ORIGINAL REPORTING: Billions And Climate At Stake In FERC Transmission Planning

As FERC’s transmission proposal sparks clashes, potential solutions emerge from MISO, elsewhere; Billions in transmission investment and the urgency of the climate fight are at stake.

Herman K. Trabish, November 7, 2022 (Utility Dive)

Editor’s note: All of the energy sector awaits FERC’s decision.

FERC’s proposal to reform transmission planning has provoked a confrontation over federal and state control of transmission expansion, prompting some stakeholders to call for new oversight.

But U.S. transmission’s 1% annual growth must more than double to an average of about 2.3% to meet federal climate goals, according to Princeton University’s September report, Electricity Transmission is Key to Unlock the Full Potential of the Inflation Reduction Act. With hundreds of billions in largely ratepayer dollars for transmission at stake, and potentially much more as climate crisis-driven extreme events worsen, proposed solutions to accelerate transmission building by the Federal Energy Regulatory Commission have sparked debate.

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FERC wants “to socialize the costs” of a “massive transmission build-out” for what many see as “an aspirational renewable future,” Commissioner James Danly, appointed by President Trump, said, adding that decisions on transmission are best made by the states hosting it. FERC is “not the Good Ideas Commission,” and its “pervasive, and invasive ‘reforms’” are “unjust and unreasonable,” and will lead to “protracted proceedings, litigation, and risk,” he wrote.

The FERC proceeding filings show “the electric system needs to evolve” to benefit regions and the U.S. climate fight, responded former FERC Commissioner John Norris, a President Obama appointee. “The economy has evolved into an international market, but too much power remains with local utilities to maximize their own assets’ value instead of building a more efficient system,” he said.

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New transmission is vital to the cost-effectiveness of federal plans for clean energy investments, Utility Dive recently reported. With a Senate permitting law now in doubt, FERC reform of planning factors like who benefits, who builds, who pays, and who does oversight is urgently needed to resolve impediments to development, stakeholders agreed – without agreeing on which reforms will work. FERC’s Notice of Proposed Rulemaking, or NOPR, seeks “forward-looking” long-term regional transmission planning, it announced April 21.

With generation and load now including growing penetrations of renewables and storage, and greater distribution system electrification, transmission planners need to use multiple scenarios that look out “at least 20 years” and are “updated every three years,” the ruling said. FERC also seeks streamlined coordination in regional and local transmission planning and interregional planning that allocates development costs among states using all benefits to ratepayers, the NOPR added. Finally, utilities’ right of first refusal, or ROFR, which is a first option to build transmission projects in their service territories, would be conditionally restored after being curtailed by 2011’s FERC Order 1000. That would limit the competition for transmission building sought by Order 1000, but it might streamline needed development, FERC said… click here for more

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