The complications of transmission competition

Source: BY MATTHEW CHOI, Politico • Posted: Monday, May 16, 2022

The U.S. transmission system will need to expand 60 percent by the end of the decade to meet President Joe Biden’s goal of a net-zero-emission grid by 2035, experts say. Faced with the challenge, FERC is reversing parts of a 2011 policy meant to increase competition in transmission construction — a measure that its critics say actually slowed down the build out of new, long distance lines by putting onerous new competitive requirements on bigger projects, POLITICO’s Catherine Morehouse reports.

“What I think [the 2011] Order 1000 did, not intentionally, was created … a perverse incentive for utilities that don’t want to go through such a competitive process” to build “less significant projects in many cases,” FERC Chair Richard Glick said at an Advanced Energy Economy webinar this month.

Investments in regional transmission lines actually fell by billions of dollars in the last decade, resulting in a sharp decline in the construction of new high-voltage transmission from an average of 1,784 miles in 2010 to 2015 to an average of 645 miles from 2016 to 2020, according to data from Grid Strategies.

FERC unveiled a plan to overhaul transmission permitting last month, which included a provision that would return to utilities the power to take control over transmission planning if they partner with another developer.

But defenders of a competitive process say the problem with Order 1000 was that it didn’t go far enough: By exempting utilities from competitive requirements for smaller scale projects, it simply diverted their priorities away from long-distance transmission.