By Kennedy Maize
The U.S. interstate high-voltage electric transmission grid is a mess. That’s not news.
To borrow loosely from Mark Twain, for years – decades– everyone has been talking about the grid but nobody has done much about it. Could this new year see that change?
“Could” is a conditional. Making a real start on fixing the grid is not a given, just a possibility. If it happens, it will take hard and often contentious work among policymakers, regulators, business leaders, and ordinary citizens at the local, state, and federal level.
If it happens, it will also rest on new and rebuilt foundations by the outgoing Biden administration, including the Department of Energy, along with a bipartisan, legally independent Federal Energy Regulatory Commission. It will also encounter pushback by some states and local citizens who are likely to object to disruptions to where they live while seeing no benefits.
On Dec. 16 last year, DOE’s Grid Deployment Office identified three potential new interstate transmission pathways – known as “national interest electric transmission corridors” – from among a list of 10 candidates DOE identified earlier. The agency’s action is subject to a 60-day comment period, ending in February. Once DOE certifies the winners, transmission developers will be able to override state and local objections that have stymied transmission projects in the past and also gain access to federal funds.
The three finalists are:
- Lake Erie-Canada Corridor, including parts of Lake Erie and Pennsylvania.
- Southwestern Grid Connector Corridor, including parts of Colorado New Mexico, and a small portion of western Oklahoma.
- Tribal Energy Access Corridor, including central parts of North Dakota, South Dakota, Nebraska, and five Tribal Reservations.
A chosen corridor will be able to take advantage of a May policy by a unanimous FERC, implementing Biden administration changes to the long-standing section 216 of the Federal Power Act. The FERC order is named Order 1977, going back to the first time the agency attempted to lay out a regulatory path for future electric interstate transmission lines. FERC’s policies then and subsequently consistently failed to overcome state and local objections to federal transmission siting.
At the same time, FERC passed a contentious policy, Order 1920, establishing mechanisms for regional transmission planning, involving the federal government, states, and private transmission developers. Commissioner Mark Christie, the only Republican on the commission at the time and a veteran state utility regulator, raised strong objections to the treatment of the states. The National Association of Regulatory Utility Commissioners quickly echoed Christie. Six months later, FERC made fundamental changes to meet the objections in Order 1920-A.
The problem FERC faced in 1977 and until the Biden administration weighed in was the inability of the federal government to exercise eminent domain to overcome state and local land use objections to an interstate transmission line. By contrast, FERC has long had that authority for interstate natural gas pipelines. While siting interstate gas pipelines is also contentious and time consuming, the gas lines generally get a federal green light and move forward.
Congress in the Energy Policy Act of 2005, with the backing of the George W. Bush administration, added section 216 to the basic electricity law, designed to overcome state ability to stymie electric transmission. The law gave FERC authority to approve a new line when state regulators failed to act on an application within a year.
That, too, became a policy failure. The U.S. Fourth Circuit Court of Appeals in the 2009 Piedmont decision rejected FERC’s interpretation of the new law. Writing for a three-judge panel, Judge Martin B. Michael (1943-2011) said FERC’s interpretation of Section 216 “would mean that Congress has told state commissions that they will lose jurisdiction unless they approve every permit application in a national interest corridor. Under such a reading it would be futile for a state commission to deny a permit based on traditional considerations like cost and benefit, land use and environmental impacts, and health and safety. It would be futile, in other words, for a commission to do its normal work.”
The Biden administration’s 2021 Infrastructure Investment and Jobs Act (PL 117-58 in Section 40105) directly overtured Piedmont. As the Washington Bracewell law firm explains, the new language in Section 216 “explicitly ‘undoes’ the statutory interpretation on which the Piedmont court relied and empowers FERC to exercise federal jurisdiction over the siting of certain power transmission projects even when such siting authority has been expressly rejected by a state agency.”
In addition to federal siting authority, priority corridors will be eligible for DOE loans to subsidize construction. The Biden administration’s Inflation Reduction Act (PL 117-169 in Section 40151) authorizes $2 billion worth of loans for transmission construction plus another $760 million for regulatory costs, such as state and FERC proceedings, of “up to 3 alternate siting corridors within which the covered transmission project feasibly could be sited.”
DOE’s designation of the three candidate corridors has not yet generated opposition. Instead, two of the seven candidate states dropped from the competition – Oklahoma and Kansas — expressed relief that they dodged the decisions. Whether states with selected corridors will raise later legal or political concerns is unknown.
With the legal ability of the federal government to override state objections established – assuming that legal challenges don’t undermine the new law – and DOE having identified three solid candidates for special attention, the next step is a final DOE decision. That will come after the Trump administration has occupied the DOE’s Forrestal Building and a new energy secretary, presumably Chris Wright, is in place. Trump’s views on the grid are not known.
If the new administration supports upgrading the grid, it will be up to the private sector to move forward on constructing new transmission. Stay tuned.