Rep. Jay Inslee (D-WA) is readying a bill for introduction, called the "Rural Clean Energy Super Highways Bill," designed to promote the development of new transmission facilities to make more capacity available for potential renewable resources.
The Inslee bill would authorize the President to designate areas that meet certain criteria as "National Renewable Energy Zones" and allow a surcharge to be levied on all transmission users in the region to pay the costs up-front of connecting renewable projects in those zones to the grid. It is unclear how the provisions would apply to transmission-owners in organized markets, such as ISO-NE, but it could possibly be used as an "overlay."
In addition, the Inslee bill would also:
Direct the President or his designee to identify and provide public notice of specific, additional renewable energy trunkline facilities and networks upgrades needed to substantially increase generation of renewable energy within each Zone, taking into account existing transmission plans for areas within a Zone;
- Direct FERC to allow private utilities that finance transmission needed to transmit electricity from a Zone to one or more load centers to recover "all prudently incurred costs and a reasonable return on equity" associated with the construction and operation of such new facilities;
- Permit interconnection lines from a renewable project to the grid to be "initially funded" by a surcharge on all transmission customers of the transmission provider or RTO/ISO;
- Allow state regulators, or other appropriate bodies with jurisdiction over private utilities serving load within a Zone, to jointly propose to FERC a cost allocation plan for high voltage transmission lines built to serve load. If no jointly proposed plan is approved by FERC, then FERC shall allocate costs of new high voltage transmission built in a Zone according to a "rolled in" transmission charge;
- If no privately- or publicly-funded entity commits within three years to finance the specific high voltage transmission facilities identified by the President or his designee, direct the federal power marketing administration (PMA) or the Tennessee Valley Authority (TVA) in which such facilities would be located to finance the construction of the facility and operate and maintain it;
- Authorize the Department of Energy to issue bonds, in an amount not to exceed $10 billion, and deposit those funds into a Transmission Fund in the Treasury to fund construction, operation and maintenance of the facilities by the appropriate PMA or TVA;
- Ensure that not less than 75% of the capacity of any high-voltage transmission line constructed by a PMA or TVA under this new authority is used for transmission of electricity from renewable resources;
Concern has been raised that a bill like this, if enacted, could increase costs associated with renewable power generation and transmission. Public power representatives and others have met with Rep. Inslee's staff and highlighted areas of technical and substantive concern. Some changes were made, but public power made clear they had serious concerns with the underlying measure. The bill is strongly supported by American Wind Energy Association (AWEA) and PPM Energy, the merchant power arm of Scottish Power, now part of the Spanish utility Iberdrola.
Rep. Inslee is a member of the House Energy and Commerce Committee and Natural Resources Committee, so he is in a key position to advocate for the bill's advancement. He plans to introduce the legislation shortly after Congress reconvenes in the fall.
On the Senate side, Majority Leader Harry Reid (D-NV) filed an amendment similar to the Inslee bill during debate on H.R. 6, the "energy independence" bill. Reid ultimately did not offer the amendment, but his staff said he is committed to this approach, and will introduce a stand-alone bill soon in the Senate.