Bipartisan permitting reform bill targets gaps in US transmission planning

The contiguous U.S. is divided into 12 transmission-planning regions and three major power grids, and while a federal regulatory framework exists for regional transmission planning, no comparable framework exists for jointly planning transmission across regions. 

FERC has required neighboring regions to coordinate on transmission planning since 2011, but Commissioner David Rosner said this year that those interregional requirements have resulted in “exactly zero interregional transmission projects.”

During a Wednesday briefing hosted by the Environmental and Energy Study Institute, an independent nonprofit founded by a bipartisan group of lawmakers, Mark Falinski, senior manager for power transition and decarbonization at the World Resources Institute, described U.S. grid regions as “barely connected” and said the country lags Europe and, to an even greater extent, China, in this regard.

“In most regions, most of them have capacity that’s being exchanged of less than 10%. So if you’re looking at the peak load… in most of these 1%, 2%, 3% can be transferred between these individual regions because the ties just don’t exist,” Falinksi said.

Falinski then placed the U.S. system in a global context, citing research from the Macro Grid Initiative comparing interregional transmission added in the United States and Canada with China and Europe from 2014 to 2020. During that period, China added about 250 gigawatts of interregional transmission capacity — equivalent to roughly one-third of peak U.S. electricity demand. Europe added about 50 gigawatts, compared with about 7 gigawatts in the United States and Canada.

Daniel Palken, director of Infrastructure for Energy & Permitting at Arnold Ventures, explained that the newly introduced bill would offer two possible pathways for interregional transmission to be developed. One option would be for the regions to meet, identify where interregional transmission is needed, develop a plan for meeting those needs and submit it to FERC for review. 

Palken said he expects that regional planning process to be the primary way new interregional transmission projects move forward, but he foresees some problems with that method.

“The Achilles’ heel of a multi-year, many-stakeholder, semi-consensus-driven, somewhat arduous planning process is that it is not guaranteed to flow smoothly,” Palken said.

Palken said one problem with relying on a multistakeholder planning process is that some participants can have financial incentives to slow interregional projects. Utilities, for example, generally have stronger incentives to invest within their own service territories, where they are more likely to build and earn returns on both transmission and generation.

“The fear with just having a planning paradigm in place is that you set up a situation where some actors … have an incentive to say, ‘We don’t want this planning to go very swiftly,’” Palken said.

The bill’s second pathway is intended to serve as a backstop when that process fails. Individual developers could bring certain projects to FERC after first going through the states, giving projects that face what Palken described as “artificial barriers” another avenue to move forward. He said the existence of that option could itself discourage participants from unnecessarily holding up the planning process.

“The best backstop, the saying goes, is one you never have to use,” Palken said. “Its real effect would be to, because everybody can see that it exists, [have] a positive influence on planning itself.”

Palken also highlighted provisions of the bill aimed at streamlining reviews under the National Environmental Policy Act and National Historic Preservation Act. While the changes would apply to various types of infrastructure, he said they could have an especially significant effect on transmission projects because long-distance power lines can cross large areas of land and trigger extensive federal review.

“There’s obviously a good purpose behind this law. The BAAJA bill does not in any way repeal it or nullify that purpose,” Palken said of the National Historic Preservation Act, adding that the legislation would narrow the scope of review required for certain projects. 

“You’re not incurring a disproportionate … penalty in terms of how much you have to analyze merely by once touching or twice touching a parcel of the federal land,” Palken said.

The Senate is expected to begin considering the bill after the Nov. 3 midterm elections, with an initial procedural vote anticipated when lawmakers return.