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Grid experts see bright prospects for transmission expansion under Biden

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Grid experts see bright prospects for transmission expansion under Biden

The outlook is good that support for new high-voltage electric transmission could be part of an infrastructure spending package under a potential Biden administration, a panel of energy experts said Oct. 29.

But opinions varied on whether measures aimed at boosting grid buildout would make more sense in an initial coronavirus stimulus bill or as part of an energy and climate bill passed through the budget reconciliation process, and the extent to which legislation is needed at all.

"I think broadly, there are good prospects," Rob Gramlich, president of Grid Strategies LLC, said during a virtual event hosted by WIRES, a group that advocates for high-voltage transmission infrastructure to support clean energy integration.

"If you think about it this way, an infrastructure bill would be more popular than a climate bill, per se," Gramlich said when asked about the likelihood that support for transmission would included in a budget reconciliation stimulus package.

With President Donald Trump trailing former Vice President Joe Biden in public polling in the race for the White House, buzz has been growing about the possibility that an energy and climate bill could be passed through budget reconciliation should Biden win and Democrats regain a majority in the Senate.

Budget reconciliation allows for expedited consideration of legislation that changes federal spending, revenue and the debt limit. Reconciliation bills are not subject to the Senate's filibuster rules, which require at least 60 senators to agree to end debate on legislation and bring it to a vote. Instead, the Senate can pass reconciliation bills with only a simple 51-vote majority.

Gramlich suggested Democrats will be eager to pass some form of economic recovery bill early in a potential Biden term in the wake of a market downturn amid a winter spike in new coronavirus cases.

"I think Democrats recognize that any policy doesn't have to be labeled a climate bill," Gramlich said. "But if it's infrastructure legislation that supports climate initiatives, that's a win for the climate, and so I think transmission fits squarely in there."

However, former Federal Energy Regulatory Commission Chairman Joseph Kelliher cast doubt upon a "Christmas tree" approach to COVID-19 relief if Biden wins the presidency with full Democratic control of the U.S. Congress.

"I would want it to be really focused on COVID because I would think [Biden] should be able to get bipartisan support for that," said Kelliher, who also served as counsel for the Republican majority on the U.S. House Committee on Energy and Commerce in the 1990s.

Kelliher said he can envision a big infrastructure package becoming the Biden administration's second priority after targeted coronavirus relief. And if Trump prevails, the U.S. will still continue its clean energy transition, Kelliher added.

Mixed views on scope of legislation

Panelists also praised existing transmission proposals floated in the current Congress.

Kelliher singled out a bill proposed by House Democrats on the Energy and Commerce Committee in January that contained multiple transmission provisions, including a measure that would direct FERC to issue a new rule requiring better interregional transmission planning.

But the former FERC chairman also argued that most transmission reform can be achieved without legislation. "I don't think you need a change in law to attract adequate investment, I don't think you need a change in law to actually have effective cost allocation, and I don't think you need a change in law to have more effective federal siting," Kelliher said.

Kelliher argued that, as an alternative, FERC could rework its base return on equity policy and proposed transmission incentives policy. FERC could also reimplement a siting provision of the Energy and Policy Act of 2005 in response to an adverse federal appeals court ruling, Kelliher added. Other grid experts have recently argued ambiguity in the statute requires fresh congressional action.

Antoine Lucas, vice president of engineering for the Southwest Power Pool, noted that the grid operator and its members have approved $10 billion in transmission projects over the last decade. "That's been in the absence of additional incentives," Lucas said.

But Gramlich asserted that clear guidance from Congress will give FERC's actions on transmission a better chance of surviving judicial review before conservative judges. Gramlich noted that House Democrats on the Select Committee on the Climate Crisis included transmission tax incentives and federal siting reform suggestions in a policy blueprint released in June that is largely intended as a guide for a future Congress.

"I think it would help with the conservative courts for FERC to have some recent legislative provisions to point to from Congress saying that they need to act," Gramlich said.