In the final year of his first term, the pieces of President Joe Biden’s grid strategy to ensure low-carbon energy can be delivered to cities, factories, digital data centers and electric cars are coming together.
Last week, the Department of Energy unveiled its long-awaited “corridors” strategy, drawing broad preliminary pathways across U.S. regions where it wants private investors to build a matrix of major power lines over the next decade.
Then on Monday, the Democratic majority on the Federal Energy Regulatory Commission issued its equally anticipated national policy for how electricity planning regions should map out future projects.
Together, the actions out of FERC and DOE are prescriptions for an unprecedented doubling of high-voltage capacity on which Biden’s clean energy pledges depend. That means siting as many as 350,000 new, unpopular transmission towers (by one expert analysis) and paying for long-distance lines that may cost $8 billion-$10 billion each.
“You’re working in that decade-long planning time frame,” said FERC Commissioner Allison Clements. “So from my perspective, let’s get going.”
The outcome of the Biden-era electricity policy that’s pushing for big, interconnected power systems turns on the November election. Unless the GOP presidential ticket somehow doesn’t include former President Donald Trump, Biden faces a relentless critic of the energy transition — and the use of federal power to boost electric vehicles, wind power and clean energy technology.
The result of constant uncertainty about the direction of U.S. energy and industrial policy from one election to another has helped to stunt the growth of regional electricity grids. Top energy experts told E&E News that the support offered by the DOE corridor initiative could attract more big projects by transmission developers, and the FERC rule could lead utilities that currently own transmission to build longer lines.
“The DOE corridors provide a very helpful signal that important transmission needs exist on these corridors,” said Johannes Pfeifenberger, principal with the Brattle Group consultancy, who co-authored six of the studies underpinning DOE’s grid planning.
The combination of DOE financial support and the FERC planning and cost-allocation rule “may just be enough to get projects developed,” Pfeifenberger said.
Richard Glick, a former FERC chair early in the Biden years, who helped draft the grid planning proposal, said creating a compliance process for grid operators is a yearslong process. “But I believe the rule will be transformative and eventually expedite transmission development,” he said in an interview.
Those hopes weren’t shared on the other side of the U.S. political divide.
The FERC rule was denounced in scorching language by the commission’s single Republican, Mark Christie. “The final rule should be seen for what it is: a pretext to enact, through administrative action, a sweeping legislative and policy agenda that Congress never passed,” Christie said in his dissent in voting against the rule.
Its goal is “to serve the profit-making interests of developers of politically preferred generation, primarily wind and solar, and to serve corporate ‘green energy’ preferential purchasing policies,” he wrote. He predict the rule invited legal challenges from industry.
‘Let us do it our way’
The electricity sector’s most common response to the FERC proposal after it was rolled out more than two years ago was: “Let us do it our way.”
The industry’s most powerful voice, the Edison Electric Institute representing investor-owned utilities, initially welcomed the regulatory proposal but insisted the rule had to be “flexible” and respect how things are done in all the grid’s enormous complexity. The final rule did not create that flexibility and was a disappointment for that and other reasons, EEI vice president Phil Moeller said this week.
Hopes for a huge grid expansion through DOE policy and FERC regulation are “pie in the sky,” said Mario Loyola, a senior fellow at the Heritage Foundation and a professor of environmental law at Florida International University. Loyola was an associate director of the White House Council on Environmental Quality during Trump’s term.
“Transmission expansion has only become more difficult,” Loyola said. “These are problems only Congress can solve.”
Likewise, the National Association of Regulatory Utility Commissioners said it was generally disappointed by the significantly diminished state role envisioned by the FERC order with respect to transmission planning and cost allocation.
Two maps illustrate the challenge and the strategy that the two policies confront.
One, based on analysis of federal data by the nonprofit Niskanen Center, shows the current grid’s limited capacity to move power long distances — either to deliver power to cities from prime wind and solar areas or to wheel in emergency power to regions wracked by extreme weather.
Only the Western U.S. has regional transfer capacity between regions equal to at least 15 percent of peak power demand in the larger of two neighboring regions, a minimum level of sharing potential, experts at a FERC workshop suggested.
