On July 31, the Senate Energy and Natural Resources Committee held its second oversight hearing on the U.S. transmission grid, this time concentrating on the siting, reliability and implementation of the new authorities Congress gave the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE) in the Energy Policy Act of 2005 (EPAct 2005). Most of the discussion focused on the National Interest Electric Transmission Corridor (NIETC) process and the federal “backstop” siting authority that Congress granted DOE and FERC, respectively, in EPAct 2005.
Participation at the hearing was good and included Chairman Jeff Bingaman (D-NM), Ranking Republican Pete Domenici (R-NM), and Sens. Robert Menendez (D-NJ), Maria Cantwell (D-WA), Jim Bunning (R-KY), Larry Craig (R-ID), Lisa Murkowski (R-AK) John Barrasso (R-WY) and Bob Corker (R-TN). Many Senators said they recognize the need to invest more in the U.S. grid and that the grid provides a number of interstate benefits, including reliability, opportunities to purchase wholesale power, access to renewable energy, and more.
Sen. Robert Casey (D-PA), a vocal critic of the NIETCs, testified strongly that DOE’s designation of a “broad swath” corridor that included most of Pennsylvania was made without adequate public input and consultation and without consideration of alternatives to transmission to solve congestion. Casey said he was opposed to implementation of the law, rather than the law itself. Sen. Menendez angrily accused DOE of designating a corridor designed to bring “dirty coal-fired electricity” to the Mid-Atlantic region, without adequate consideration of alternatives.
Sens. Domenici and Craig gave an equally strong defense of the NIETC process and the federal “backstop” siting authority. Domenici cited concern about electric reliability and his conviction that both provisions were needed to avoid potential future blackouts. Craig said he was convinced to modify his strong “states’ rights” position in recognition that the grid had evolved to become a national network, rather than a system of individual state transmission lines. Both Senators expressed sympathy, however, with Casey’s statements that DOE treated Pennsylvania’s concerns in an arrogant fashion in the designation process.
DOE Assistant Secretary Kevin Kolevar defended the agency’s NIETC process, saying that it published draft designations to allow more public comment before making final designations, although the statute did not require it. He also said the designations were of large geographic areas because DOE does not have siting authority; the designation of a narrower area would, effectively, have been exercising authority Congress did not grant DOE.
FERC Chairman Joe Kelliher defended the federal backstop siting provisions and said that current law, which gives states primary transmission siting authority, makes no sense in today’s electricity world. If Congress plans to revisit the NIETC and backstop siting sections of EPAct 2005, he would urge Members to follow the approach used for natural gas pipelines and grant FERC complete siting authority for interstate transmission facilities. Kelliher also told Congress that FERC needs additional authority to deal with cyber security threats to the grid.
Colin Whitley, Kansas Power Pool, testifying on behalf of the American Public Power Association, said that if the U.S. is going to “love renewables,” it cannot “hate transmission.” While recognizing that Regional Transmission Organizations provide services that have substantial value (such as providing non-discriminatory access and eliminating “pancake” rates), he said these achievements are overshadowed by the costs and problems created by centralized day-ahead and real-time spot markets for energy, ancillary services and capacity. Whitley also stated that FERC is over-using incentives to spur investments in new transmission, allowing transmission owners to help themselves to the “incentives smorgasbord.”