Battle Lines

How will electricity get from where it’s made to where it’s used if more of it is going to come from renewable energy?

Would it be better to develop small local renewable and other non-traditional ways to generate electricity and add short transmission lines nearby?

Or would it be better to go big?

Should major renewable resources be developed where they are most plentiful, with new long-distance power lines to get that electricity to where the most people live?

While engineers draw support tower designs and compare wire sizes, decisions about how to modernize the nation’s power grid are getting complicated. State lawmakers, regional planning commissions, and federal policymakers all have something to say about what they think is best.

But for electricity consumers, it all comes down to a key question. Who will pay for what?

Should the people who use power from new energy sources be the only ones who pay for transmission lines to bring that electricity to their location? Or should everybody pay part of the construction costs because the whole nation benefits from an improved economy?

A patchwork of ownership
To understand what’s at stake, it’s important to know that the phrase usually used in discussing the shipment of electricity, “the nation’s power grid,” does not really describe the transmission system as it is today.

First of all, it is not a “grid” like the straight lines and little square boxes on graph paper. High-voltage power lines go every which way—up, down, and around hills, through forests, across rivers, and branch off in zigzags. Some states have a lot of transmission lines, while other states have only a few.

It is not “the nation’s,” either. The vast network of power lines does not belong to the federal government. All the pieces and parts have separate owners. This includes for-profit investor-owned utilities, nonprofit public power companies, and member-owned, not-for-profit rural electric cooperatives. Each kind of business has different expectations when it spends money to build new transmission lines.

Traditionally, decisions about when and where to build transmission lines within these irregularly shaped systems have been based on local conditions. As the number of people and businesses in an area expands, new generating plants and transmission lines are added. Individual state public service commissions keep a close eye on proposed transmission line construction projects, comparing the costs and benefits for electricity users in their own states.

That’s the “bottom up” approach, matching construction projects to local resources and local needs. In this system, bulk power typically moves through relatively short stretches of transmission lines.

Gradually, as these local systems served more customers, electric utilities began to see the value of making more connections to their regional neighbors. These interconnections provide paths for blocks of electricity to move within regions, and to and from nearby regions to keep the supply of electricity steady and reliable. Large chunks of electricity do move farther distances, but not across the entire continent.

A very confusing rule
As electric utilities within a particular state focus on meeting the energy needs of local electricity consumers, they must do so within the framework of many overlapping national laws.

The United States does not have a single document that spells out a national energy policy. Instead, hundreds of rules from the Federal Energy Regulatory Commission (FERC), the North American Electric Reliability Corporation, and the Environmental Protection Agency spell out national goals. This is the “top down” influence, and every electric utility must consider these rules as part of every business decision.

A complicated new rule called “FERC Order 1000” adds a new level of federal involvement in the way utilities plan, design, operate, and charge customers for the costs to build new transmission lines within the bulk power system.

FERC Order 1000 seems to require that states work together in the regional planning process. It also seems to say that the costs to build new transmission lines should be paid only by those who benefit from new power resources.

But then again, maybe it doesn’t.

The language of the new law is so complex that even electric utility experts are puzzled by the real meaning. In one interpretation, a new transmission line that crosses a state but does not deliver power within that state would provide no benefit to the consumers there. They would not have to pay for the construction costs.

But in another interpretation, if consumers somewhere else within the region do benefit—not in the sense of receiving the electricity but in the sense of reaching certain environmental goals—then everybody along the path of the transmission line would be required to pay the extra costs to build it.

Lawsuits are already in progress to try to pin down what “benefit” really means, and exactly how utilities can pass along the building costs for new transmission lines to electricity consumers. If the top-down approach dominates the older bottom-up style, higher electricity prices for many more consumers seem likely.

KEYWORD EXCLUSIVE: POWER PLANNING

To read more about electric co-op support for local and regional authority in transmission line planning, go to power planning.