Building wind farms and huge solar arrays means nothing if they cannot transmit that energy to homes and businesses, and a recent court ruling just made connecting to the grid a lot easier.
The Federal Energy Regulatory Commission, commonly known as FERC, doesn’t often draw headlines for fulfilling its duty of regulating electricity, gas, and oil transmission. However a Friday ruling from the U.S. Court of Appeals for the D.C. Circuit affirming a 2011 FERC order is poised to usher in major changes in the way utilities and regulators consider transmission and to open pathways for more renewables to enter the grid.
FERC Order 1000, as the order is known, makes a number of changes to how electricity transmission will be considered in the future. It requires grid investments that affect multiple states and utility jurisdictions to be coordinated — rather than the former system which allowed individual state regulators and utilities to opt in or out of regional efforts. It provides guidance on how to pay for expensive transmission projects and makes the process more flexible to help facilitate growth, especially for renewable efforts. It also eliminates utilities’ first right of refusal, which allowed incumbent utilities to decide first it they wanted to build transmission projects. This will help level the playing field for independent transmission projects.
Perhaps most significantly, Order 1000 demands transmission plans account for state-level policies on reducing greenhouse gas emissions and increasing renewable energy production. Currently around 20 states have Renewable Energy Portfolios operating to achieve these goals.
Overall the Order is ambitious and aims to accomplish two primary goals: facilitating the coordinated construction of the many new and updated electric transmission lines needed as fossil fuel and renewable energy projects come online in disparate parts of the country, and making it easier for large-scale renewable energy projects to connect to the grid.
The EPA’s recent announcement of proposed carbon dioxide regulations for existing power plants, which will be carried out by state-level directives, will likely dovetail well with these new transmission guidelines.
“This really is significant because now any time transmission is being considered it will have to take into account states that use renewable energy as a compliance tool to meet greenhouse gas emissions goals,” Gene Grace, senior council for the American Wind Energy Association, told ThinkProgress. “This means the grid will be built to meet renewable energy requirements.”
Grace said the real thing this order recognizes that hasn’t been addressed before is that “grid expansion brings benefits to everyone, including environmental benefits, and now these environmental benefits are required consideration.”
The U.S. electric grid is aging and messy. There’s a Western and an Eastern divide. Texas has its own grid (which has helped it build big, new wind- and solar-power transmission lines by state initiative). There are a number of regional transmission efforts splotching the map. The Southeast states pretty much do their own thing. This court ruling will ensure that going forward, FERC authorities undertake broad considerations that facilitate an integrated grid roll-out with all the infrastructure necessary to meet clean energy goals.
“We have an aging grid that needs billions of dollars worth of renovations and the question is how that money will be spent — on the smart gird technology that can hasten reliance on more clean energy or on string and chewing gum solutions that keep us wedded to fossil fuels,” Abigail Dillen, VP of Litigation, Climate and Energy for EarthJustice told ThinkProgress.
Dillen emphasized the importance of transparent regional and interregional transmission planning processes based on clear rules that will help the grid grow in a deliberate, rather than more haphazard, fashion. “We are thrilled and relieved that the D.C. Circuit has upheld FERC’s authority to make these needed reforms,” she said.
Both Grace and Dillen were part of a team that filed a brief in support of Order 1000.
The original order was challenged by 45 different petitioners made up of state regulatory agencies, utilities, and electric industry trade associations. They argued that FERC was overstepping its authority and that Order 1000 was “arbitrary and capricious and unsupported by substantial evidence.” However the seven-part ruling from the D.C. Circuit Court found that these “contentions are unpersuasive.”
John Finnigan, Senior Regulatory Attorney for the Environmental Defense Fund and also party to the brief in support of the Order, told ThinkProgress that while some of the petitioners may continue to pursue appeal others have started to form independent transmission companies to operate under the new rules. Companies like Trans-Elect Development Company, LLC. and The American Transmission Company own and operate independent transmission systems that build new lines connecting both fossil fuel and renewable energy projects. Natural gas, wind, and solar projects are often sited in remote areas where the resources are located. Creating a transmission infrastructure that makes the projects economical is a key element of bringing them online.
This shift to independent operators has already happened in the electricity generation business with power plants as states have deregulated retail electricity markets, but it is yet to happen on the transmission side. FERC has been pursuing this objective for a number of years.
“A few years ago FERC made it easier for companies to build independent transmission projects,” said Finnigan. “These new lines have mostly been for traditional energy projects because it hasn’t been easy to justify renewable projects until now.”