‘An agressive new thing’ –How Sanders would ramp up federal role in electricity generation

Source: By Josh Siegel, Washington Examiner • Posted: Wednesday, August 28, 2019

Bernie Sanders’ climate change plan diverges from his rivals by envisioning a massive expansion of the federal government’s role in electricity generation as a means of getting more wind and solar onto the power grid.

Sanders, a self-described Democratic socialist, proposes to expand the use of federally owned utilities, like the Tennessee Valley Authority, to build out new wind, solar, energy storage, and geothermal power plants, as a fast-acting mechanism to achieve his goal of 100% renewable energy for electricity by 2030.

This would be a dramatic shift from federal owned utilities’ current focus on generating power from hydroelectric dams and fossil fuels.

“I am not sure he is proposing to nationalize the entire electricity sector, but he is proposing to be more aggressive in using federal power agencies to promote wind and solar on a utility scale,” David Spence, a University of Texas law professor who focuses on energy regulation, told me. “That is a really big change and an aggressive new thing.”

What Sanders would do: He is not exactly proposing to nationalize power generation, energy experts say, but the effort would be a colossal undertaking that would likely be met with resistance from private utilities and Congress, which would have to pass new legislation.

Essentially, Sanders wants to expand the use of Power Marketing Administrations, which are agencies under the purview of the Energy Department that operate transmission lines and sell electricity generated at federally owned hydroelectric dams in 34 states.

The four existing PMAs, are they are known, are the Bonneville Power Administration, Western Area Power Administration, Southeastern Power Administration, and Southwestern Power Administration. Sanders wants to create a fifth PMA to cover the remaining states and territories and expand the existing PMAs to build “more than enough wind, solar, energy storage and geothermal power plants.”

“This plan is unserious and, put simply, it is not going to happen,” Travis Kavulla, director of energy at the R Street Institute, told me. “This plan is causing everyone who knows an iota about the PMAs to give a big, collective eyeroll,” added Kavulla, who worked closely with the Bonneville Power Administration as a Montana utility commissioner.

Sanders also envisions the Tennessee Valley Authority, the nation’s largest public utility covering parts of seven southeast states, producing more wind and solar, shifting from its historical focus on coal power.

“Look, the TVA has done a lot of good work … What we need to do is have an aggressive federal government saying that we are going to produce a massive amount of energy from solar and from wind and from other sustainable energies,” Sanders said in an appearance on MSNBC last week.

Sanders vows to spend $1.52 trillion to convert the operations of federal utilities to focus on renewable energy, and an additional $852 billion to build energy storage capacity.

His campaign says the “revenue from sales of federally owned renewables” will help pay for his climate change agenda, which would cost $16.3 trillion to implement, an amount that Sanders says would “pay for itself” over 15 years.

What it all means: Ari Peskoe, director of the Harvard Electricity Law Initiative, told me he interprets Sanders’ plan to mean that PMAs would mostly be charged with renewable energy development instead of private developers. However, he said, existing private utilities could continue to deliver power to consumers. And presumably, regional grid operators and other actors would retain their responsibilities for ensuring the reliability of the power grid.

He said an unanswered question is whether PMAs would develop and build projects themselves or contract with established developers.

“Sanders is not ‘nationalizing the energy system,’” said Peskoe, who emphasized he was speaking in a personal capacity, and not on behalf of Harvard University’s views. “The wind and solar industries have scaled up tremendously over the past decade. Sanders’ plan would ignore the competitive wind and solar development markets in favor of PMAs and transform them into the largest renewable energy developers in the world.”

What the impact could be: Other experts said Sanders’ plan is not entirely unprecedented in its intent, using the power of the federal government to achieve a national policy goal. But they warned of potential consequences in disrupting growing private capital investment into renewables.

“Vastly expanded federal ownership of energy resources comes with risk,” a former federal official now working with clean energy companies told me. “If the federal government locks itself into certain technologies today, customers could pay for them for years in the future even after technology has advanced. Energy technology development is moving so fast that it may be better for investors to take on that risk, rather than customers via government ownership.”