Transcript Electric Transmission Siting:

Electric Transmission Siting:
Assessing the state v.
federal role
Is a
Showdown
Inevitable?
THE GEE
STRATEGIES GROUP
Robert W. Gee
Principal
NATIONAL CONFERENCE OF STATE LEGISLATURES
ANNUAL MEETING
ENERGY & TRANSPORTATION COMMITTEE
San Antonio, Texas
August 13, 2001
Today’s Focus
 What
is the problem?
 What are the issues?
 What are the arguments on both sides?
 What solutions are being considered?
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The Problem

Electricity demand has been growing, and
will continue to grow
 Volume of wholesale power trading
transactions is escalating
 Originally designed for local use,
transmission lines are now being used to
move power over longer distances
 Grid congestion is erupting
 Grid is under stress, and reliability is being
threatened
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Past and Future:
Surging Electric
Demand

From 1949 to 1999, U.S. population expanded 83
percent, but electricity sold by utilities grew 1,180
percent
 Per-capita average consumption of electricity in 1999
was seven times higher than in 1949
 For next 20 years, demand for electricity projected to
increase per year by 1.8 percent ( to 393 gigawatts, or
combined grids of Japan and Germany)
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393 GW = 1,300 New Projected Power
Plants
Projected New Generating Capacity and Retirements, 2000-2020
(gigawatts)
Source: EIA Annual Energy Outlook 2001
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Grid Use: Power Sales Have Been
Growing Dramatically. . .
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. . . But Transmission Investment
Has Been Steadily Declining. . .
Source: E.Hirst, “Transmission Crisis Looming?” Public Utilities
Fortnightly, September 15, 2000
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. . .Requiring a 200 Percent Increase in
Transmission Line Relief Measures To
Alleviate Congestion
Source: ABB, taken from Eastern Interconnection
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Transmission Grid
Transformation

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Local  multi-state  regional  superegional
FERC Order 2000: all public utility transmission
owners and operators required to submit filings to
create Regional Transmission Organizations (RTOs).
RTOs address essential transmission functions on a
regional basis, including grid operation, reliability,
congestion management, & planning and expansion
July 2001: FERC mandates consolidation of various
RTO proposals
Future Vision: 5 “Super RTOs” in Nation
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The Issues

With regional character of grid, can needed
transmission capacity be timely built under
current law and procedures?
 Who should decide whether new lines are
needed?
 Who should decide where new lines are
sited?
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Current Certificate and Siting Law

States & local entities hold authority to decide whether
lines are needed and where they are sited
 Legacy from era when transmission was primarily local
 Thus, despite emergence of RTO role, states still hold the
cards for determining whether and where new lines get
built
 But for interstate natural gas pipelines, federal law confers
certificate (“need”) authority on Federal Energy
Regulatory Commission with legally enforceable right of
certificate holder to enforce eminent domain authority to
site if necessary
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Current Status of State Siting
Authority (2000 Survey)


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
12%: do not conduct a state level review of
transmission line siting or were unaware whether they
had siting jurisdiction
78%: one primary state agency responsible for electric
line permitting (usually state PUC), with other state
and local agencies having input
33%: review transmission lines 100 kV
24%: review transmission lines > 100 kV
19%: review transmission lines > 200 kV
50% of state PUC’s see role as aiding dispute
resolution, either between utilities or between the
Edison Electric Institute/Resource Strategies, Inc.
utility and the Source:
public
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2000 Survey (con’t.)

