By Valerie Volcovici
WASHINGTON (Reuters) – The Federal Energy Regulatory Commission (FERC) is expected to issue a final rule on Monday to address the crisis in U.S. electricity transmission, as the grid struggles to connect massive amounts of clean energy as demand rises.
The long-awaited rule will seek to ensure that a dozen fragmented U.S. regions adopt long-term plans to bring more transmission online. It will seek to coordinate state and local regulations and utility plans on ways to distribute the costs of the buildout among the states.
President Joe Biden’s administration is aiming for a carbon-free energy sector by 2035. To meet that goal, the country must more than double regional transmission capacity and increase interregional transmission capacity more than fivefold, according to a U.S. Department of Energy study in November.
The US also needs to reverse a steady decline in transmission investment, the study said.
WHY IS THIS RULE IMPORTANT?
Boosted by fiscal stimulus in Biden’s 2022 Inflation Reduction Act, the queue of power generation projects waiting to connect to the grid currently stands at about 2,600 gigawatts, twice the amount of generation from the current fleet of U.S. power plants.
Researchers at Princeton University have found that the speed of transmission construction must double compared to the past decade or at least 80% of the potential emissions reductions enabled by the IRA will be lost.
Meanwhile, the demand for energy is increasing.
“The current situation is a spike in demand, driven not only by the electrification of key industries such as mobility, but also by technological advances such as AI (artificial intelligence) and the accelerated development of data centers,” said Allie Kelly, executive director. from The Ray, a non-profit organization focused on sustainable infrastructure.
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U.S. transmission is also susceptible to increasingly intense storms and heat waves, making investments in a more sustainable system important.
WHAT WOULD THE RULE DO?
The rule, as initially proposed, would force states, regional transmission organizations and utilities to work together on 20-year plans for approving new transmission projects.
It would also likely require planners to establish a clear process for how transmission lines are selected and paid for by consumers in different states.
Some have called for a rule defining who would be the beneficiaries of a transmission project.
Some regional organizations, such as the Midcontinent Independent System Operator in the US Midwest, have already begun transmission planning and new projects, while others are lagging behind. The rule is expected to force all regions to take steps to ensure they can meet U.S. transmission needs.
“The goal is to stimulate more transmission investments from the utility sector and push them to consider long-term changes in terms of clean energy and demand growth,” said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School.
WHO IS RESISTANT TO THESE CHANGES?
Some utilities and Republican states have pushed back against the idea that FERC would dictate cost sharing for major projects and that some states would have to pay for transmission for another state’s clean energy policy.
WHAT ELSE IS THE ADMINISTRATION DOING IN THE FIELD OF TRANSMISSION?
The DOE recently unveiled new measures aimed at increasing U.S. transmission capacity. Last month it said it will upgrade 100,000 miles (160,930 km) of transmission lines over the next five years and the administration finalized a rule aimed at making federal permitting for new transmission lines more efficient.
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Energy Secretary Jennifer Granholm said the DOE would also spend more than $330 million to support a new 300-mile transmission line between Idaho and Nevada, which will bring 2,000 megawatts of transmission capacity to the West.
This week, the DOE identified 10 regions without access to electricity where it will fast-track approvals to expand transmission lines and provide billions of dollars in federal loans.
