House Hearing on Transmission Hits California Live Wires

24 May 2021

Barriers to transmission needed for clean energy growth in California and across the country can be overcome, advocates told the House of Representatives Select Committee on the Climate Crisis May 20.

Wildfires and freezes “have left Americans in the dark and in danger just in the last four months,” Rep. Kathy Castor (D-FL), the committee chair, said opening the session. Drought and new fires are raising fears of “another long and brutal fire season” in the West, she added. A key solution is modernizing the electric grid. The American Society of Civil Engineers gives the system a C-minus rating.

U.S. power sector emissions “were 40% below 2005 levels and 40% of electricity came from carbon-free resources” in 2020, Edison Electric Institute General Counsel, Corporate Secretary, and Senior VP for Clean Energy Emily Sanford Fisher testified. That will continue, driven by falling natural gas and renewables costs, new technologies, customer demand, and federal and state regulations and policies. But continued growth depends on a modernized transmission system.

Planning, permitting, and cost allocation are the three major barriers to a renewed transmission system. New rules and regulations can lower them, ITC Holdings Corp President/CEO Linda Apsey told the committee.

Breaking down barriers

Congress and the Federal Energy Regulatory Commission (FERC) can require “transmission-first” planning to deploy or upgrade transmission where renewable resources are abundant, Apsey said. That would replace the current practice of building transmission for each project, driving growth by reducing transmission and renewables developers’ risks and costs.

New rules also can streamline permitting and siting processes without undermining environmental protections, she added. Third, FERC can implement cost allocation policies that spread costs fairly to developers who benefit, she said.

Proposed House legislation creating grants for siting and permitting costs (HR 1512) or establishing a transmission investment tax credit (ITC) for transmission (HR 7172) could help.

“We need both because transmission development is incredibly complex, costly, and can take ten years,” Aspey said. The Brattle Group estimated that the need for transmission investment could be $40 billion per year from 2031 to 2050, she added.

Siting and permitting in California is significantly more involved and expensive than other places, though the California Independent System Operator (CAISO) planning process has improved, Brattle Group Principal Hannes Pfeifenberger told California Current

Cost allocation within California “has largely been resolved” through access charges. But for interregional or inter-jurisdictional projects, “it is no better than anywhere else,” he added.

A key lesson from the February freeze is that transmission can make “a bad situation less awful,” because “networked systems performed better than isolated systems,” Grid United CEO and veteran transmission developer Michael Skelly testified. The upper Midwest had less severe outages than Texas because its interregional transmission interconnected with other systems’ supply.

There are 22 shovel-ready transmission projects that a recent study showed would enhance national reliability by interconnecting 60 GW of new renewables capacity, Skelley said. A tax credit for transmission would drive development by compensating developers for inadequate planning and cost allocation solutions that lower returns, he added.

840,000 more jobs

With the ITC, investment in new transmission could offer huge economic benefits, International Brotherhood of Electrical Workers Utility Department Director Donnie Colston told the committee. Those 22 shovel-ready transmission projects and an ITC would create 240,000 transmission jobs and 600,000 more transmission-related jobs.

The U.S. electricity system is called the biggest machine ever built and it powers a $22 trillion economy. But it is more than a half century old, he added. With the climate crisis and coming transportation and building electrification, modernizing the system is “even more pressing.”

Rep. Mike Levin(D-CA) asked about likely job creation and benefits.

One proposed New England transmission project will cost $950 million and provide 600 “blue collar union construction and manufacturing jobs” and 800 indirect jobs, Colston replied. It also will provide an estimated $440 million in compensation, $18 million in annual property taxes, and reduce customer bills $140 million.

The ten years or more it can take to plan, permit, construct, and energize new transmission must be addressed, EEI’s Fisher stressed. Policymakers must require planning that addresses policy and goes beyond permitting and cost allocation to support regional issues, like wildfire mitigation or offshore wind interconnection.

Opposition in an historic moment

We “absolutely share the same objective” to upgrade the transmission system, including “fundamental changes” to address the barriers described, Ranking Member Rep. Garret Graves (R-LA) told Chair Castor. But policymakers must avoid unwise spending.

It is “essential” to talk about permitting policy changes that Democrats and Republicans agree on,” said Rep. Kelly Armstrong (R-ND). He proposed extending the Federal Permitting Improvement Steering Council authority to resolve conflicts in permitting. EEI’s Fisher agreed.

Germany’s economy faced “chaos” without fossil fuels and nuclear power, Rep. Gary Palmer (R-AL) said. How do you expect to achieve reliability without backup?” he asked.

California’s 33% renewables by 2020 goal was considered unrealistic, but in April CAISO had almost 95% renewables for a few seconds and, with modern technologies, responded Rep. Jared Huffman (D-CA). “What was thought impossible is suddenly inevitable, no matter what opponents argue with last century’s thinking.”

This is “a historic moment,” Chair Castor added. “It offers a once-in-a-generation opportunity to invest in America by renewing and modernizing its grid.”

–Herman K. Trabish

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