An Update on Transmission Law and Policy from WIRES
Second Quarter 2018
WIRES: ELECTRIC TRANSMISSION IS
KEY TO A RESILIENT POWER SYSTEM
In late 2017, the U.S. Secretary of Energy initiated an important, if controversial, discussion on energy security and sustainability by asking the Federal Energy Regulatory Commission (FERC) to subsidize
uneconomic nuclear and coal electric generation plants that would otherwise retire. The action was taken on the basis that these technologies could always rely on secure fuel supplies to keep the grid operating, even under conditions of threat. While rejecting this radical, out-of-market approach, FERC inaugurated a sweeping
examination of how regional transmission organizations (RTOs) and the industry can make the grid more resilient in the face of extreme weather, fuel emergencies, or cyber or physical destruction.
In response, WIRES commented to FERC on May 9 that the most efficient, operationally flexible, and secure way to make the entire grid more resilient is to expand and upgrade the high-voltage transmission network, a component of the electric system that is more within FERC's authority than electric generation. WIRES' comments were strongly supported by a new report by The Brattle Group entitled 'Recognizing the Role of Transmission in Electric System Resilience.'' Natural events of unparalleled ferocity and unpredictability and vulnerabilities arising from digital control technologies have made it more important than ever to plan the development of the grid and wholesale power markets based on the need for resilience in addition to reliability economics, and public policy. (Despite industry opposition, Secretary Perry continues to focus on using emergency authorities to require uneconomic generators to stay operational.) WIRES' leadership has been vocal on the resilience issue:
"The Department of Energy and FERC have been focused on generation diversity in the context of resilience. The piece that is missing in the discussion is how those resources are going to be delivered where, and when, they are needed. Are we planning an integrated transmission system that can deliver and balance generation resources broadly across regions, and over different paths, when faced with major disruptions? Or are we building "just-in-time" incremental system upgrades to meet local needs?"
- WIRES President Nina Plaushin
WIRES LEADERSHIP RETREATS TO CHICAGO
WIRES' senior members held a retreat in May to consider the organization's plans as the nature of the grid and electrification of the U.S. and Canadian economies change fundamentally. Under consideration were:
- 2018-19 policy priorities, including grid resilience and FERC rate policies;
- New administrative and organizational needs; and
- Long-term strategic planning for WIRES' second decade.
Pictured are WIRES 2018 Officers and Executive Director at the Retreat:
and Counsel Jim Hoecker, VP Brian Gemmell of National Grid, Treasurer Brian Drumm of ATC, Secretary Tom Hestermann of Sunflower Electric, President Nina Plaushin of ITC, and President-Elect Paul Dumais of Avangrid.
SPOTLIGHT ON - Transmission Grid Video Airs on PBS
WIRES and TriVue Productions produced a five-minute education video that is airing on PBS beginning June 1 through the rest of 2018. The video features Senator Martin Heinrich (NM-D) talking about the urgent need for investment in the electric grid which acts as the foundation for continued economic growth in transportation, healthcare and other key industries. The new video reveals some basic truths about the grid and our use of electricity with which laypersons and policy makers may be unfamiliar.
"Our economy really relies on an electric system that has to be there 24/7, 365 days a year. That's why it's so important that we continue to make investments in energy infrastructure. The electric grid is the underpinning of our entire economy and of the many things that we don't think about being directly connected to the electric grid itself."
- U.S. Senator Martin Heinrich
|Spotlight On "The Electric Transmission Grid Powers the Future"
ELECTRIC VEHICLES MAY BECOME THE BIGGEST DRIVER FOR MORE ENERGY INFRASTRUCTURE
As part of a legal settlement between the federal government and Volkswagen
addressing Clean Air Act violation claims, Electrify America is designating $2 billion to promote electric vehicles, which will include substantial infrastructure investments in the Northeast Corridor. A key objective of the strategy is to coordinate these and other investments to create a charging network with the capacity to serve millions of electric cars in the next decade.
Read more here.
In the coming months, WIRES is looking more deeply into various predictable new technology developments that could easily result in a doubling of electricity use in the next quarter century and the need for major investment in the high voltage grid.
PLAUSHIN AND HOECKER ASK POLICY MAKERS TO HELP ADVANCE CRITICAL INFRASTRUCTURE
Take a moment to read two recent letters, one op-ed and another a submittal to a May 10 Congressional hearing. They reflect the tenor of WIRES appeals urging legislators and regulators to recognize the importance of the transmission system and why the industry must be appropriately empowered to help prepare for a more highly electrified 21st Century economy.
