It is time for the Federal Energy Regulatory Commission to take the next big step to encourage and facilitate large-scale transmission projects seen as pivotal to achieving decarbonization and climate goals set by the Biden administration, nearly a dozen former commissioners said Jan. 27.
The current transmission planning regime has fallen far short of expectations with very little of what is planned getting built and not a single interregional transmission line breaking ground. This is despite provisions in FERC Order 1000, issued in 2011, specifically requiring grid operators to plan new interregional projects.
Eleven former FERC members, whose tenures collectively spanned from 1988 to 2019 and of which nine spent time in the chairman's seat, expressed an urgent need for FERC to give its transmission planning and cost allocation rules a fresh look and usher in new regulations that better address the climate crisis and transformation of the generation mix.
"There is no climate plan that is serious if it does not envision a significant interregional transmission upgrade to the grid, ... and I think it's imperative for FERC to lead on this because this is interstate commerce, these are sales for resale and, most importantly, it's in the national public interest," said Pat Wood, CEO of Hunt Energy Network and FERC chairman from September 2001 to July 2005.
Wood, along with eight of the other former commissioners, joined a webinar Jan. 27 hosted by Americans for a Clean Energy Grid. The webinar coincided with the release of Americans for Clean Energy Grid's 105-page report calling on FERC to launch a new rulemaking effort aimed at boosting interregional transmission buildout to the levels needed to avoid the worst effects of climate change.
Grid needs
Noting the Biden administration's ambitious plan to eliminate carbon emissions from the grid by 2035, Norman Bay, who held the gavel at FERC from April 2015 to January 2017, said the federal government had a 62% delta to overcome as about 38% of electricity in the U.S. in 2019 was carbon-free.
"The best sites for renewables oftentimes are located far from load, so transmission will be needed to help us basically decarbonize the grid," said Bay, now a partner at Willkie Farr & Gallagher. "There's not a lot of time here because building transmission, as we all know, takes a lot of time, and so we have to act with a sense of urgency."
FERC Order 888 kicked off "a sea change in the way our transmission system works," former Chairman Betsy Moler said of the order issued nearly 25 years ago under her leadership that mandated open transmission access by utilities and promoted the concept of the independent system operator.
"I'm proud of the initiative, ... but in my humble opinion, it still has lots of benefits that it can provide both from a reliability point of view and from a consumer point of view if we take the next steps," Moler said. Those next steps, she said, should "facilitate more access for the new actors, new players, new types of resources, interregional transmission, and encourage further development of an even more robust, interdependent and new generation of power supply."
James Hoecker, senior counsel at Husch Blackwell and a FERC chairman from 1997 to 2001, asserted that the electric power grid would need to double in size to accommodate electrification of transportation, heat and other industrial processes. "Even taking into account [distributed energy] and energy efficiency, the doubling of electricity from wind and solar between now and 2035 augurs very strongly for major expansion of the grid," Hoecker said.
Certainty, transparency
Curt Hebert, an attorney with Brunini, Grantham, Grower & Hewes who was with the commission from 1997 to 2001 and helmed the agency for a seven-month stint in 2001, was confident FERC would move forward on transmission under Chairman Richard Glick.
"Most of the problems created by renewables and distributed energy resources do have workable solutions, and I think FERC will find that and continue to move down that road … to create the grid that we all need," Hebert said.
He stressed that project developers needed certainty. "As investors, they don't want to be a part of a development that's going to be stopped or slowed, and so we need incentives, we need that regulatory consistency and certainty if the financial markets and investors are going to take on transmission projects," Hebert said.
Nora Mead Brownell, a commissioner from 2001 to 2006, urged the current slate of commissioners to encourage new transmission technologies that could broaden planning data sets and assumptions and to work with the Department of Energy to analyze that data to ensure consistency in actions.
Though siting and permitting transmission remains an arduous task rife with litigation, she contended that more scientific, data-driven decisions along with consistency between and among regions "would go a long way to providing some confidence to the consumers and the people who have to pay for this."
Jasmin Melvin is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.