Senate leader introduces national clean energy transmission system bill
March 5, 2009 - Kate Rowland - Energy Central
The opening notes of a clean, green electric transmission symphony were heard Thursday in Congress as Senate Majority Leader Harry Reid introduced proposed legislation that will require the President to designate renewable energy zones in areas with significant clean energy generating potential.
Dubbed the Clean Renewable Energy and Economic Development Act of 2009, the bill is loosely based on Reid’s legislation of the same name from the last Congress. However, the new, broader bill he introduced today also draws heavily on the input from stakeholders including the Center for American Progress and the Energy Future Coalition, as well as a wide range of government, business, labor, and non-profit leaders who participated in the National Clean Energy Summit at the end of February.
The bill covers a number of issues designed to expedite electric transmission planning, including the directive to for the President to designate renewable energy zones (defined as areas that can generate in excess of one gigawatt of electricity from renewable energy, including rural areas of Federal land, and have insufficient transmission capacity to achieve their renewable energy generation potential). It excludes environmentally sensitive and culturally significant areas from these zones, and also allows the President to use zones already designated (WREZ) in the Western U.S. As well, it sets deadlines on designating these zones for the Western Interconnection for 90 days after the enactment of the bill, and 270 days for the Eastern Interconnection.
Reid’s bill, according to the filed summary, also requires “participatory and transparent transmission planning on an interconnection-wide basis for green transmission projects to integrate renewable electricity resources from renewable energy zones into the transmission grid.” It requires a planning process based on established and projected federal and state renewable energy policies and targets, and one that solicits input from all stakeholders. Further, it requires the plan to “consider alternatives to new transmission, including energy efficiency, demand response, distributed generation, and cost-effective energy storage.”
In order to expedite the building of needed transmission, these interconnection-wide green transmission plans must be submitted to FERC within one year of the deadline for designation of renewable energy zones. If these deadlines are missed, or a regional planning authority does not organize a planning process, the bill gives FERC backstop planning authority to “establish a planning process and conduct planning, in consultation with DOE, federal power marketing authorities, the electric reliability organization and regional reliability organizations.” FERC is also given the same authority for any state that doesn’t participate in an interconnection-wide planning process. As well, the bill establishes a surcharge on all transmission customers to cover the costs of regional planning authorities and states participating in interconnection-wide planning.
Transmission line siting, currently conducted state by state, would be changed by virtue of this bill to allow transmission project developers to apply to FERC for federal backstop siting for green transmission projects that are part of the green transmission grid plan, or for projects that FERC determines are needed to integrate renewable generation resources, according to the bill summary.
“For states that participate in interconnection-wide planning, this bill requires FERC to consider state recommendations in siting the line, and to work with states to resolve differences,” the summary on record states. “This bill gives FERC the authority to issue a construction permit, including the right of eminent domain, for green transmission projects that meet specific conditions, including a minimum renewable requirement, optimizing transmission capacity, and providing transmission access to states the project passes through.”
Transmission using federal siting authority would be required to ensure that at least 75 percent of the capacity of the transmission project is available to renewable generation or, alternatively, the maximum possible amount of renewable generation that can be reliably connected. Further, in order to ensure transmission access for renewable generation sources, federally sited transmission projects “must give priority to load-serving entities contracting with renewable generators, or to renewable generation developers, when offering firm transmission rights.” Another condition of federal siting noted in the bill for transmission project developers is the demonstration of sufficient capacity to connect multiple renewable generation resources in the REZ (renewable energy zone) to which it connects, allowing future renewable generators to connect to the transmission system without the necessity of building multiple transmission lines through the area.
There is one requirement in this bill that will be sure to irk those wanting to see a provision for electricity “on ramps” and “off ramps” on long-distance transmission lines passing through their states. Reid’s bill summary states: “Large transmission lines may pass through states without providing any benefit to the state.” However, with regard to federally sited transmission lines, it does make provision for this: “This bill requires green transmission projects that use federal siting authority to provide transmission access to load or generation in each state they pass through.” If the project can’t provide interconnection to a state, it says, “that state will be eligible for additional funds through DOE grants.”
American Recovery and Reinvestment Act (ARRA) grant funding is specified, as well. The bill’s summary notes the bill would authorize the DOE, in consultation with FERC, to make grants to states and planning entities to implement this planning and siting for “transmission improvements including smart grid investments, for training for state public utility commission staff, for mitigation of landowner concerns, for habitat and wildlife conservation, for security upgrades to the transmission system, for energy storage, for reliability projects, transmission business development, and for distributed generation projects.”
One further grant stipulation: “These grants are available only to states that participate in green transmission grid planning and implement green transmission grid projects in a timely fashion.”
Cost allocation for the green transmission plans is specified, as well as the ability for federal transmitting utilities to construct projects if no privately funded entity commits to financing projects within three years.
Solar projects would see a pilot program established on federal land for commercial utility-scale solar electric energy systems “on lands identified by the Secretary of Interior and the Secretary of Energy,” a program hinted at by Interior Secretary Ken Salazar a few weeks ago.
Finally, Reid’s bill extends infrastructure investment incentives from the Energy Policy Act of 2005 to include transmission projects integrating renewable energy resources into the transmission system, with the limit on third-party financing of transmission investments in the Western Area and Southwestern Area Power Administration territories being raised to $2.5 million.
“This bill is not perfect and has ample room for improvement,” Reid acknowledged in his remarks as he presented his proposal to Senate. “But as the bill works its way through the legislative process, I am hopeful that people will come together in good faith and propose revisions that will help solve the problems that we tried to develop at the (National Clean Energy) Summit.
“There has already been a great deal of non-partisan, thoughtful work that Congress can draw upon in legislating and I look forward to the hearing that Chairman Bingaman has scheduled on this topic for next week.”
The melodic intricacies of this symphony will likely see major changes before its premier performance, but for a broad swath of stakeholders, it’s a promising first step.