Feds want final say on grid projects

By ROSALIE WESTENSKOW, UPI Energy Correspondent

Senate leadership wants to override a recent court ruling and keep final authority over the national electricity grid in the hands of federal regulators -- a proposal some utilities, states and policymakers adamantly oppose.

In 2005 Congress gave the Federal Energy Regulatory Commission jurisdiction over the 300,000 miles of transmission lines that deliver the nation's power, but a recent ruling in the 4th U.S. Circuit Court of Appeals challenged that authority by granting states the final say on transmission projects within their borders.


Last week, though, Senate Majority Leader Harry Reid, D-Nev., introduced a bill that would give FERC ultimate authority once and for all.

"This is a critically important issue," Reid told fellow lawmakers Thursday.

The Energy Information Administration projects U.S. electricity demand will rise 30 percent by 2030, yet the nation has only expanded the grid's capacity by 6 percent since 1996. That spells trouble, Sen. Jeff Bingaman, D-N.M., chair of the Senate Energy Committee, said at a hearing Thursday.


"We will see twice the growth in production as transmission in the next decade if we stay on the course we're on today," said Bingaman, who has introduced draft legislation similar to Reid's.

Those who want to see the feds in charge of the grid say it will take national coordination to get the system up to speed.

"A single federal agency having authority … is the most efficient way to site major energy projects," said Jon Wellinghoff, FERC's acting chairman.

With federal oversight from Washington, energy projects can be synchronized with energy needs throughout the country, as opposed to a fragmented, state-by-state approach, said James Dickenson, chief executive of JEA, a Jacksonville, Fla.-based utility that delivers electricity to 409,000 customers.

"State commissions focus primarily on the needs of their states when they make decisions about transmission projects," he said.

But what's best for individual states may not be what's best for the nation, particularly because energy needs and available resources vary from region to region, experts said.

"This is a national problem," said Graham Edwards, president emeritus of Midwest ISO, a non-profit organization that works on grid issues. "We need a national solution."

Others disagreed, saying a federal approach will slow down the process by adding additional layers of bureaucracy.


"The federally coordinated approach is an oxymoron," said Sen. James Risch, R-Idaho.

Past programs led by the federal government to site energy infrastructure have spawned frustration, creating skepticism about the current grid proposal, said Sen. Ron Wyden, D-Ore.

"The process in respect to liquefied natural gas (pipeline placement) has been a disaster," Wyden said at Thursday's hearing. "We're going to need to work with (FERC) a lot more before I can approve anything like this."

Giving the energy commission power to override states also gives the federal government the ability to decide which populations benefit from transmission siting and planning and which do not, said Tony Clark, second vice president of the National Association of Regulatory Utility Commissioners, a non-profit organization that represents state public service commissions.

"Siting and planning issues are sensitive because in most situations, someone's gain is someone else's loss," Clark said.

For instance, a transmission line from a rural area to a metropolis may benefit those receiving the power in the city, but it might lower property values or otherwise damage those living by the huge towers constructed along the way.

Others are wary of Reid's proposal because they fear their states will end up footing the bill for areas that haven't invested as much time and money into their grid needs.


"It's a concern to think that Northwest rate payers would be paying for improvements in other regions," said Sen. Maria Cantwell, D-Wash. "We think (the grid's) working well for us already."

Whether it's the states or the feds that lead the initiative, lawmakers are adamant about updating the grid largely because without improvements, it will be virtually impossible to integrate clean-energy sources into the nation's electricity supply, experts said.

Generally speaking, renewable energy is produced far away from large population centers, requiring long transmission lines to get the electricity where it's needed. The intermittent nature of many renewables, particularly wind and solar, also strains the grid, flooding it with electricity during peak production then falling to practically nothing during lulls in wind or sunshine.

Without a new grid, congressional Democrats and the new administration won't be able to implement some of the legislation they hope to pass this year, said Sen. Byron Dorgan, D-N.D., including a national Renewable Portfolio Standard, which would require that a certain percentage of the nation's electricity come from renewable sources.

"We must add additional transmission capability in this country," Dorgan said. "Otherwise we'll have stranded renewable energy, and we'll need that renewable energy to meet an RPS."


Currently, 300,000 megawatts of wind projects -- the equivalent of 20 percent of U.S. electricity consumption -- have been put on hold because the grid can not deliver the load where it's needed, said Reid Detchon, executive director of the Energy Future Coalition, an alliance of business, labor and environmental groups.

Tailoring the new grid to work with renewable energy will add extra costs, though, raising the price tag from an estimated $50 billion to meet basic needs to $80 billion if 20 percent of electricity comes from clean-power sources, said Clark, the NARUC second vice president. The recent stimulus bill devoted $15.5 billion to grid improvements.

The price for a new grid will be well worth it, said Michael Morris, chief executive of American Electric Power, which owns the nation's largest electricity-transmission system.

"If we truly build an interstate highway for electricity, you could build half as many power plants," he said.


([email protected])

Latest Headlines