Electric Transmission 203: Planning to Expand and Upgrade the Grid

FERC’s recent Notice of Proposed Rulemaking (Docket No. RM10-23-000) refocuses attention on the importance of fair and open regional transmission planning processes for the continued reliability of the grid, and for other purposes such as wholesale market liquidity, deployment of new technologies, competition among generating resources, compliance with state renewable portfolio standards, mitigation of market power, energy security, and potential reduction in carbon emissions.

On June 28, 2010, the Environmental and Energy Study Institute (EESI) and WIRES (Working group for Investment in Reliable and Economic electric Systems) held a briefing on current and future methods of planning expansion of the high voltage electric transmission system. The projected increase in demand for high-quality electric service over the next two decades, access to low-carbon and location-constrained renewable resources, deployment of new digital technologies, and a focus on energy independence and security will require major upgrades to the nation's transmission system. Grid planning today is done at various levels – individual utilities, states, regions, or whole interconnections – and the parties responsible for coordinating the process and executing the plans vary widely. The Federal Energy Regulatory Commission (FERC) gave general guidance in its Order No. 890, and the pending American Clean Energy Leadership Act (S. 1462) proposes a new planning regime. Yet questions remain about how planning should work, who conducts or oversees the process, and whether planning can both ensure a transmission system adequate to guarantee liquid bulk power markets and avoid imposing costs on load-serving entities disproportionate to the benefits. This briefing explored diverse methods of planning and some of the current challenges that may have to be overcome by states, Congress, and/or the FERC.

This briefing was the sixth in a series co-sponsored by EESI and WIRES. The first five briefings were "How the Grid Works", "Policy Challenges to Grid Expansion", "Upgrading the Grid", "Cost Allocation" and "Integrating Variable Renewable Resources".

• The Federal Energy Regulatory Commission (FERC) has said improvement and expansion of transmission has been inadequate to date. Our current infrastructure needs significant upgrades to support regional wholesale power markets, accommodate smart grid technologies, and meet renewable energy targets.
• Competitive, wholesale power markets make transmission planning very complex because the systems are very diverse and regionalized; they do not function as a single, integrated machine.
• Our current transmission system is a product of the incremental changes of the past and is not equipped for the larger changes of the future. The system we have today for planning, funding and building transmission systems cannot deal with the low-carbon energy systems to which we are transitioning. Long-term plans are needed to allow for maximum flexibility of integrating new technology.
• An 80 percent reduction in greenhouse gas emissions by 2050 -- a goal of the House-passed American Clean Energy and Security Act (H.R. 2454) -- will require a major transformation of how and where we produce electricity.
• The Department of Energy’s Eastern Wind Integration and Transmission Study (January 2010) found that the eastern United States could get 20-30 percent of its electricity from wind power by 2024, through various combinations of Midwest land-based wind farms and offshore development in the Atlantic. However, all of these scenarios would require transmission infrastructure upgrades for which planning must begin immediately.
• Bad transmission planning disproportionately impacts renewable resources because they are location constrained, concentrated in remote areas, and most economic when balanced over large areas.
• There are no sweeping federal regulations or guidelines for transmission planning and the process is done differently in different parts of the country. For example, the West has no regional transmission organization so planning is done by a series of coordinated groups and state governors have a lot of latitude.
• The military is very reliant on the grid to train for and run overseas operations; thus, grid security is important to national security. There are some bases that could go off-grid (e.g. Naval Air Weapons Station China Lake, which has a large geothermal power plant, and Nellis Air Force Base, which has a large solar photovoltaic system), but it is cheaper to stay on-grid.
• Cost allocation is now a key issue because integrating renewable energy into the transmission system requires collaboration between many states, transmission developers, and customers across many regions. Most do not have systems of cost allocation that could account for these large-scale projects.
• FERC may need federal backstop authority for transmission planning, siting, and cost allocation to improve coordination among regions.