Electricity transmission deserves bipartisan focus
The developing bipartisan infrastructure agreement appears to offer significant support for improving and modernizing our electricity grid. This is great news for a country with a power system that has been strained by extreme weather and needs significant investments to meet growing electricity demand with clean sources. To deliver the best transmission benefits quickly and make the most of public investment, the president and Congress should reform how this critical infrastructure is planned and sited.
Grid infrastructure includes the distribution wires that bring power to homes and businesses and large high-voltage lines that cross the country. The latter will bring large national benefits for minimal investments. It links areas that can provide low-cost renewable power to where consumers live. And in times of emergency, they can link a region with too little power to one with more. The 2019 Interconnection Seams Study found that increasing the capacity of interregional lines results in lower-cost systems. The benefit-cost ratios of the transmission lines range from 1.3 to more than two, depending on the configuration and resource mix. That is, assuming these lines can be built.
For transmission entrepreneurs, connecting willing sellers to willing buyers is complicated. Siting decisions are made state by state or county by county — meaning that one locality can stop development of a line. Many siting boards have narrow restrictions for what counts as a beneficial line. As a result, transmission that provides benefits across a broad region due to the lower costs and higher resilience is rejected because the local benefit does not meet a certain threshold. Those rules made sense when state and local interests dominated the power system, and there was little transmission between states and regions. Now, however, they are antiquated.
Even when private investors are engaged, siting and permitting challenges stall the deployment of this crucial infrastructure. Interstate lines face the most regulatory barriers. A recent report details three interstate lines that were proposed but not built in the last 10 years primarily due to state permitting issues. That prevented more than 7000 MW of transfer capacity, limiting access to lower-cost energy and renewable resources. This is just a small slice of the issue. Americans for a Clean Energy Grid recently reported on projects “Ready to Go” with 42,000 MW of capacity that are now nearly shovel ready — some of which have been delayed more than a decade by siting issues.
Congress and the president could fix this. Natural gas infrastructure does not face these same problems. Rather than having a state-by-state siting process, interstate natural gas pipelines developers seek project approval from the Federal Energy Regulatory Commission (FERC). And while FERC has been too willing to favor the interest of pipeline companies instead of landowners in applying eminent domain, it is clear that having a one-stop shop for infrastructure siting makes building easier.
Granting primary authority to FERC for certain types of transmission lines, and clearly articulating landowner protections within that process, is an important step for pursuing electrification and renewable energy goals. Study after study shows that high-capacity interstate lines provide the most bang for the buck for consumers overall. Infrastructure legislation could grant authority directly to FERC for these specific kinds of lines. This is an appropriate and narrow role for federal authority in pursuit of national interests and avoids the delay and the inefficiencies of existing siting authority. Moreover, it would create an opportunity for private expenditure and ensure any federal investments can be spent effectively.
Congress has tried to address these siting challenges before. The Energy Policy Act of 2005 allowed the federal government siting authority for projects planned within National Interest Electricity Transmission Corridors, designated by the Department of Energy, if the states delayed their decision. But in the 15 years since, not even one line has been built. Fixing this authority would also help, by expanding analysis criteria and clarifying congressional intent that state permitting denials are also subject to FERC backstop authority.
Of course, FERC’s history of eminent domain authority is not without issue. Under the Natural Gas Act’s expansive siting authority, FERC’s eminent domain process has abused private property rights. Landowners deserve reasonable notice, clear process and timely compensation. Congress can create federal transmission siting authority that avoids all of the problems with Natural Gas Act eminent domain authority.
Transmission siting is a climate issue and an infrastructure issue, and needs bipartisan support for enduring and necessary change. As Congress examines mechanisms for supporting transmission expansion, it should consider granting FERC siting authority (with appropriate eminent domain protections) over a narrow scope of interstate high capacity to build the grid we need.
Liza Reed is the research manager for low carbon technology policy at the Niskanen Center.
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