By Jim Snyder - 02/10/10 06:20 PM EST
The bill also seeks to spread out the costs for those lines among a broader group of beneficiaries to encourage development. The idea is to connect high-population areas like coastal cities with wind and solar energy that’s often abundant in remote areas.
But in a Feb. 9 letter, a group of utilities attacks the Senate bill’s method for encouraging development of those far-away renewable resources.
"We think the goals of S. 1462 will best be served by deleting language that would allow [the Federal Energy Regulatory Commission] to approve or modify a submitted interconnection-wide transmission plan that may be inconsistent, or in conflict, with local and regional plans," the companies wrote to Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.).
The utilities also worry about how federal regulators would define who benefits from a transmission line and therefore would have to pay for some portion of its construction. Developers and customers should pay for the lines, the utilities argue.
"If developers and potential customers of the new resources don't have to pay the costs of transmission associated with their decisions, the price signal is lost and distant resources will have an unwarranted price advantage over local alternatives, including conservation investments or distributed renewable resources,” the letter states.
The companies that signed the Feb. 9 letter include: Alliant Energy Corp., Ameren Corp., Arizona Public Service Company, ConEdison Inc., DTE Energy Company, Entergy Corporation, Indianapolis Power and Light Company, Progress Energy, Salt River Project, Santee Cooper and Southern Company.
Supporters of spreading the costs more widely say it will speed development of renewable resources, like wind. More renewables mean fewer greenhouse gas emissions and less air pollution, which benefits everyone. Critics of the plan, these supporters suggest, simply don't want new competitors in their electricity markets.
It is a tough issue that goes beyond energy policy and gets to touchy questions about federalism and state rights. State regulators are wary of their federal counterparts encroaching on their authority and are a powerful lobbying force on Capitol Hill.
Transmission issues, though arcane, have tied previous Congresses in knots. After years of effort, lawmakers did give federal regulators so-called "backstop" siting authority in the 2005 energy law.
But they succeeded only in passing a weakened provision that gave the feds more power in certain designated zones. The 4th Circuit Court of Appeals in Virginia weakened the law further by saying that the FERC only had the authority to step in when state regulators had failed to act within one year. It could not, however, overturn a state's rejection of a proposed line.
The Senate bill gives federal regulators the authority to break an impasse over agreed-upon "high-priority" projects.
"The bottom line is we need more wires," said Bill Wicker, a Democratic spokesman for the Senate energy committee.
"The Interstate Highway System would have never been built by simply stapling together county and state road plans. . . . We aren't neglecting local and regional plans. They are the building blocks of a transmission plan of the future. But someone has to rationalize and integrate these plans if we are ever going to have a national grid."