Federal regulators on Monday approved sweeping changes to the way America’s power grids are planned and financed, in a move that supporters hope could spur thousands of miles of new high-voltage power lines and make it easier to add more. wind and solar energy.
The new rule from the Federal Energy Regulatory Commission, which oversees interstate transmission of electricity, is the most significant attempt in years to improve and expand the nation’s ailing power grid. Experts have warned that not enough high-voltage power lines are being built today, putting the country at greater risk of blackouts due to extreme weather while making it difficult to switch to renewable energy sources and cope with the growing demand for electricity.
A major reason for the slow pace of network expansion is that operators rarely plan for the long term, the commission said.
The country’s three major power grids are overseen by a collection of utilities and regional grid operators that focus primarily on ensuring the reliability of electricity for homes and businesses. When it comes to building new transmission lines, grid operators tend to be reactive, responding after a wind farm developer requests to connect to the existing grid or once a reliability issue is detected.
The new federal rule, which was two years in the making, requires grid operators across the country to identify needs 20 years from now, taking into account factors such as changes in the energy mix and the growing number of states requiring power wind and solar. and the risks of extreme weather.
Grid planners would have to evaluate the benefits of new transmission lines, such as whether they would reduce electricity costs or reduce the risk of blackouts, and develop methods for dividing the costs of those lines between customers and businesses.
“We must plan for our nation’s grid for the long term,” said Willie Phillips, a Democrat who chairs the energy committee. “Our country’s aging grid is being tested in ways we have never seen before. Without meaningful action now, we will not be able to keep the lights on in the face of increasing demand, extreme weather and new technologies.”
The commission approved the rule by a vote of 2 to 1, with the two Democratic commissioners in favor and the only Republican, Mark Christie, against. Christie said the rule would allow states that want more renewable energy to unfairly shift the costs of necessary grid upgrades to their neighbors.
“This rule completely fails to protect consumers,” Christie said. She said it was “aimed at facilitating a massive transfer of wealth from consumers to for-profit special interests, particularly wind and solar developers.”
It could take years for the rule to take effect and the commission could face legal challenges from states concerned about higher costs.
Nationally, energy companies have proposed more than 11,000 wind, solar and battery projects, but many are in limbo because there is not enough capacity on the grid to accommodate them. What’s more, individual developers are currently required to pay for network upgrades to accommodate their projects in a process that is fragmented and slow.
Some critics say that’s like asking a trucking company to pay for an extra lane on a highway that all motorists ultimately use. They say a better approach would be to plan ahead for broad upgrades with costs shared by a broad set of energy providers and users.
But the question of who pays for those network expansions has sparked furious debate.
Officials in states less enthusiastic about wind and solar, such as Kentucky or West Virginia, say they could be forced to foot the bill for new multibillion-dollar transmission lines intended to help states like New Jersey or Illinois meet their energy ambitions. renewable.
To allay those concerns, the commission established guidelines on how to divide the costs of new transmission projects. Before planning any lines, utilities and grid operators are supposed to work with states on a formula to allocate costs to customers based on the potential benefits of new lines.
There is some precedent for this. The grid that manages electricity in 15 Midwestern states, known as MISO, recently approved $10.3 billion in new power lines, in part because many of its states have ambitious renewable energy goals that require more transmission. MISO estimated the lines would generate up to $69 billion in total benefits, including lower fuel costs and fewer blackouts. The grid operator was then able to split the costs even among states that did not have renewable policies but would share the rewards.
“It’s very difficult and not everyone got what they wanted, but we all agreed that we would sit in a room and figure this out,” said Carrie Zalewski, a former Illinois state regulator who is now with the American Clean Energy Association. a renewable energy trade group.
Christie said the final rule did not give states enough power to object to how costs would be shared. But Alison Clements, the committee’s other Democrat, said giving each state a veto was “a recipe for inaction.”
The rule would also require utilities and network operators to consider new technologies that could cost more up front but could make networks more efficient and offer long-term benefits, such as advanced conductors that can carry twice as much. current than traditional lines.
Environmental groups and renewable energy companies praised the new rules.
“This is a monumental day in the fight against climate change,” said Sen. Chuck Schumer of New York, the Democratic majority leader, who had urged the committee to pass a strong grid planning rule.
Over the past year, Schumer and other Democrats have warned that efforts to combat climate change could fail if the country’s grids are not overhauled. Coal- and gas-burning power plants are a major source of pollution that is dangerously warming the planet. While the Inflation Reduction Act of 2022 invested hundreds of billions of dollars in cleaner alternatives like wind and solar energy, a recent analysis found that half of that law’s climate benefits could be lost if the United States does not can build new streams at a faster rate. passed.
It remains to be seen how effective the new rule will be, as it will depend on how network operators implement it. An attempt by the commission in 2011 to encourage transmission planning largely failed, in part because many utilities opposed new long-distance lines that could undermine their monopolies, said Ari Peskoe, director of the Transmission Initiative. Electrical Law from Harvard Law School. Due to the decentralized nature of the country’s networks, federal regulators can’t do much to force operators to comply.
“I suspect this rule will be helpful in parts of the country where there is already momentum for further development of streaming,” such as the Northeast, Mr. Peskoe said. “But in places where big utilities are resisting more transmission, I don’t know if FERC can do that much.”
The new rule affects network planning within 12 major regions across the country, but would not require transmission planning to connect those different regions to each other, which some experts say is an even greater need. The rule would also not affect Texas’ core grid, which is insulated from federal regulations because it does not cross state lines.
The rule also does not address the logistical and political challenges of building new long-distance power lines. It can take developers a decade or more to locate a project in numerous jurisdictions, receive permits from a host of different federal and state agencies, and resolve claims over impaired views or damage to ecosystems.
The Biden administration recently ended a program aimed at cutting federal permitting time for certain large transmission lines in half. But speeding things up further could require action from Congress, where lawmakers have struggled to agree on new streaming policies.
However, in a separate rule Monday, the federal power commission outlined certain situations in which it could override state objections to a small subset of new power lines.
At stake is a set of ten “electric transmission corridors of national interest” that the Department of Energy has tentatively identified across the country, places where new lines would be particularly beneficial. If state regulators blocked or delayed a project in those corridors, the federal commission could step in to approve it.
But some experts wonder how often this would happen, since the commission has historically preferred to collaborate with states.