U.S. lawmakers in the next Congress, opening Jan. 3, are expected to sustain efforts to ease the construction of new electric transmission lines even after scoring major legislative victories in the past two years.
But advancing those reforms will require bipartisan buy-in, with Congress to be split in 2023 between a GOP-controlled U.S. House of Representatives and a Democratic-majority Senate.
Although Republicans have called to cut red tape for energy projects, electric transmission may be less of a priority for the GOP relative to fossil fuel projects. Republican lawmakers have also voiced concerns that recent Democratic legislation to ease transmission permitting could trample on state siting authority.
If Democrats want to speed transmission permitting to boost clean energy deployment, they will need to compromise with Republicans, policy experts said.
That number could grow as utilities plan to boost renewable energy development with support from the Inflation Reduction Act signed in August.
"In a divided Congress, if it's Democrats just wanting permitting reform for electric transmission lines to support renewables, then that gets almost impossible to pass," Tony Clark, a former member of the Federal Energy Regulatory Commission, said in an interview.
Democrats could cut a deal with Republicans by backing broader changes to the National Environmental Policy Act, or NEPA, to reduce permitting times and limit court challenges to major projects such as natural gas pipelines and other infrastructure, Clark said. But progressive Democrats rejected a recent proposal from U.S. Sen. Joe Manchin, D-W.Va., that sought to strike that balance, creating the potential for gridlock next Congress.
"I don't see a great pathway for huge changes at this point with divided government," the former FERC commissioner said. "So most of the activity is going to revert to the states and FERC as it usually does."
But with permitting reform a goal for both parties, others see the potential for progress.
"It's pretty clear that the incoming House Republican majority wants to prioritize permitting," said Xan Fishman, the Bipartisan Policy Center's director of energy policy and carbon management. "So, I'm sure that they will put forth legislation."
Still 'more to do'
Congress has made big strides over the past two years in supporting the buildout of the U.S. electric grid.
The Infrastructure Investment and Jobs Act of 2021 contained substantial funding for grid projects and gave FERC the ability to override state objections to major transmission projects in some instances. And the Inflation Reduction Act, or IRA, provided loans, grants and other federal money for transmission development.
Even with those accomplishments, Congress still has "more to do" on transmission, Fishman said.
Fishman praised provisions of a bill from Manchin, who chairs the Senate Energy and Natural Resources Committee. The legislation, which hit a wall in the 117th Congress amid opposition from Republicans and progressive Democrats, sought to cut NEPA reviews for major infrastructure projects down to an average of two years, less than half the current timespan.
"That's a huge improvement," Fishman said. "That is enough time to actually do a good thorough review and maintain high environmental standards and to have early public engagement."
Construction of new transmission lines will be key to deploying more renewable energy as the U.S. works to decarbonize the power sector. |
In December 2022, Manchin softened some of his bill's transmission provisions to address GOP concerns that an earlier version would take too much siting control from states. Under the new bill, FERC could approve transmission projects deemed to be in the "national interest" only if a state rejects the project or lacks the relevant legal authority to authorize those facilities.
The National Association of Regulatory Utility Commissioners has opposed Manchin's bill, saying it gives FERC too much authority at the expense of states.
Manchin's proposed changes could form the basis of new legislation in the new Congress. But if that package stalls, other transmission bills from the 117th Congress could be revived.
Lawmakers have introduced proposals to require FERC to examine its interregional transmission planning processes, establish minimum transfer capacity requirements between transmission planning regions, and broadly allocate the costs of large-scale regional, interregional and offshore transmission projects.
Some of the proposals mirror efforts already underway at FERC but could ensure the commission remains focused on those priorities regardless of which party helms the agency.
"I assume [Democrats] will continue to push forward on transmission," said Ari Peskoe, director of Harvard Law School's Electricity Law Initiative. "The IRA's passage emphasizes the need for more transmission."
Along with FERC-focused transmission bills, Congress could pursue a tax break for large transmission projects that was excluded from the IRA. Several lawmakers have backed a proposed investment tax credit for new transmission facilities estimated to drive an additional 30 GW of new U.S. renewable power capacity.
GOP hesitation
Although Republicans broadly back easier permitting for energy infrastructure, their stance on transmission is more measured.
A permitting reform bill introduced in September by Sen. Shelley Moore Capito, R-W.Va., made small mention of transmission, mainly adding it to the types of projects that could receive faster consideration under NEPA.
Key Republicans have also blasted the transmission cost allocation measures in Manchin's bill. The House Energy and Commerce Committee's top Republican, U.S. Rep. Cathy McMorris Rodgers, R-Wash., said the legislation "would inevitably lead to some states having to shoulder the costs for transmission lines to elite coastal cities, with no actual benefit to their own states."
In a recent interview with Fox News, U.S. Sen. Kevin Cramer, R-N.D., said Manchin's bill would amount to "federalizing the electric grid" and would "socialize the costs nationally ... for very localized, Green New Deal-type of generation facilities."
Although both parties could reach a consensus on transmission, that effort could take time.
"The fact that the two sides are very far apart on permitting reform [means] we don't expect this to be an early area of agreement," said Christine Tezak, managing director of consulting firm ClearView Energy Partners. "We wouldn't rule out a potential compromise eventually but do not expect it early in the Congress."
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