Fixing the grid
March 22, 2007 Marc Gunther, Fortune
Everyone wants electricity, but no one wants new
power lines in their backyard, says Fortune's Marc
NEW YORK (Fortune) -- Here's an idea that won't spark
much controversy: To provide clean, reliable and affordable
energy, and to effectively fight global warming, America
needs to upgrade its electricity grid.
The GridWise Alliance, a coalition to promote a stronger
grid, counts among its members the nation's big utility
companies, as well as GE, IBM, the Tennessee Valley
Authority and the U.S. Department of Energy.
But just try to build a new high-capacity transmission
line - and you can't upgrade the grid without new
power lines - and you'll get not only controversy,
but protests, lawsuits, efforts to sidestep the regulatory
process and acts of Congress, if opponents get their
Some of the opposition comes from people who call
themselves environmentalists - even though new power
lines will enable development of renewable energy
sources, particularly wind power.
One case in point: The proposal by a company called
the New York Regional Interconnect, or NYRI, to build
a 200-mile transmission line from Utica to Middletown,
N.Y., to bring more electricity to New York City and
The developers say the power line is needed to improve
the grid's reliability in New York. They also say
it will enable cleaner power, with fewer greenhouse
"You can't have big wind projects and hydro projects
in New York City," says Bill May, the NYRI's project
manager. "Transmission is the resource that connects
rural areas where renewable energy can be generated
with urban areas where electricity is needed."
In truth, there's no guarantee that the electricity
moving from upstate to the city would come from renewables;
it could come from burning coal. But better transmission
makes it easier for wind and solar power sources to
compete against fossil fuels. Once wind turbines are
built, they can generate electricity at a lower cost
than fossil-fuel plants.
Special report: Going green
"In essence, the transmission network defines the
marketplace for buying and selling power: If it is
robust and flexible, so is the market for power. If
it is limited, congested and rigid, the market will
be equally rigid," says Michael Powers, the owner
of a small solar power firm and a board member of
Global Energy Network Institute, a non-profit research
group based in San Diego.
The NYRI planners say that about 80 percent of their
route runs on existing utility or railroad corridors.
They applied for a permit at the state's Public Service
Commission, whose job it is to analyze the options
and decide whether to grant a permit for the power
Then trouble arose. State legislators enacted a law
designed to block the power line by denying the developers
the ability to use the power of eminent domain to
buy property along the way. In February, a Democratic
congressman from upstate New York named Maurice Hinchey
introduced a bill of his own to prevent the Federal
Energy Regulatory Authority from stepping in if the
state denies NYRI its permit. The 2005 Energy Policy
Act grants authority to the federal government to
overrule states and localities - precisely because
of the difficult of getting new power lines built.
Hinchey declared: "No one wants massive towers or
power lines cutting through the Upper Delaware Scenic
River Valley or their backyard for that matter."
Ah yes, the backyard. This sure sounds like a classic
NIMBY (not in my backyard) problem. Everyone wants
electricity. Everyone's ready to blame the power company
when the lights go out. Everyone favors renewables.
Just so long as the 130-foot towers don't go anywhere
near anyone's house, or farm, or park, or school.
This isn't just a New York issue, of course. In northern
Virginia, a plan by Dominion Power to build a 240-mile
power line has run into a buzzsaw of opposition, including
a lawsuit by one of the region's most powerful developers,
whose family lives nearby. American Electric Power
has also met initial resistance as it seeks to develop
a major transmission line from West Virginia through
Maryland and Pennsylvania to New Jersey.
To be sure, these billion-dollar construction projects
may - or may not - have make sense as planned. Other
solutions to relieving grid congestion may be preferable,
including energy-efficiency programs, pricing strategies
to reduce demands during peak periods or more distributed
or localized generation, such as small-scale solar
and wind projects. The Bonneville Power Administration,
a federal agency that delivers electricity to much
of the Pacific Northwest, has found smart and lower-cost
ways to upgrade its grid that you can read about in
an article published by the Natural Resources Defense
But there's no question that some new power lines
are needed, and the role of state and federal agencies
is to decide where - balancing local objections against
the broader need for clean, reliable and low-cost
power. The NYRI, at the behest to state regulators,
is now looking at alternate routes.
"Why don't the legislators trust the regulatory
process?" asks Len Singer, general counsel to NYRI.
"It's up to us to prove our case. What are they afraid
It's a good question. The NYRI's opponents charge
the power lines will mean "unprecedented environmental,
economic and community damage," higher electricity
prices, hazards to public safety, and disruption of
children's camps, schools, playgrounds, historic properties
and archaeological sites.
They may well be right. But if they are, stopping
the power line should not take state laws targeted
at one company, let alone an act of Congress. Top