Building transmission takes forever. The Biden administration is pushing to change that. – Pennsylvania Capital-Star
The SOO Green electric transmission project, a 350-mile high-voltage line between Mason City, Iowa, and Plano, Illinois, was proposed in 2018 to deliver renewable power and to better connect the nation’s two largest power markets. The project won approval from Iowa regulators this fall.
The developers of the line, which will link wind and solar power produced in the area overseen by the Midcontinent Independent System Operator with 65 million customers in PJM, the largest U.S. electric market, are using mostly existing rail rights of way and burying the wire underground to sidestep fights over land acquisition, visual aesthetics and other issues that have bedeviled other transmission projects.
That’s why Raj Rajan, vice president of project development for SOO Green, which is still waiting for interconnection agreements from MISO and PJM and Army Corps of Engineers permits, chuckled when he was asked why that novel approach intended to shave time has still taken more than five years to get off the ground.
“Five years can be considered rapid speed in transmission development,” he said.
Indeed, even for a nation that has struggled to bring aging roads, bridges, rail lines and other infrastructure up to par, electric transmission lines take a long time to build.
However, the Biden administration’s Department of Energy is keenly aware of how crucial the pace of transmission expansion is to a reliable grid increasingly beset by severe weather, alleviating pockets of high prices and congestion and achieving federal and states’ decarbonization goals. Energy Secretary Jennifer Granholm says the nation’s grid needs to double to achieve 100% clean electricity by 2035.
And, armed with billions in dollars of loans, grants and other funding to improve siting and permitting and help get projects up and running, the agency is making what experts call a historic push to invest in American transmission.
“We have to vastly expand the transmission network across the country and fortunately the Department of Energy has a number of tools to help private industry, states and tribes to move forward in getting the transmission they need,” said Dylan Reed, a senior adviser at the DOE’s Grid Deployment Office, which was launched in 2022 in part to expand the transmission system.
Why they take so long
A poster child is the SunZia project, a wind farm and 550-mile high-voltage line between central New Mexico and south-central Arizona. SunZia, which crosses 11 counties in two states, including federal, state and private lands, got a crucial federal Bureau of Land Management approval late last spring, 17 years after it was proposed. Fourteen state and federal agencies or military bases were involved in the project.
“Navigating and completing permitting, land negotiations and commercial structuring was a very complex and challenging process that led to the extended timeline from conceptualization to construction,” said Kevin Wetzel, a vice president at Pattern Energy, which acquired the SunZia project in 2022.
Generally, it can take 10 years or more to build new high voltage transmission lines in the U.S. In June, federal officials were on hand for the Wyoming groundbreaking of the TransWest Express project, a 732-mile line that was “mired in bureaucratic delays for nearly two decades,” Politico’s E&E News reported.
Generally, the problems plaguing transmission construction come down to what Rob Gramlich, president of Grid Strategies, a Washington consulting firm focused on the electric grid and power markets, calls the “three P’s”: planning, permitting and paying.
How larger transmission projects are planned can vary significantly across the country, depending on whether a given area is part of a regional transmission organization, large, generally (though not always) multistate organizations that coordinate the flow of electricity and plan transmission upgrades, or whether they’re outside of an RTO.
Improving regional planning and cost allocation based on broader benefits of transmission expansion are the main thrusts of a proposed Federal Energy Regulatory Commission rule that many groups and state lawmakers are urging the agency to finalize. It’s intended in part to “address concerns that current regional transmission planning may be resulting in piecemeal and inefficient development” of new regional transmission lines.
“Despite FERC’s various attempts to encourage regional transmission planning, the results have been lackluster,” the nonprofit advocacy group Americans for a Clean Electric Grid, which is pushing to expand and modernize the nation’s grid, wrote in a report last summer grading transmission planning across the country. Generally, transmission buildout has followed the process of interconnecting new resources to the grid and hasn’t been sufficiently forward looking, failing to account for the big shifts happening in power generation and projected demand growth, critics contend.
“The generator interconnection process is reactive and does not holistically plan for future needs or evaluate the most efficient transmission solutions to maximize transmission’s economic and reliability benefits,” the ACEG report says. “It is not achieving economies of scale and is failing to maintain just and reasonable rates.”