“In regions of the country where transmission
companies, independent system operators
(ISOs), or similar types of organizations have
been established, state utility commission
regulatory authority is evolving. An increased
federal presence may emerge in an attempt
to resolve regional siting conflicts. At this time
no definite end-point has been attained.”
Source: Edison Electric Institute/Resource Strategies, Inc.
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Criticism of States Is Not New. . .
National Governors’ Association study:
siting and certification cited as critical
factors impeding construction of needed
transmission lines (1987)
 Federal Office of Technology Assessment
report : siting new electric transmission
lines deemed almost impossible because of
the obstacles encountered in regulatory
review and approval (1989)

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But It May Grow: Transmission Lines Claimed
by Some as Needed Today

765-kV line proposed by American Electric Power in Virginia and
West Virginia
 Two lines (230 kV and 345 kV) between Minnesota and
Wisconsin
 500-kV line between Georgia and Florida
 Expanded interfaces between Indiana and Michigan
 Expanded interfaces between PJM and New York and between
New York and New England
 Additional transmission from Wyoming to eastern Colorado
 Additional transmission facilities to serve the growing loads of
various areas, including Boston, New York City, Long Island, San
Francisco, and San Diego.
Source: E. Hirst, Expanding U.S. Transmission Capacity
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Most Noted Contentious
Cases

765-kV line proposed by American Electric Power in
Virginia and West Virginia: pending 10 years, earliest
expected completion by 2004
 Chisago-Apple River transmission line project: 39-mile,
230-kilovolt (kV) line between Minnesota and Wisconsin;
began 1996, construction anticipated by 2004 on scaleddown basis; 220-mile, 345-kV Arrowhead- Weston line
 300-MW transmission cable running below Long Island
Sound, linking New Haven, Connecticut, to Shoreham,
New York: rejected by Connecticut Siting Council March
2001
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Solutions Part 1: Give Siting
Power to FERC (The Case “For”)

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Increasingly interstate nature of transmission is undeniable; federal
role necessary for new facilities to facilitate interstate and
interregional transactions
Absent direct local benefit, state through which a utility line must pass
may be reluctant to authorize its construction, regardless of benefit to
interstate commerce
Capacity planning and siting must be coordinated regionally; role is
beyond that of individual state
New lines benefit the entire network (economically and from
reliability standpoint)
Federal authority can better coordinate diverse state and local interests
involved in process
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Solutions, Part 2: Leave Siting Power
with the States (The Case “Against”)

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States have not stood in way of valid transmission
proposals, even in Conn. where new route being chosen
FERC not necessarily more timely than states, evidenced
by longevity of pipeline cases
Pipelines not transmission lines: line of sight still at issue
for those not compensated; greater numerical opposition to
transmission lines
States have succeeded in siting all existing transmission
and generation thus far
Unlike FERC, states could choose between siting
generation in lieu of transmission
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Proposals to Confer Federal
Siting Authority
Sen. Frank Murkowski (R-Alaska) in 106th Congress (S. 2098): power
of eminent domain to FERC
 Sen. Mary Landrieu (D-LA) stand-alone bill: give FERC eminent
domain “back-stop” authority if state and local authorities fail to act
within 180 days
 Sen. Jeff Bingamen (D-N.Mex.) white paper: (1) authorize creation of
regional regulatory compacts charged with exercising jurisdiction over
transmission planning, expansion and siting, (2) give FERC siting
authority as back-stop capable of being ceded to “appropriately
constituted regional entities”; and (3) allow such bodies to exercise
all or some jurisdiction previously exercised by states currently at risk
of FERC preemption, such as setting regional reserve requirements,
maintenance requirements and market monitoring

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Current Positions of Other
State Organizations
National Governors’ Association: opposed to
federal preemption of state & local siting
authority; concur on need for transmission line
expansion & multistate cooperation; task force
formed to work with DOE
 National Association of Regulatory Utility
Commissioners: opposed to federal preemption &
reaffirm primary jurisdiction of states for siting;
support voluntary regional organizations that have
siting authority with federal “backstop” authority
to resolve regional conflicts

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Conclusion and
Recommendations

At minimum, states need to decide whether status
quo is sufficient
 If it is not, decide what to do even if desired
solution is not to give FERC siting authority
 Need to reach closure and implementation as
swiftly as possible on whatever is decided
 Spirit of Cooperative Federalism must prevail
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For More Information Contact:
The Gee Strategies
Group
Robert W. Gee
Principal
1954 N. Cleveland St.
Arlington, VA 22201
(703) 465-9181 (voice and fax)
(703) 593-0116 (mobile)
Email: [email protected]
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