New rules to reform electrical grids could boost wind and solar power

Federal regulators on Monday Comprehensive changes approved to how America's electric grids are planned and financed, in a move advocates hope will spur thousands of miles of new high-voltage power lines and make it easier to add more wind and solar power.

The new rule by the Federal Energy Regulatory Commission, which oversees interstate electricity transmission, is the most significant attempt in years to modernize and expand the nation's crumbling power grid. Experts have warned that there are not enough high-voltage power lines being built today, putting the country at greater risk of power outages due to extreme weather while making it more difficult to switch to renewable energy sources and cope with growing electricity demand.

The committee said that one of the main reasons for the slow pace of network expansion is that operators rarely plan for the long term.

The country's three major electricity grids are overseen by a mixture of utilities and regional grid operators who focus primarily on ensuring reliable electricity for homes and businesses. When it comes to building new transmission lines, grid operators tend to be reactive, responding after a wind farm developer requests a connection to the existing grid or once a reliability issue is discovered.

the New federal rulingwhich took two years to prepare, requires grid operators across the country to identify needs 20 years into the future, taking into account factors such as changes in the energy mix, the growing number of states requiring wind and solar energy and the risk of severe weather.

Network planners will have to evaluate the benefits of new transmission lines, such as whether they will lower electricity costs or reduce the risk of blackouts, and develop methods for splitting the costs of those lines between customers and businesses.

“We have to plan for our nation's grid for the long term,” said Willie Phillips, a Democrat who chairs the Energy Committee. “Our nation's aging grid is being tested in ways we've never seen before. Without significant action now, we won't be able to keep the lights on in the face of rising demand, extreme weather and new technologies.

The commission approved the rule by a 2-1 vote, with Democratic commissioners in favor and lone Republican Mark Christie opposing. Mr. Christie said the rule would allow states that want more renewable energy to unfairly pass on the costs of necessary grid upgrades to their neighbors.

“This rule completely fails to protect consumers,” Mr. Christie said. He said it “aims to facilitate the large-scale transfer of wealth from consumers to for-profit private interests, especially wind and solar developers.”

It could take years for the rule to take effect, and the commission could face legal challenges from countries concerned about the rising costs.

Nationwide, energy companies have proposed more than 11,000 wind, solar and battery projects, but many remain in limbo because there is not enough grid capacity to accommodate them. Furthermore, individual developers currently have to pay for network upgrades to accommodate their projects in a fragmented and slow process.

Some critics say this is like asking a trucking company to pay for an extra lane on a highway that all motorists eventually use. They say a better approach is to plan ahead for large-scale upgrades with costs shared among a wide range of energy providers and users.

But the issue of who pays for the network expansion has sparked angry debate.

Officials in states that are less enthusiastic about wind and solar power, such as Kentucky or West Virginia, say they may have to foot the bill for new multibillion-dollar transmission lines aimed at helping states like New Jersey or Illinois achieve their renewable energy ambitions.

To allay these concerns, the committee established guidelines on how to apportion the costs of new transportation projects. Before planning any lines, utility and grid operators are supposed to work with states on a formula to allocate costs to customers based on the potential benefits from new lines.

There are some precedents for this. The grid that handles electricity in 15 Midwestern states, known as MISO, recently approved $10.3 billion in new power lines, in part because many of its states have ambitious renewable energy goals that require more transmission. MISO estimated lines It would create up to $69 billion in total benefits, including lower fuel costs and reduced power outages. The grid operator was then able to split the costs even among states that did not have renewable policies but would share the rewards.

“It's very difficult, and not everyone got what they wanted, but we all agreed to sit in a room and figure it out,” said Carrie Zalewski, a former Illinois state regulatory official who now works with the American Clean Energy Association. Renewable Energy Trade Group.

Mr. Christie said the final rule did not give states enough power to object to how costs are shared. But Allison Clements, the other Democrat on the committee, said giving each state veto power was “a recipe for inaction.”

The rule would also require utilities and grid operators to consider new technologies that may cost more up front but can make grids more efficient and provide long-term benefits, such as advanced connectors that can carry twice the current as traditional lines.

Environmental groups and renewable energy companies praised the new rules.

“This is a great day in the fight against climate change,” said Sen. Chuck Schumer of New York, the Democratic majority leader, who urged the committee to pass a strong rule for grid planning.

Over the past year, Mr. Schumer and other Democrats have warned that efforts to combat climate change could fail if the nation's power grids are not fixed. Coal and gas-burning power plants are a major source of pollution that is dangerously warming the planet. While the Inflation Reduction Act of 2022 pumped hundreds of billions of dollars into cleaner alternatives like wind and solar, one of them… Final analysis It found that half of the climate benefits of this law could be lost if the United States cannot build new transportation at a faster pace.

It remains to be seen how effective the new rule will be, as it will depend on how network operators implement it. A 2011 attempt by the commission to encourage transportation planning It faltered greatlyThat's partly because many utilities have been opposed to new long-haul lines that might undermine their monopolies, said Ari Pesco, director of the Electricity Law Initiative at Harvard Law School. Given the decentralized nature of the country's networks, there is little federal regulators can do to force operators into compliance.

“I think this rule will be useful in parts of the country where there is already momentum for further transmission development,” such as the Northeast, Mr. Pesco said. “But in places where large facilities are resistant to further transmission, I don’t know if FERC can do that much.”

The new rule affects grid layout In 12 large regions across the countryBut it won't require data transfer planning to connect those different regions together, which some experts say is a greater need. The rule also would not affect the main grid in Texas, which is insulated from federal regulations because it does not cross state lines.

The rule also does not address the logistical and political challenges of building new long-distance power lines. It can take a decade or more for developers to locate a project through numerous jurisdictions, obtain permits from a variety of different federal and state agencies, and resolve lawsuits over corrupt views or damage to ecosystems.

The Biden administration recently finalized a program aimed at cutting the federal time allowed for some large transmission lines in half. But speeding things up further may require action from Congress, as lawmakers struggle to agree on new transition policies.

In a separate rule on Monday, the Federal Energy Commission, Outline specific situations It may override state objections to a small subset of new power lines.

The debate revolves around a set of ten “Electricity Transmission Corridors of National Interest” established by the Department of Energy It has been tentatively identified All over the country – places where the new lines will be particularly useful. If state regulators block or delay a project in those corridors, the Fed could step in to approve it.

But some experts wonder how often this might happen, because the Commission has historically preferred to cooperate with countries.