Increasingly common severe weather events are catapulting America’s aging power system into the headlines.
Late last year, millions of people across the United States lost power during winter storm Elliot and dozens of people died. When winter storm Uri struck Texas in February 2021, more than 200 people perished.
Indeed, when the lights are out for even a few hours, life as we know it is disrupted, often with tragic consequences.
During multiple severe weather incidents over the last decade, many electricity generation plants fell victim to extreme heat or cold. Few people outside the industry realize that when a plant fails in one area, power must be delivered from far away to keep the lights on. But that approach only works when the power grid, or the regional transmission network, has enough capacity to move large amounts of power over long distances.
Despite increased attention on the grid from the public and lawmakers, little actual policy has passed. With divided government in the current Congress, leadership will likely need to come from states to collaborate on regional grid plans and from the nation’s transmission regulator, the Federal Energy Regulatory Commission.
In 2021 and 2022, Congress and federal executive agencies almost achieved three goals that could have transformed the grid:
1. A tax credit for large-scale interregional transmission would have made new lines cheaper for consumers and eased the path to cost recovery and investment.
2. A proposed FERC rule would have made transmission planning more proactive for long term reliability and to connect the future energy mix in each region.
3. And a bill from West Virginia Senator Joe Manchin would have addressed cost allocation and streamlined the federal permitting process.
But as of now, none of those measures are in place.
Some smaller transmission measures did make it into IRA and the Infrastructure Investment and Jobs Act passed in 2021. But grid funding from these laws is in the range of $5 billion—not a particularly impactful amount in a sector that spends $5 billion every few months. Plus, the focus of these laws is on loans, which few transmission developers want to use because the problem is not access to initial capital but recouping that money when the project is complete.
Without much help from Congress, electric utilities and state and federal regulators need to step up.
Over the last two years, FERC collaborated with state regulators to create a promising proposal for transmission planning that would have, for the first time, required utilities to plan on a long-term basis for reliability and anticipated future energy sources. Unfortunately, whether intentional or not, the proposal includes loopholes.
Instead of firmly requiring utilities to plan for reliability and future energy sources, the Commission proposed only to make those considerations optional. Unless strengthened, the result could be a toothless piece of guidance the industry ignores.
Encouragingly, the newly designated Interim FERC Chair, Willie Phillips, recently stated reliability and transmission will be top priorities this year. An opportunity exists to plug the loopholes and pass a rule that makes long-term reliability planning a requirement.
Meanwhile, no state, utility or region needs to wait for FERC’s action. Each region can produce their own plans for the future of their power grid and submit those plans to FERC for approval on cost allocation and recovery. FERC tends to approve proposals when regions work together to create a cohesive roadmap.
There are many opportunities to increase delivery capacity with new technologies over existing transmission corridors, which can happen quickly while bigger plans are developed.
The California and Midwest systems, for example, are already making their own plans with active involvement from states and utilities in those regions. Both have incorporated expectations of the future resource mix and included reliability in their long-term plans. Almost all of the Midwest’s expansion plans utilize existing corridors, making new construction easier.
For both reliable service and climate mitigation, there is no alternative to pressing forward with ambitious grid planning and policies. Reliable, affordable and clean power depend on it.