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Tying the West’s Energy Knot: Challenges and Recommendations in Interstate Transmission Siting (Part 3)

Wednesday, June 2, 2021
Nareg Kuyumjian

Nareg Kuyumjian

Research and Publications Intern, ELI

Parts One and Two of this blog series covered the debate and regulatory framework regarding interstate electricity transmission. Part Three will conclude the series by identifying key challenges energy policymakers should expect to face regarding interstate transmission siting, and policy recommendations on how to mitigate them.

Solar voltaic systemThere are three main points of contention that have and will continue to pose challenges to interstate transmission siting moving forward. First, checkerboard subnational authority composed of states with highly variable siting processes has a potential to be an obstacle for utilities. Indeed, understanding and overcoming variable siting processes across states in the Western Energy Imbalance Market (EIM), for example, requires serious adaptability. In Wyoming, for example, approval from local authorities is required prior to approval from the Wyoming Public Service Commission. Similarly, Colorado, Utah, and New Mexico—all high in renewable energy resource potential—place authority in the hands of local entities. Utilities will need to navigate different local and state processes to connect resources from inland states to CAISO, California’s energy market operator, and other energy markets in the EIM.

Second, pass-through states that transmit electricity even if they don’t consume it will continue to interpret the “public need” requirements for utility permits with a narrow, in-state lens and thus be reluctant to provide siting permits. Supplier states have a long history of rejecting transmission lines that don’t provide direct benefits to their residents. In Mississippi Power and Light Co. v. Conerly and Clark v. Gulf Power Co., for example, state courts did not consider pass-through lines as serving the “public need” if generated energy did not supply in-state end-users. This narrow interpretation of “public” has also posed a challenge in the EIM; for example, an Arizona state regulator explained the state’s decision to reject a transmission line to southern California by saying, “I don’t want Arizona to become an energy farm for California . . . [and] use our land, our air and our water.” This is especially relevant after the Supreme Court’s 2005 decision in Kelo v. City of New London, which established the precedent of referring to state or local determinations of “public use.”

Finally, untapped federal jurisdiction, if exercised, can lead to federal and subnational confrontations over siting authority. Each of the three main sources of federal jurisdiction, but especially the dormant Commerce Clause and the Environmental Policy Act of 2005 (EPACT05), have not been invoked effectually by the federal government. It has been argued that the dormant Commerce Clause, which grants Congress authority over interstate commerce, can be applied to various state limitations to interstate transmission. Moreover, EPACT05’s full range of backstop authority has not been explored.

There are a range of ways the federal government can expand its intervention. On one extreme, the federal government can establish a centralized siting process under the Federal Energy Regulatory Commission, which is the case with natural gas and railroads (previously state authorized). On the other hand, it could simply play a more active role in ensuring that sufficient consideration was provided in the benefits and costs of a project; this can allow the federal government to ensure regional benefits are included in benefit-cost analyses and are calculated sufficiently. Either way, greater federal involvement can pose a challenge for subnational authorities who will lose authority and might challenge utilities who stand to benefit from a more streamlined process.

In light of these challenges, I set forth the following four policy recommendations to ensure that interstate electricity transmission plays an enabling role in the energy transition:

Equity Is Local

There is a tendency in legal and policy analysis to consider local opposition to transmission siting as “not in my backyard” advocates; however, centering low-income communities of color that experience disproportionate levels of energy vulnerability in considering siting issues is integral to achieving energy equity. This means making space for marginalized communities at the negotiating table and seeing that as an opportunity to build consensus, not an obstacle that inhibits progress.

Transmission Dividends

To mitigate a limited interpretation of “public need” employed by pass-through states, utilities should be encouraged to provide transmission dividends to communities through which lines cross. Even if a community does not reap the electricity benefits of a line, providing monetary compensation to that community would allow them to be considered as part of the larger, regional public.

Under Is Sometimes Better

Natural gas is transported through 2.4 million miles of largely underground pipelines, while electricity transmission lines are largely aboveground. In 2006, only about 0.6% of high-voltage transmission lines were underground and current data indicate that only 25% of new lines are being undergrounded. Investing in undergrounding transmission lines where possible may serve to prevent many of the above-discussed concerns by avoiding local concerns and thus helping in permitting processes.

Federal Boost

A lack of regional considerations in interstate siting stands to gain from a more active federal role. This may start with FERC issuing a new order explaining its jurisdictional authority that remedies the concerns raised in the Piedmont decision. It can also take the form of certain regional requirements FERC may mandate in transmission line benefit-cost analyses. Whatever its employed strategy is, the federal government has the statutory authority to actively build a more reliable and resilient national electricity grid.

All blog posts are the opinion of its author(s) and do not necessarily reflect the views of ELI the organization or its members.