DOE searches for certainty in the grid’s future

Source: Peter Behr, E&E News reporter • Posted: Monday, November 19, 2018

Are the barrages of extreme weather and growing cybersecurity threats increasing or reducing the need for new high-voltage transmission lines?

A room full of officials and experts from power companies, grid operators and research labs never resolved the question, the first of a page full of queries posed by Department of Energy staff at a workshop yesterday called to refresh DOE’s triennial grid congestion assessment.

While the meeting chaired by David Meyer, senior adviser at DOE’s Office of Electricity, sought guidance from the industry representatives, they wanted more answers from DOE about how to face the future.

The growing threats of cyber and physical attacks and catastrophic weather raises a hard question, said Kenneth Seiler, executive director for system planning at the PJM Interconnection, the nation’s largest regional transmission organization.

“It adds up to … how much risk are we willing to take in terms of putting our customers in jeopardy if we lose the transmission system. … And what is the risk that you are willing to pay for, because somebody has to pay for this at the end of the day.”

“A lot of people are looking for certainty” in policy, in generation and in transmission, Seiler said. “A lot of people are looking for stability” and clarity on where DOE is headed, he said.

Members of one panel were asked by an audience member what an effective national transmission policy would look like. “I have no idea. I’ve never seen it,” quipped Ed Tatum, vice president for transmission at American Municipal Power.

A study by DOE’s National Renewable Energy Laboratory mentioned yesterday — not yet released or offered support by DOE leadership — proposes just such an overarching transmission plan. The NREL’s “Interconnections Seam Study” analyzed connecting the three separate synchronized North American grids into a single network that could produce significantly cheaper and cleaner electricity.

In one NREL scenario, an overlay of high-voltage direct-current (HVDC) lines would be built across much of the U.S., allowing surplus solar power from the southwestern U.S. to meet peak afternoon loads in the Midwest and Great Plains wind power to reach the West Coast. NREL said the $14 billion cost of the most ambitious scenario would be recovered in 15 years, while reducing power plant carbon emissions significantly (Energywire, July 27).

Such a high-voltage backbone system could also be critical in restoring power after a devastating cyberattack or natural disaster, advocates say.

“Are we … missing the opportunities for rational, regional, holistic buildouts?” Tatum said. “That’s a concern.”

“There’s going to be a lot of debate about doing something like that,” said Rob Gramlich, president of Grid Strategies LLC. DOE could play a crucial role in taking the issue to the public, he added.

What role does Congress play?

Energy Secretary Rick Perry’s policy team has drafted a grid security plan that would subsidize money-losing coal and nuclear plants to keep them from closing, without investigating transmission’s part, according to a leaked draft. And a separate DOE planning effort to assess strategic interdependences among grid, gas and communications infrastructure has months to go.

Congress’ absence in the discussion was underscored by the conference itself. The triennial review of powerline congestion was ordered by lawmakers in 2005, in response to the massive 2003 Northeast blackout. It was meant to guide DOE in defining national corridors for new transmission projects where federal regulators could impose decisions on new powerline routes if state authorities failed to act. The corridor approach is now a dead letter at DOE.

When the 2005 Energy Policy Act was passed, Congress and grid experts were seeking a way to jump-start construction of new transmission lines after a long investment slump. But in the decade that followed, the surge in renewable energy projects and a shift from coal to gas generation triggered a burst of new lines. Aging power lines demanded replacement. And overall growth in electricity demand fell below what planners had predicted in 2005, further shrinking demand for power lines.

Congress hasn’t returned to a comprehensive transmission policy review since the 2005 act.

Waiting on Order 1000

High on the panelists’ concerns was what they called the undelivered promise of the Federal Energy Regulatory Commission’s Order 1000 on commission transmission policy, issued in 2011. Several speakers yesterday said the order’s mandate to increase competition in new power line projects is far from realization. The order also directed grid operators to begin interregional planning of transmission projects. “Order 1000 mentioned it, but didn’t get the job done,” Gramlich said.

Sharon Segner, vice president of LS Power Development, an independent generation and transmission developer and operator, cited a Brattle Group study released last month that found 2 percent of transmission projects in grid market regions were opened to competitive bidding. The others were carried out by transmission owners in their service areas with limited or no review, Brattle said.

Traci Bone, an attorney with the California Public Utilities Commission, told the conference yesterday such projects go directly into rates charged to customers. “They receive no review at any stage,” Bone said.

A half dozen states have passed laws giving states a veto of regional transmission projects, initiatives that now face a court challenge.

In Bone’s state, the three major utilities will spend an estimated $4.9 billion on transmission projects by 2022, half self-approved, she said. FERC dismissed a complaint against the utilities on this issue in August.

Steve Naumann, vice president for transmission at Exelon Corp., cautioned that top-level policy planners face a power system that is undergoing constant change, driven by economic and technology pressures as well as policy. Planners considering the structure of the electric grid 10 years ago could not have guessed the impact that horizontal fracking of natural gas would have on power generation, he said.

Then there’s politics. “Carbon yes, carbon no,” Naumann said. “Elections matter. We just have to deal with that.”

“We’ll never have certainty when we [look at] long-lived assets like transmission,” said Alan Myers, director of regional planning for ITC Holdings. The industry “needs to plan around scenarios that are reasonable” and not let policy uncertainty “lock us into inaction. That is what we can’t do.”