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Greater FERC authority over transmission siting not a fix-all for grid woes: Glick

Highlights

Transmission siting falls to multiple state, local entities

Planning, cost allocation also pose significant challenges

Glick eyes new rulemaking or other approach by end of 2022

Legislation expanding federal authority over transmission siting would not be a silver bullet, capable of solving the challenges ahead for building out the grid to accommodate federal and state climate goals, the head of the Federal Energy Regulatory Commission said June 30.

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While FERC has authority to site interstate natural gas pipelines and preempt most state objections to a gas project, Congress did not grant it similar authority with respect to electric transmission facilities, which are primarily subject to state regulatory authority with very limited backstop siting authority granted to FERC.

"I think certainly it would have a significant impact if the transmission siting process were improved and made more efficient" by providing FERC the same kind of siting authority as it holds for gas pipelines, FERC Chairman Richard Glick said during a virtual forum hosted by the Energy Policy Institute at the University of Chicago.

"But I also don't want to leave the impression that that would be the end-all and be-all because even if you had a better siting process, you still have to work out the planning and, more importantly, the cost-allocation issues," Glick said. "Otherwise, a lot of these projects still aren't going to get built."

Various studies have estimated the US will need to double or even triple its transmission capacity to meet the Biden administration's goal of decarbonizing the nation's economy by midcentury. But the buildout of interstate transmission lines needed to accommodate a growing number of renewable energy resources has lagged in recent years amid local landowner opposition and disagreements over how to allocate costs according to a project's benefits.

Three-legged stool

Glick referred to the impediments standing in the way of transmission buildout as a three-legged stool consisting of siting, planning and cost allocation.

Siting transmission projects typically takes upwards of 10 years, in large part due to the need to secure approvals from the numerous local entities through which a project would traverse.

Having a single venue, such as FERC, in charge of project approvals and denials would streamline the process, eliminating concerns "about states not having necessarily the incentive to approve a transmission line ... if the power is going to another state," Glick said, making the process easier for developers from an efficiency perspective.

But Glick cautioned that even with such authority over pipeline siting, that process remains "very controversial." Gas projects have faced legal challenges and strong opposition in recent years. Glick, himself, has dissented, at least in part, on multiple gas project approvals, most often over his view that the commission's consideration of greenhouse gas impacts fell short.

Glick added that getting legislation through Congress that expands FERC's authority over transmission would be a difficult feat.

"I think there are people on the left and people on the right, both opposed to giving the federal government additional siting authority," he said. "But if we did have that authority, there's not a doubt in my mind, it would be a more efficient process."

Regarding transmission planning and cost allocation, Glick acknowledged that FERC's Order 1000 has not panned out as many had hoped.

Part of the problem, Glick said, lies with the order forcing projects planned to meet regional needs or provide economic benefits to be competitively bid, while at the same time allowing utilities to retain control over projects meeting local reliability needs.

"So what we've done is we've given an incentive to utilities to avoid competition by building the lines that aren't necessarily going to get us to where we need to get to in terms of our carbon reduction goals," he said.

Defining beneficiary

As to cost allocation, Glick said everyone wants new transmission, but no one wants to pay for it. FERC is required to allocate project costs in a manner roughly commensurate with the benefits received, but Glick contends the definition of beneficiary has become too narrow.

"If you get power from a particular line, you're considered a beneficiary, but if you don't, you're not," he said. "The fact is people are benefiting greatly when transmission is built, even if they're not necessarily accessing directly the power that's transported along those lines."

Glick pointed to carbon reduction benefits, access to cheaper sources of power as well as reduced grid congestion that improves reliability.

Asked about the most important thing Congress could do for transmission as it pursues an infrastructure package, Glick said "clarifying our authority with regard to cost allocation," and in particular, providing guidance on how to define beneficiary and whether that definition can go beyond who gets the power.

FERC commissioners are actively working to figure out the best approach to transmission, he said.

Glick said he greatly hopes they will have a "pretty detailed outline" before the end of summer and that by end-2022 FERC will have "new rulemaking in place or some sort of regulatory approach in place providing some of these enhancements, especially on cost allocation and planning."