Our nation’s inadequate transmission capabilities prevent us from fully harnessing large quantities of low-cost American wind, solar, and other clean energy resources. We need to invest in transmission to fully realize America’s clean energy potential.
The grid needs modernization to support a 21st century clean energy economy—70% of transmission lines are over 25 years old and the American Civil Society of Civil Engineers ranked America’s power grid infrastructure an unacceptable D+. Where transmission has been developed to enable clean energy growth, customers have benefited.
The three Ps—planning, permitting, and paying—present challenges that have caused transmission expansion to lag, despite its many benefits. It can often take a decade or more to develop a new transmission line, while natural gas pipelines have been constructed 10 times faster.
Transmission planning and payment are governed by the Federal Energy Regulatory Commission’s (FERC) Order No. 1000, a rule that attempted to require regions to identify the most efficient or cost-effective transmission solutions to regional and interregional needs. However, Order 1000 has fallen short in implementation. At the level of Regional Transmission Organizations (RTOs—independent entities that operate and plan the transmission grid), transmission investment continues, but many cost-effective projects are not being identified through the regional planning processes. That has meant unnecessary rate increases for consumers. Currently, planning is done in silos, with different types of projects (such as reliability, economic, and public policy projects) assessed only for a single type of benefit. That creates an inefficient and piecemeal buildout of transmission. In contrast, proactive, holistic, and top-down regional planning that identifies the system’s long-term needs and efficiently plans and builds transmission maximizes customer benefits and optimizes transmission expenditures.
Interregional transmission planning is also flawed, particularly on the border or “seam” between the Midcontinent System Independent Operator (MISO) and Southwest Power Pool (SPP). The seam includes over 60 transmission interconnections, allowing electricity to flow between them. However, as a result of their different and sometimes conflicting market and operating rules and procedures, and the lack of a coordinated transmission planning process, the seam creates a significant barrier to the economic transfer of electricity between them. This inhibits the flow of existing low-cost renewable energy across the seam, the development of future renewable generation near the seam, and adversely impacts consumers, who face higher prices as a result.
Permitting, on the other hand, is typically the responsibility of each individual state. For example, if a proposed transmission line would traverse three states, each of those states could potentially veto the project and prevent it from getting built. Existing federal authority that could ensure the electric grid keeps pace with new, clean generation has been little-used.
We need reforms in planning, permitting, and payment, and at the levels of federal agencies, the RTOs, and the states for the U.S. to meet the clean energy goals the Biden administration and individual states have set.