Texas, where most the state is islanded from its grid neighbors by choice, and the Southeast U.S., where large power companies own power plants and transmission lines — prominently Southern Co., Entergy Corp., Duke Energy and the Tennessee Valley Authority — have fewer connections with neighboring regions. When extreme winter weather assaults hit Texas, in 2021, and Eastern states the next year, the Texas system and Southeast utilities could not import critical power supplies from outside because of limited connections, federal investigators concluded.
Although a few big interregional lines are under construction, their overall impact is small.
The next big issue on FERC's plate is whether to advance on suggestions that it set minimum interregional transfer requirements, said Rob Gramlich, president of Grid Strategies. A report due late this year or early next year from the North American Electric Reliability Corp. will provide new analysis of interregional grid issues.
The second map, issued last week by DOE, shows tentative pathways for National Interest Electric Transmission Corridors, the term Congress created to designate highest-priority routes for future power flows. The map does not describe specific locations or rights-of-way, which have not yet been chosen.
The “Midwest-Plains” pathway generally tracks the route of Chicago-based Invenergy’s 800-mile Grain Belt Express. Other DOE corridors don’t have a proposed project waiting to enter, department officials said.
The preliminary corridors map ignores the Southeast, a center of opposition to the DOE plan.
DOE has opened a 45-day window seeking comment on the proposed corridors. Once the final decisions are made, DOE will analyze and report on environmental impacts of building high-voltage transmission within designated corridors. That is likely to take two years, even with a new, expedited DOE-led review.
Only then could projects within the corridors move to final planning, permitting and construction.
The world in 2028
The Brattle Group's Pfeifenberger and other experts interviewed this week sketched out what the two policies might look like around 2027 or 2028, if all goes forward as the White House hopes.
Utilities or independent transmission developers would be chosen to run new lines down the approved pathways. They would be eligible for DOE support from the $2.5 billion Transmission Facilitation Program created by the bipartisan infrastructure law and the $2 billion Transmission Facility Financing Loan Program included in the Inflation Reduction Act. DOE could also purchase up to half of a new line’s power for resale as an “anchor tenant,” further reducing the project’s financial risks.
Meanwhile, FERC-regulated grid operators along the line’s way, following the new commission policy, would have fitted the lines into a 20-year plan to meet the region’s power requirements and synchronize it with existing lines. The FERC rule contemplates that state officials — offered a “seat at the table” for the first time — would have worked out a plan to share the costs among state ratepayers.
The key players are the more than 60 utilities and organizations that operate regional power systems, where supply and demand for electricity must be minutely balanced at all times.
Some are sprawling organizations like the 13-state PJM Interconnection based in Valley Forge, Pennsylvania, or the 15-state Midcontinent Independent System Operator. The Bonneville Power Administration, formed in the New Deal to deliver hydropower, is a critical power supplier in the Pacific Northwest. New York and California operate their own networks, while in the Southeast, dominant utilities manager both power supply and flows.
Their missions are common: Keep the lights on. Their methods are as varied as their region’s politics.
The new FERC policy requires these planning organizations to look far ahead by considering several scenarios about how demand may grow. That could include accelerating power needs from data centers and electric vehicle sales.
One planning choice could include simply replacing an over-age, 230,000-volt line with the same capacity, or rebuilding the line with bigger cables that carry 345,000 volts, Pfeifenberger said. That would add 1,000 megawatts of new capacity for an additional cost of 20 percent, “an investment well worth it, given the likely long-term needs,” he said.
Or, as FERC had advised, planners could call for investments in “grid-enhancing technologies," the catchall name for digital devices that determine when favorable weather conditions allow more power to be safely dispatched over a line.
Another option could be replacing an existing cable with an advanced version with lighter, stronger carbon-fiber center cores, boosting capacity that way.
Rather than try to force its corridors program on the greatly fragmented, diverse electric sector, DOE has doubled down on outreach. Officials there hope to build a constituency for a much larger, efficient power system.
“They chose to act after thorough consultation and analysis, in order to make the rulings legally and politically sustainable,” Gramlich said. “That was smart.”
In the next few years, a key factor in the policies’ fates will not only be this year’s elections outcome, but the future shocks delivered by extreme weather.
“The old notion that some regions want more transmission and others don’t is really a thing of the past,” Glick, the former FERC chair, predicted.
“States throughout the country," he said, "are finding themselves in a situation where due to load growth, extreme weather and increased customer interest in cleaner energy, they will need more transmission capacity and need it as soon as possible.”
