be intended to help clear the way for construction of a high-capacity, green superhighway system that would connect the renewable energy sites, often in rural areas, to the urban population centers where electricity demand is growing.

All of the legislation that has been proposed would tackle the “three p’s”: planning, paying, and permitting. First, the legislation would create a planning process for the eastern and western halves of the nation to design plans to develop transmission to access and deliver renewable energy. Second, in general, the legislation would set up a means to pay for the system by allowing the regions to propose a manner in which to allocate the costs of new transmission infrastructure; if they fail to do so, it would be done broadly across the region and spread, on a pro-rata basis, among all the users of the grid in that region. Third, all of the proposed bills would create federal siting authority to override state or regional objections, if needed.

Much of the new authority needed to get new transmission going would fall to the Federal Energy Regulatory Commission (FERC), which would be given clear authority to certify new entities to undertake the planning process, approve and, in some instances, create the cost allocation mechanism and authority to site transmission.

Proponents say these reforms are needed because the current system for planning, financing and building transmission dates back half a century. State utility regulators do not have the authority or the incentive to approve plans for transmission projects that do more than serve ratepayers in their own state, while no effective federal authority exists either, creating crucial problems given that new transmission infrastructure would need to cross state lines and serve customers in multiple states as well.

The Legislative Landscape

With transmission legislation having been introduced but not passed in the last Congress, the latest effort has been underway for many months. A number of energy groups and companies, including AWEA, the Energy Futures Coalition, American Electric Power, and the Solar Energy Industries Association, have been meeting in an effort to reach consensus on the outlines of a bill while coordinating with key Congressional offices. Both Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.) have called for action on the issue.

This month Reid and Senator Jeff Bingaman (D-N.M.), chairman of the Energy and Natural Resources Committee, separately introduced major transmission legislation, and Bingaman held a hearing on the issue March 12. In the House, the leader on transmission has been Representative Jay Inslee (D-Wash.), who has recently introduced a bill. Democrats in the House and Senate have been seeking Republican support, too.

The outlook for passage of transmission legislation is unclear. One problem is that it could get tied up in legislative wrangling over the RES and climate change. Democratic leaders in the House and Senate now are advocating putting all three measures into a single, omnibus energy bill. That could be a risky strategy, some renewable energy lobbyists believe, and it’s not clear yet whether, in the end, that course will be chosen. At this early stage, the three proposals are being offered, considered and debated separately.

Another complicating factor is that some utility interests do not believe a federal role is needed, and so they may try to block any bill giving FERC sweeping new powers. There also will be disagreements among transmission legislation proponents about whether coal-fired electric plants should be given access to the new transmission system that is specifically designed for renewable energy.

Nevertheless, balanced against those potential hurdles is a sense of positive momentum among renewable energy advocates. They believe that this year the political atmosphere is favorable toward renewable energy legislation and that Congress will be prodded into action.

Underscoring the importance of the issue, the WINDPOWER 2009 Conference & Exhibition, which takes place May 4-7 in Chicago, includes a whole lineup of sessions devoted to transmission. One of those, in fact, will examine the federal policy side of the issue (AWEA Strategic Transmission Policy) and will be moderated by AWEA Policy Director Rob Gramlich. In addition, given that transmission issues can get highly technical, for the first time WINDPOWER will include an introductory session on the topic, “Wind Power and Transmission.” Other transmission-oriented sessions include “Wind Integration Issues Today,” “Overcoming Transmission Roadblocks-Transmission Planning,” and “Grid Interconnection Rules and Queues.”

This article first appeared in the March 2009 issue of Windletter and was republished with permission from the American Wind Energy Association (AWEA).

Chris Madison is senior writer at AWEA.

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