Renewable-Rich States Push Feds to End Electricity Grid Logjam

A $2.5 billion, 550-mile power line designed to transport 4,500 megawatts of wind-generated clean electricity from rural New Mexico to cities like Los Angeles, Phoenix, and Las Vegas hungry for zero-carbon energy seemed ahead of its time.

And it was, by nearly two decades.

Line developer David Getts has been waiting more than 16 years and four presidential administrations to see his company’s SunZia project cross the finish line. He’s now planning a service date of 2025.

“Putting that much money at risk in one project is kind of crazy,” Getts, general manager of SouthWestern Power Group, told a crowd of several hundred energy lawyers and regulators gathered in Washington last month. “Very few companies in the United States will ever do that again, and I can tell you my company won’t.”

That grim assessment is the backdrop for U.S. energy regulators this year as they try to lower barriers for long-haul transmission lines. Transmission projects can take years to complete—if they survive—amid local opposition, protracted permitting and legal challenges, and disagreements among states about how to pay for them.

This summer, the Energy Department is working out details of its Building a Better Grid Initiative, a package of policies that include a $2.5 billion program to buy power from stalled projects.

And the Federal Energy Regulatory Commission has proposed rules that seek to smooth out regional transmission planning and costs, including a commitment to bring states to the table to hash out differences. It plans to unveil another prong of rules, focused on interconnecting new power plants, on Thursday.

Sweeping Action Absent

In largely rural states with massive amounts of wind and solar generation to export, federal plans have so far stopped short of sweeping, concrete action needed to move projects quicker, state officials said in interviews.

In New Mexico, a 2020 state-sponsored study found 11,000 megawatts of renewable energy, but transmission lines could only export 900 megawatts to the rest of the West.

State officials are pushing for streamlined permitting and the creation of a regional transmission organization that could take over planning from utilities that haven’t done enough it, said Joseph M. Maestas, chairman of the New Mexico Public Regulation Commission.

“There’s absolutely no coordination in most of New Mexico,” Maestas said. “The stage has been set for our state to be a major Western exporter of renewable energy, but we still have many, many limitations.”

A Role For States

The Biden administration has been looking to state officials who have set ambitious renewable energy goals to produce and consume more clean power. The national goal is net-zero greenhouse gas emissions from the U.S. power sector by 2035.

While federal energy officials oversee interstate natural gas pipelines projects, electric transmission lines fall to state officials and a patchwork of regional planning schemes.

In the Northeast, Midwest and California, regional transmission organizations that report to FERC can develop plans—but in the Southeast and West, no such organization exists. Renewable energy advocates and policymakers have pressed for those organizations to expand to those regions.

Transmission gridlock has caused a backlog of new generation plants, virtually all renewable energy or batteries, waiting to connect to the grid.

A report last year produced by the group Americans for a Clean Energy Grid identified 22 “shovel-ready” projects in every region, including SunZia’s line, that could be finished if federal officials enacted policies such as the ones pursued this year.

FERC’s first rule on transmission—proposed in April and subject to public comment—would require utilities to draft regional plans that forecast 20-year trends. It enshrined the role of state officials, key to winning over Republican Commissioner Mark Christie, a former state regulator.

The Energy Department will also carry out a Transmission Needs Study and a 15- to 30-year transmission planning analysis to identify high-priority national corridors and smooth out the process.

Maria Robinson, nominated to lead the Office of Electricity, told Congress this year the department should ensure “transmission and distribution projects are built in optimal locations with minimal roadblocks.”

“We continue to see this need for additional deployment, working with states and utilities to build new transmission assets and upgrade aging grid infrastructure,” said Robinson, a former policy director for Advanced Energy Economy.

But the Senate Energy and Natural Resources Committee last month deadlocked on advancing her nomination to the full Senate, so Robinson will have to wait before she can begin addressing the issue.

Seeking Stronger Rules

State officials and transmission developers have generally praised the federal policy moves.

“We need a national policy instead of regional or fragmented policies,” said Jason Stanek, chairman of the Maryland Public Service Commission and member of a joint task force with FERC on transmission. Maryland imports roughly 40% of its electricity from other states, according to federal data, raising the importance of working with neighboring states, Stanek said.

Some state officials are looking for even stronger federal rules on transmission.

Last year, Congress granted federal energy officials the power to override state decisions to block transmission lines. Officials have said they don’t have any imminent plan to use such authority. And a proposed investment tax credit for transmission has been stalled this year within Democrats’ broader climate legislation in Congress.

In New Mexico, 35% of the state’s land is federal or tribal land, making transmission routes difficult without an overhaul in permitting and quicker environmental reviews.

New Mexico set clean power goals by mid-century, but electric utilities’ reserve margin—defined as capacity minus demand—is being squeezed as coal plants shut down without the renewables to replace it, Maestas said.

Spreading Benefits

Other state officials want FERC to go further in broadly spreading costs and securing transfer of power between regions.

“If you have an area that is already burdened by hosting these facilities, and their land is burdened, then they shouldn’t also have to pay a large amount of the cost of the lines running through them,” said Andrew French, a commissioner on the Kansas Corporation Commission.

Nearly half of the electricity generated in Kansas comes from wind power, and it exports 10 to 20% of the power it produces to other states.

“I would’ve liked to see some sort of express requirement,” French said, to “protect those local areas that aren’t necessarily using the resources from being burdened with an inordinate amount of the costs.”

Given SunZia’s challenges, it’s difficult to imagine broader transmission development speeding up anytime soon, Getts told Bloomberg Law after his talk last month.

Getts is motivated by the value such transmission lines can unlock, and the SunZia project is “very close to success,” he said. But local opponents have argued the SunZia’s route is three times longer than necessary and will damage the San Pedro River ecosystem and threaten bird habitats.

“What can the federal government do to improve the efficiency, the speed of this?” Getts said. “My experience says: Not very much.”