Today’s grid operator and state regulatory approaches to transmission planning and generation interconnection are not up to the task of delivering a low-carbon grid at speed and scale.

While 544 GW of renewable generation lies in wait to interconnect to high-voltage transmission systems – nearly half of the capacity needed to meet a 90 percent clean energy standard – these projects face unreasonably high barriers due to conventional interconnection rules. Rather than investing in transmission planning that would more efficiently serve society’s economic and policy goals, today’s rules typically require every new generation resource to separately pay grid upgrade costs to interconnect their power plant the system, when there would be far greater societal benefit to view transmission planning and upgrades with a more holistic regional perspective. The Federal Energy Regulatory Commission (FERC) should exercise its authority and expand its capacity to require regional transmission expansion and simplified interconnection rules that support the realities of society’s policy goals and a 90 percent by 2035 clean energy standard.

Transmission networks can be planned in advance to accommodate a sensible mix of very low-cost renewable resources, creating net benefits for customers, and Congress should reform FERC’s electric transmission authority to support the changing electricity system in a cost-effective manner. To begin, cost-allocation should be driven by analysis of the benefits and balanced by a consideration of the negative factors beyond direct cost (e.g., land-use impact, landscape degradation, habitat disruption). Congress could give FERC a clearer mandate to enforce and expand Order 1000 (FERC’s regional transmission planning order), by requiring timely plans, accounting for public policy in planning, and allocating regional costs to beneficiaries where regions fall short.

Benefits should include quantifiable environmental, resilience, and public policy benefits, in addition to direct economic benefits. The basic idea is to codify the lax suggestions of FERC Order 1000. The Midcontinent Independent System Operator (MISO) Multi-Value Projects methodology is a model to consider building upon.

...adopting a more comprehensive, proactive regional planning approach in the rest of the country could reduce interconnection queue waiting times and improve the risk for developers...

Congress could also push FERC to act on cost-allocation for new multi-state transmission lines. Though these lines do not feature prominently in the 2035 Report, their benefits are clear from other modeling exercises. For example, FERC should encourage high voltage inter-regional transmission to access least-cost (and clean) resources, by requiring regional Order 1000 Planning Authorities to develop compatible models (incorporating state energy resource plans) and pursue interregional transmission where benefits exceed costs. Alternatively, Congress could vest DOE with authority to plan large interregional lines, reducing complexity of coordinating planning between regions. A more holistic cost benefit analysis of this nature can also help address the most common reason many important transmission lines have failed: disagreements between states over how to fairly allocate costs. For multistate lines, FERC could require states denying a regionally beneficial line to demonstrate certain criteria are met to justify denial, similar to the rate design structure used in the Public Utility Regulatory Policy Act.

U.S. Congress Affirm FERC’s authority for transmission cost allocation and planning for public policy impacts to the grid, including regions outside of ISOs/RTOs. Give particular attention to the federal clean energy standard, or in its absence state and utility clean electricity goals. Make clear the intention to reduce interconnection queue times and require beneficiary customers to pay their fair share.

U.S. Congress
Provide states with matching funds to pay for interstate transmission lines with demonstrable reliability, cost, and renewable integration benefits. Consider vesting DOE with authority to plan for and site interregional transmission lines to streamline development of the nation’s most crucial and beneficial long-distance transmission projects.

FERC
Exercise authority to require regional transmission expansion and simplified interconnection rules that support the realities of society’s policy goals and a 90% by 2035 clean energy standard.

FERC
Require regional Planning Authorities to develop compatible models (incorporating state energy resource plans) and pursue transmission where benefits exceed costs. Require states denying a regionally beneficial line to demonstrate certain criteria are met to justify denial.

FERC
Require regional transmission planning bodies created under FERC Order 1000 to propose to FERC multi-value transmission projects, accounting for state and federal clean energy policies, with Federal authority to promulgate a cost allocation methodology where regions fail to act.

While transmission infrastructure development has remained generally robust at an aggregate level, the types of transmission projects that are needed, and the use of rate treatments to incent them, must evolve to reflect the changes in market fundamentals.

FPA section 219(a) requires that the Commission provide incentive-based rates for
electric transmission for the purpose of benefitting consumers by ensuring reliability and reducing the cost of delivered power by reducing transmission congestion. While we are encouraged by the investment in transmission infrastructure to date, our evaluation of the Commission’s incentives policy indicates that additional reform may be necessary to continue to satisfy our obligations under FPA section 219 in this new transmission planning landscape.

CMU General Manager Jim Gillilan said local customers would notice a reduction in their bills after the transmission line is built, which he expected to be in 2022.

The U.S. accounts for 15% of the world’s total GHG emissions, making it the world’s second largest emitter.
Only 28% of U.S. GHG emissions are attributable to the electricity sector.
Today, 22% of America’s 1,047.6 gigawatt (GW) utility-scale, electric generation capacity is renewable, while 67% of our electrical capacity produces GHG emissions. In 2050, the U.S. Energy Information Administration projects that 60% of the generation mix will still produce GHG emissions. Replacing this projected emitting capacity with pollution-free renewable power will require nearly 30 GW of additional renewable capacity each year between 2020 and 2050, a roughly 50% increase above the current growth rate of U.S. renewables.

Qualifying technologies should include all current and future resources that meet emissions criteria, including enabling technologies like energy storage and expanded interstate, high-voltage transmission that accesses clean energy resources.

Since energy is an unavoidable expense, putting a price on carbon could also, at least initially, have a disparate impact on lower-income households. To prevent that outcome, any equitable carbon pricing program should be designed to avoid economic regressivity. One possible solution is to return revenue from carbon pricing to citizens in the form of a pro-rata carbon “dividend.”

Additionally, Congress should clarify federal backstop siting authority by restoring Congressional intent of the Energy Policy Act of 2005, which would encourage and accelerate investment and development of needed transmission infrastructure when that infrastructure is in the national interest and advances the objectives of a comprehensive climate plan.