Most of the Southeast, for example, which is dominated by a handful of large utility companies, is not part of a regional transmission organization and got the worst grade for transmission planning in the ACEG report. There, the report found, “a key issue for regional transmission planning is the lack of access to information and transparency, limiting the effectiveness of transmission planning and stakeholder engagement.” The planning entities that do exist “largely aggregate their utilities’ plans and periodically brief stakeholders without seeking significant input and often not sharing sufficient data, methods, or assumptions to enable an assessment of the projects.”
There can be competing interests, with existing utilities often lacking incentives to cooperate on regional projects that could have broader benefits to reliability and cost. Some states or communities may be unwilling to host or pay for transmission that is seen as benefiting someone else or furthering a policy agenda leaders don’t endorse.
How costs are allocated, in particular, is both a “source of delay and a reason it doesn’t happen,” Gramlich said of transmission projects, adding that “nobody starts proposing a line if they’re never going to get paid back for it.”
Then there’s the permitting
Unlike natural gas pipelines, there’s no similar federal permitting regime for electric transmission, Gramlich noted. Rather, an assemblage of state, local and federal agencies might be involved in issuing permits for an electric transmission project, with no entity coordinating all the federal agencies that might be involved, as FERC does for interstate gas pipeline projects.
The Department of Energy is changing that by proposing to use existing authority under the Federal Power Act to act as the lead agency for coordinating permitting to ”expedite the siting, permitting and construction of electric transmission infrastructure.” The program sets a two-year deadline for agency action.
The DOE is also pushing to use the secretary of energy’s existing powers to designate “national interest electric transmission corridors” if capacity constraints or congestion are negatively affecting electric consumers. The designation can unlock more than $4 billion in federal financing programs and allows FERC to grant permits if state authorities fail to act on an application for more than a year, deny an application or lack the authority to site the line.
That’s in addition to efforts in Congress to reform environmental permitting and federal grants for state, local and tribal governments to “accelerate and strengthen electric transmission siting and permitting processes.” All told, there’s $760 million from the Inflation Reduction Act that can be used for studies, modeling, environmental planning and analysis on alternatives, the DOE said in a news release.
“Permitting transmission takes too long and there are a number of tools the federal government can use to make that process more efficient,” said Reed, the DOE official.
‘Getting transmission policies implemented’
The Department of Energy is also trying to juice transmission construction directly, through billions of dollars in grants and loans, such as the Transmission Facilitation Program, a revolving fund in which the DOE will serve as the “anchor customer,” buying up to 50% of a planned line’s capacity rating for up to 40 years, then sell the contract to recover the costs.
The program increases investor confidence, reduces risk for developers and prompts other customers to buy capacity, the agency said in a news release.
In October, the administration announced that it had made a $1.3 billion commitment to three transmission lines in six states (Nevada, Utah, Arizona, New Mexico, New Hampshire and Vermont).
“This administration is getting transmission policies implemented,” Gramlich said. “They’ve got a very effective Grid Deployment Office created and staffed and running and they are getting important policies implemented.
But even with the federal action, there’s a lot of work left for states, particularly those with ambitious clean energy goals.
“I don’t think we can count on DOE to keep pushing everything along,” said Christina Hayes, a former FERC attorney and executive director of Americans for a Clean Energy Grid. “There’s tremendous value in states collaborating with their neighbors.” States that are in regional transmission organizations already have formal working groups, like the Organization of MISO States and the Organization of PJM States.
And in non-RTO areas, state regulators are increasingly focusing on transmission in resource planning, when utilities present plans for how they’ll meet customer demand, Gramlich said. “It tends to be cheaper to build transmission than to build all the generation locally,” he said.
Some states, like New Mexico and Colorado, have established their own transmission authorities, Gramlich added. And many East Coast states are exploring how to cooperate on the transmission upgrades needed to bring all the offshore wind power they plan to build ashore.
“Electrons don’t recognize state boundaries,” Hayes said. “When you’re thinking about what’s good for folks in your state it’s helpful to think about what’s good for folks in your region.”
Originally published at www.penncapital-star.com,by Robert Zullo