Policymakers, utilities and renewable energy developers agree: The U.S. is in dire need of transmission improvements. The grid is aging, with many transformers approaching or surpassing their design life, and a lack of maintenance and investment has left the elderly infrastructure overstrained and prone to failure.
The Department of Energy in 2005 found that overall, less and less money had been invested in the grid every year since 1975, and a report from research firm Primen, now part of EPRI Solutions, estimated that grid fluctuations and outages cost anywhere from $119 billion to $188 billion annually. On top of that, as utilities get more of their electricity from renewable projects -– which tend to be smaller than most conventional power plants –- they need more transmission lines over which to distribute it. The California Public Utilities Commission estimates that the state needs seven new transmission lines to reach its goal of getting 33 percent of its electricity from renewable sources by 2020.
Yet in spite of all the agreement over, and data to support, investment in transmission, the lines are being built far more slowly than needed and at a slower pace than even renewable-energy generation is being built out. Projects in development are now expected to take years -– in some cases, decades -– to materialize. According to Bob Anderson, managing director of the Western Grid Group, it all boils down to two main issues: getting the finances lined up and getting regulatory approval.
Struggles: Financing, Permitting
Finding finances requires a business plan, and the projects often run into the following chicken-and-egg problem: Developers won’t build electricity-generation projects unless the transmission infrastructure is available, while investors won’t fund a transmission line unless they’re sure there’s enough power generation in place to make it worthwhile, said Jim Baak, director of policy for utility-scale solar at solar advocacy group Vote Solar. But while financing is by no means a small task, it can be less of an impediment –- in some cases -– than the regulatory process.
That involves getting permits for the entire length of the line, which often runs through multiple cities, counties, states — and in some cases also crosses national boundaries, requiring a presidential permit. Much of the objection usually comes from people who don’t want the line nearby their homes or businesses, aka NIMBY, Anderson points out.
Complicating matters is the country’s decentralized transmission planning system, which shares authority with a vast network of agencies. “There’s tension between the states and federal government and everyone gets involved,” Anderson said, adding that a dozen agencies could easily weigh in on a single project. “Landmass agencies, environmental regulators, energy regulators -– it’s just kind of a brawl.”
Getting everyone to get along is especially difficult when the various agencies don’t necessarily share common goals, but instead are looking out for their specific ratepayers, said Jim Baak, director of policy for utility-scale solar at Vote Solar. It’s tough to figure out who pays for what, who builds the transmission, how the developers will interconnect with the transmission and the timing of the electricity transfers.
Poster Child of Transmission: Path 15
How bad is it? The story of Path 15, a major power corridor that connects the northern and southern parts of California, illustrates how all these factors can impact transmission. The story starts way back in the 1980s, when California utilities realized that Path 15 was becoming congested and needed improvements to prevent outages.
The Western Energy Coordinating Council, the Transmission Agency of Northern California and the Pacific Gas and Electric Co. began studying the issue in 1988 as part of a project to build transmission between California and Oregon. The groups proposed a new 85-mile line that would connect Los Banos, Calif., and Gates, Calif., to help relieve the strain.
The first major hurdle was an environmental impact study, which concluded that the project would have no significant adverse environmental impacts. In spite of the study, the California Public Utilities Commission rejected PG&E’s proposal to build the line. The commission decided it wasn’t the most economical use of money for investors, and wouldn’t allow PG&E to recoup its investment through its ratepayers, instead suggesting other steps to help relieve the grid.
Then deregulation swept the Golden State, creating an independent system operator to manage power flows and restructuring the electricity authority in the state. When California endured rolling blackouts in 2001, a national energy policy study identified Path 15 as a trouble zone and then-U.S. Energy Secretary Spencer Abraham directed the Western Area Power Administration to build the line.
As a federal agency, Western didn’t need approval from the PUC, but also didn’t get any federal funding for the project. With PG&E, the Trans-Elect Development Co. and other partners, the project began raising private money to build the line, which was owned by Western but controlled by the California Independent System Operator.
Fundraising was difficult. Partners came and went, and six of them -– including the Transmission Agency of Northern California -– withdrew from the project. But the project managed to power on, surviving a series of supplemental environmental reviews that resulted in a change in the planned path.
Finally, in 2002, investors signed on and the Federal Energy Regulatory Commission and California ISO board approved the upgrade. The project was built two years later –- garnering PUC approval in the meantime –- to come online in 2004, 16 years after the initial studies had been completed. All together, the project took some 20 years from the time the idea was first conceived, Anderson said. He calls the project “a poster child” for the challenges of building new transmission lines.
There’s a few things that transmission planners can do to try to speed along the process. When faced with NIMBY complaints, transmission developers need to thoroughly seek out and evaluate alternative corridors for comparison, Anderson said. They also need to be able to articulate the benefits in order to persuade the public that transmission is really necessary. And they need to convince state and federal energy regulators that the project is worth the cost to ratepayers.
But for real change to occur, it will have to be done at the political level. Politicians are starting to take notice of all the roadblocks. At the National Clean Energy Summit in Las Vegas earlier this month, Sen. Harry Reid (D-Nev.) said he wouldn’t back an energy bill that doesn’t reduce the need for so many regulatory approvals and permits.
Relief may be on the way, as Congress is considering legislation that would give the Federal Energy Regulatory Commission some oversight over the planning, cost allocation and rollout of transmission to help streamline the regulatory process, Baak said. “On the federal level, that’s one of the policy pieces that I think it going to really open the floodgates to transmission development,” Baak said.
Image courtesy of NREL.