Common Tragedies

Thoughts on Environmental Economics

More green infighting – federalism edition

Posted by Rich Sweeney on January 8, 2009

Or “Electricity Transmission Clusterf*ck Story of the Day”. From Climate Wire (more CT commentary on transmission here):

States defend turf as Congress weighs expanding power over grid (01/08/2009)

Evan Lehmann, E&E reporter

A top utility regulator expressed concern yesterday about states losing approval power over proposed transmission lines, underscoring the challenge of updating the nation’s aging web of power lines as new sources of electricity, like wind, come online.

New Jersey utility regulator Frederick Butler, who presides over a national group of state commissioners, reacted to plans in Congress — and to suggestions by President-elect Barack Obama — that point to growing support for federal jurisdiction over the placement of transmission lines that could carry energy between states.

“We don’t like the idea of pre-emption,” Butler told reporters. “We don’t want to be just told what to do. We want to be consulted. We want to have a voice.”

He added that states should have “veto” power over proposed lines that could have negative impacts on the environment and rates in local regions that federal officials might not fully understand.

The assertions come as Congress considers ways to create a national grid that is more reliable, wastes less power and is able to move a growing amount of renewable energy throughout the country. One plan calls for $75 billion to be spent constructing a high-voltage “backbone” that would connect major energy centers around the country.

Congress took the first step toward a national grid in 2005, when it gave the Federal Energy Regulatory Commission authority to override states in congested areas and to give the go-ahead for new lines that serve the national interest.

So far, that new power is untested. One utility has taken advantage of the rule, though the outcome is still pending. Southern California Edison is asking FERC for permission to build a 270-mile line from the Palo Verde nuclear plant near Phoenix to Palm Springs, Calif. Edison appealed to FERC after the Arizona Corporation Commission rejected the plan, saying it would cause environmental damage and boost prices in Arizona.

Obama wants a ‘whole new’ grid

It’s unclear where Obama stands on the thorny issue of pre-empting states. But he has expressed support for significant transmission upgrades. In October, he said one of the “most important infrastructure projects that we need is a whole new electricity grid.”

“Because if we’re going to be serious about renewable energy, I want to be able to get wind power from North Dakota to population centers like Chicago,” he added.

Butler pointed to a downside to that notion, though he generally agrees that upgrades are needed.

Installing a superhighway of transmission lines makes it easier to access power produced from faraway coal plants, he said, rather than work harder on local efforts to save energy. It could also mean that developers are less likely to build local alternative energy projects, like wind.

“The more transmission you build, the less impetus there is to do efficiency,” Butler said.

But he acknowledged that “strategically sited” transmission lines could bypass power plants in coal states, while running through countryside laced with wind farms to promote clean energy.

Butler is president of the National Association of Regulatory Utility Commissioners, a group that includes regulators from every state. The diverse origins of the association’s members make it difficult for them to agree on specific policies.

Butler, for example, acknowledged that he’s “open to the concept” of a nationally administered grid. But that’s not a consensus viewpoint within the association of regulators, many of whom vigorously defend their states’ jurisdiction over transmission siting.

“I’m open to the concept of having someone at the national level oversee this, because … there is some need for a national grid that is not a byzantine, jerry-rigged” grid, he said. “But at the same time, I don’t think states should be pre-empted out of that.”

Regulators sitting on the association’s climate change task force are assembling in Washington over the next two days to update its policy on global warming. Currently, the group supports federal legislation to reduce greenhouse gases through a cap-and-trade program.

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3 Responses to “More green infighting – federalism edition”

  1. Thom said

    That coal plants would utilize new transmission infrastructure is definitely true (the same would go for utility grade storage intended to smooth out wind power – the coal plants would benefit from it too). The real question is whether or not we should care if new infrastructure investments that can help bring wind or solar resources to market benefit existing coal producers. I say no. If you want to ‘harm’ existing polluters, make them pay for pollution. But don’t inefficiently route “green” transmission lines away from coal plants, just so you can be sure none of those evil coal guys benefit.

    There is also an obvious incentive problem here: what would a state regulator rather spend resources on – a power line running through his/her state with no immediate benefit to him/her/the ratepayers, or local efficiency programs? I’m not saying one is better or worse than the other, its just that its not surprising these guys aren’t rolling over without a fight.

  2. [...] What do you think about federalizing the electric grid? The state utility regulators are already rankling over this prospect, but it would seem necessary in full or in part to ensure long-term renewable [...]

  3. Carlos Ferreira said

    I suppose a well integrated infrastructure would help bring down the dinosaurs. The question here is not cutting supply from polluters, it’s reducing the difference in cost between producers of electricity that emit CO2 and those who don’t. A cap-and-trade scheme can do that. Not having an overreaching grid is just a way to protect producers.

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