Regulators Face Worst of Times

Kennedy Maize

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New Wiring Diagram

Betsy Moler, executive vice president of Chicago-based Exelon Corp. and former FERC chair, endorsed federal siting of electric transmission. She said, “We support passage of federal transmission siting legislation giving this commission plenary authority to site all new high voltage transmission, which we would define to mean transmission lines 345 kV and above, and any feeder lines 100 kV and above that connect new non- or low-emitting generation resources. . . . The authority should be based upon the Natural Gas Act model for interstate natural gas pipelines. We would urge the members of this commission to formally voice their support for federal transmission siting legislation, too.” That congressional action would end the jurisdictional questions in the Fourth Circuit decision, if it withstood further court scrutiny.

Timing of all of these regulatory and policy moving parts vexed the FERC panelists. Azar observed that the states want certainty from the feds—something that doesn’t appear to be coming any time soon. “But,” she added, “we can’t wait for that.” So the state and regional planners must begin their tasks with policy blinders on, unable to see the full landscape around them.

Winners and Losers

Another problem for the FERC panels is how to allocate the costs and identify the benefits of all this activity. What will the price of natural gas be in 10 years? How much are carbon reductions worth? Who really benefits and how are those benefits distributed from new transmission? What can we do with the interests of “pass-through” states (who see power flowing over large lines across their state, without any local benefits)? All those questions were raised; none were answered.

But there was considerable consensus among the panelists. First, all appeared to endorse a plan to build an extra high voltage (alternating and direct current) overlay of the existing transmission system, similar to that envisioned by the Joint Coordinated System Plan 2008 (PDF). This would not be the conventional generator-to-customer transmission system that characterizes the way renewables get to load today, but what one panelist described as a “mesh” that moves power easily from place to place to place.

The panelists also generally agreed that in addition to regional transmission planning, interregional planning—connecting the Balkanized grid, particularly across the Eastern and Western Interconnection—is necessary.

Who should do that interregional planning? FERC drew the short political straw according to virtually all of the panelists. Recognizing that this planning model will require federal legislation, Joe Welch, CEO of ITC Holdings, an independent transmission company, summarized the views: “There has got to be an interconnection planning authority. It has to be FERC.”

—Kennedy Maize is executive editor of MANAGING POWER.

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