IS DEPLOYMENT OF ENERGY STORAGE A TRANSMISSION ISSUE?
The changing character of electric generation has made the ability to store energy for later use an area of growing interest. Both transmission and storage will be needed to harvest the output of far-flung renewable energy production facilities. Improved technology and declining costs have presented industry and regulators with new questions about rates for storage and its functionalization (i.e., whether storage should be treated as a transmission asset in certain circumstances). New reports shed light on the increasing importance of this aspect of the grid. In its
Information on Challenges to Deployment for Electricity Grid Operations and Efforts to Address Them, the U.S. Government Accountability Office reviews factors that either drive or inhibit
energy storage deployment, including industry and technology readiness, safety concerns and stringency of siting requirements, increasing use of renewable resources, cost-competitiveness of storage and challenges with quantifying the value of storage, and the regulatory environment, according to studies GAO reviewed and stakeholders GAO interviewed.
In addition, The Brattle Group has examined the developments and trends facing the energy industry with a study examining FERC's recent Order No. 841 which aims to make it easier to add electricity storage to the grid. If states build on Order 841, the study found, storage market potential could increase to 50,000 MW over the next 10 years, as long as storage costs continue to drop.
Read the study here.
"When things that get extremely cheap, you often end up with too much of them. That situation is exacerbated by the no-off-switch nature of wind and solar power. Without better transmission networks and storage, managing far-flung, intermittent resources can result in zero or negative wholesale energy prices."
- David Fickling, Bloomberg LP, 5/20/18
TransGrid-X 2030 Symposium, [Electrification Futures Study and Interconnection Seams],
Iowa State University, Ames, Iowa (July 26)
Keynote-Jim Hoecker, WIRES Counsel and Executive Director.
WIRES Summer Meeting, Colorado Springs, CO (July 30-31)
S&P Global Platts 2018 Transmission Planning & Development Conference, Arlington, VA (June 21-22)
WIRES member firms were well represented at this two-day conference, including on panels assessing the effectiveness of FERC Order 1000 in getting more interregional transmission projects built, and on ROEs for transmission investment.
WIRES President Nina Plaushin, ITC Holdings, WIRES Board member Dan Rogier, AEP, and Kevin Huyler, National Grid sat on the second panel. To address the uncertainty surrounding transmission investment, Plaushin recommends including a broader range of companies in the proxy group that reflect the true breadth of investors' choices and the unrestrained nature of capital, including natural gas and oil pipelines. She also recommends alternative sources for short-term growth rate data.
House Energy & Commerce Committee Hearing: Examining the State of Electric Transmission Infrastructure: Investment, Planning, Construction, & Alternatives (May 10)
Chair Representative Fred Upton (MI-R) opened the hearing with this broad mandate, "A stable and uninterrupted supply of electricity is critical to ensure the public's health and safety, as well as a quality-of-life that we have come to expect. However, in some parts of the country, our transmission infrastructure, like our nation's roads and bridges, is aging, congested, and in need of repair or replacement." The panel discussion highlighted the current debate about the defensibility of FERC Order No. 1000. The regional planning regime instituted by FERC in 2011 gets decidedly mixed reviews, especially with respect to whether it has adequately promoted grid integration, technology deployment, and the interregional transmission planning of transmission projects.
View the witness testimony and webcast here.
2018 Energy Bar Association Annual Meeting & Conference (May 8)
Along with former FERC Chairmen Wood, Kelliher, Wellinghoff, and Bay, WIRES
Counsel and Executive Director Jim Hoecker provided unique insight into their
tenures at the agency, views on energy markets and
infrastructure development opportunities, and what they believe FERC must do in the future. Among the topics upon which the former officials opined were the prospects for reform of FERC natural gas pipeline certificate processes, retail power competition, the "fuzzy" boundaries between state and federal jurisdictions, transmission solutions in a distributed energy environment, grid reliability and resilience, and FERC's status as an independent agency. Read more
IF YOU NEED, OWN OR DEPEND ON ELECTRIC TRANSMISSION -
YOU SHOULD JOIN WIRES!
RES is the transmission industry's voice on key public policy issues at all levels of government. During this time of change and challenge in Washington and across the country, your support for WIRES - and participation in its educational and advocacy programs - are essential to building America's electrical grid to meet both current and emerging challenges.