1 year ago
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The fabulous growth of wind and solar builds on states’ clean energy policy and corporate decarbonization targets. However, great opportunities for more new clean energy supplies to replace fossil fuel energy need supporting grid investments. Where do we go for that modern infrastructure? Transmission policy is vital to supplying grid modernization, and some state governments see their role in planning ahead for the grid we need. Without states at the table, we will not have a quick transition to clean energy and economy-wide decarbonization. With states calling transmission planning meetings to order, planning decisions can include a wider range of policies, benefits, and advocates.
States should be heard on transmission
When regulators make policy, utilities listen. States’ roles in electricity decisions stem from their authority over public health, safety, and consumer protection. State regulators can call meetings for utilities to work on the modernization and decarbonization of the grid. Regulators can convene working groups of stakeholders to develop shared interests and goals, answer questions and work on solutions. Getting people together in dialogue does not mean the regulators have prejudged the merits of proposals that may come to the regulators in the future.
States’ jurisdiction on electricity supply and reliability are not limited to only reviewing proposed construction. Clearly, states’ adoption of clean energy standards put them into forward-looking roles, and often with authority over compliance with those standards.
States regulate electric utilities that own both long-distance transmission lines and the distribution wires in the streets. Both sets of wires are needed for reliability and for hosting clean energy. State laws and practices manage the grid as a monopoly and regulate the siting and construction of new transmission.
While the majority of states have clean energy portfolio laws, there are fewer that have taken on the task of expanding the grid to enable the clean energy transition and retirement of fossil fuel powerplants. But some states have taken significant steps.
The earliest example is Texas, where legislation in 2005 for renewable energy zones led utilities to build 3,600 miles of new, high-voltage transmission lines—serving as a model today for other state legislatures, such as Illinois. After Texas, the California Renewable Energy Transmission Initiative demonstrated how collaboration initiated by state government could address siting concerns, industry needs, and state clean energy goals.
Recently, New Jersey’s regulatory commission, the Board of Public Utilities, implemented an agreement with regional grid operator PJM that provides mutual assistance between the state utilities commission and the regional transmission organization to implement the state’s selected transmission plan. With that experience, New Jersey regulators came back to PJM a second time this spring for another round of transmission for offshore wind procurement mandated by the state.
States belong in transmission planning for decarbonization
How do we know the states belong in the transmission planning process and have a key role? State governments, usually through the public utility commission, have decades of practice under states’ authority to approve or deny transmission construction, usually with a determination of need for the proposed infrastructure. States are present in Federal Energy Regulatory Commission (FERC) discussions of transmission planning, as seen in the extensive efforts of a Joint Federal-State Task Force and the anticipated roles for states in the FERC transmission rulemaking issued in April 2022. These settings show states’ interests in how utilities expand the transmission system, and the benefits of that expansion.
How individual states collect information and set grid priorities is a matter for them to decide. The early examples of Texas and California demonstrated structured public proceedings that involved many more perspectives than usual transmission planning does. Those state-led discussions set the goals for utility companies to meet with their own proposals. In this way, states brought a wider set of concerns, interests, and objectives to the utility sector to act on. When utilities brought specific plans for future transmission investment that conformed to the outlines from those earlier discussions, potential issues were already addressed, and proposals were less controversial.
States have not done enough to support transmission
The split between federal authority and state requirements needs attention. To deliver new clean energy, the country will need changes in the priorities for building transmission. Currently, too many transmission planning efforts sanctioned by FERC are not proactive about meeting state requirements for clean energy. Without state utility commissions asking how their local utilities will have adequate transmission for a cleaner energy supply, existing practices will leave regulators, utilities and the public unable to prepare for decarbonization or comply with state clean energy laws.
When states take a role in transmission planning, this does not replace the utility or grid operator that has FERC authorization or designation as the transmission planner. Rather, states should be engaged with the public and their regulated transmission owners in preliminary discussions and fundamental planning work under public utility commission supervision. In addition to their role in transmission siting approvals, states can advance wider understanding of transmission planning. By convening people with varied interests and priorities, states can bring transparency and progress on state decarbonization goals. The states are best suited to protect the public interest in health, clean air, and siting renewable energy.
State collaboration can advance transmission
There are opportunities and examples of states collaborating in pursuit of clean energy and its transmission. States can work together when they see potential clean energy resources coming from the same area, and their clean energy procurements can be coordinated. State government support for clean energy is so consistent in the Northeast that its state governments have a record of collaboration (and unified pressure on the regional grid operator ISO-New England). New England states began collaboration without ISO-New England in coordinated energy procurements. This advanced into transmission, with the New England states’ Regional Transmission Initiative. Then eleven states in the Northeast, including New Jersey, New York, and New England states announced additional collaboration for offshore wind transmission.
What reform can bring
States have unique goals and legislative mandates regarding climate, fuels, and infrastructure. In addition, state governments have much greater potential for an inclusive dialogue amongst constituents than utilities do. When states set meeting agendas and scope to discuss transmission plans, there’s room for equity principles, and a focus on building transmission to maintain reliability as we replace fossil plants. Other economic benefits from energy development are also relevant to states—and currently excluded from FERC transmission planning requirements. States can engage in all these considerations—and FERC described states doing this in their recent rulemaking—while still abiding by FERC jurisdiction over planning and transmission rates.
We’re going to need investment in the grid, and the public will need to be involved. Where states have legal mandates for clean energy and decarbonization, who is in a better position to convene the conversations and bring the public in?
