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Electric grid expansion may require congressional action, energy experts say

While U.S. electric grid operators, states and utilities will need to achieve a high degree of cooperation in the coming years to accommodate a surge in renewable generation, federal lawmakers may also need to get involved in promoting system planning, a panel of energy experts said Oct. 13.

"I think interregional planning is probably going to take congressional action," Beth Emery, senior vice president and general counsel at Gridliance, said during an annual fall forum hosted by the Energy Bar Association. "I hate to say that. Everybody has been talking about getting the states on board, but I'm not sure the states are going to be able to do it without a prompt from Congress."

With a growing number of states setting aggressive 100% carbon-free clean energy targets, panelists agreed that finding a way to move low-cost renewable power from remote areas to population centers will be one of the industry's most pressing near-term challenges.

If regional grid operators and utilities fail to build enough transmission capacity, power companies and developers will take a financial hit as customers continue to move toward distributed energy resources such as rooftop solar and behind-the-meter batteries, said Lisa McAlister, senior vice president and general counsel at American Municipal Power Inc.

"I do think that we need to come to the realization that if we can't get there with transmission planning, customers are going to take the matters into their own hands," McAlister said. "They are and will continue to find ways to localize supply and avoid transmission altogether."

Emery noted that in passing the Energy Policy Act of 2005, the U.S. Congress intended to give the Federal Energy Regulatory Commission backstop siting authority when state commissions deny permits for interstate transmission lines located within national interest corridors.

However, a 2009 ruling by a divided panel for the U.S. Court of Appeals for the 4th Circuit held that FERC read too much into an ambiguously written statute when it adopted new procedures for parties asking the commission to exercise its new authority. The U.S Supreme Court eventually declined to review the case Piedmont Environmental Council v. FERC (No. 07-1651) — and the issue of whether FERC actually has federal backstop siting authority remains murky.

"It's hard to get big interregional projects built without federal siting and eminent domain authority, and I think the record shows that even when FERC has that authority, it's hard sometimes to get gas pipelines built," Emery said. "It's certainly hard with interstate [electric] transmission."

In many cases, state commissions "simply balk" when confronted by local landowners who are upset about environmental and other impacts without seeing local benefits associated with large power transmission lines, Emery said. "The Trump administration has been tackling regulatory impediments and environmental issues for almost four years and we haven't dealt with Piedmont," Emery said. "Why not? I do think it's an interesting question."

Transmission hurdles have received some recent congressional attention, with House Democrats releasing a proposed energy and climate bill in January that would direct FERC to issue a rule improving interregional transmission planning. But one former FERC chairman said the bill's transmission section "failed miserably" by not giving the commission the authority it needs to implement a national transmission plan.

'System of yesterday'

Multiple speakers during the Oct. 13 event also took aim at existing transmission system planning criteria.

"Our current planning criteria are really to plan the system of yesterday, not the system of today, really, much less tomorrow," said Jennifer Curran, vice president of system planning and chief compliance officer at the Midcontinent ISO.

Transmission planning criteria, which is largely guided by the North American Electric Reliability Corp. and FERC, needs a broad overhaul, said Valerie Teeter, senior manager for federal regulatory affairs at Exelon Corp..

"At the end of the day, we're planning to meet NERC reliability standards," Teeter said, noting that regional grid operators also account for economic issues such as grid congestion when developing transmission plans.

"There aren't necessarily clear planning criteria that say, 'There's going to be resources in X spot, we need to plan to deliver those resources,'" Teeter said. "Until you get those criteria, we're just kind of spinning our wheels because, again, we don't really agree what future we're planning towards."