Even as windmills and solar panels make headlines, the big energy issue in Washington is electric transmission. Whether it’s Congress’ newfound interest in enabling reform, the U.S. Department of Energy’s new Grid Deployment Office, or the Federal Energy Regulatory Commission’s (FERC) upcoming final rule on transmission planning and cost allocation , on how to build and pay for long-range transmission to connect generators to customers is seen as the latest step in the effort to meet net-zero emissions goals.
Like so many other issues in Washington, the need for more transmission lines is accepted without question and the costs are not considered. But for American consumers, especially low-income and elderly ones, as well as small businesses and energy-intensive manufacturers, building new transmission lines could lead to much higher monthly bills and leave them at the mercy of stranded assets.
Traditionally, high-voltage transmission lines, consisting of 150-foot-tall lattice towers crisscrossing the landscape for hundreds of miles, were designed by local utilities to meet the energy needs of their customers and subject to approval by state commissions. public services. But public policy goals to promote renewable energy are changing how the grid is developed.
In recent years, states have established renewable energy mandates; Congress has approved more than $1 trillion in taxpayer subsidies for renewable energy; and President Biden issued an executive order setting net-zero emissions goals for electricity generation by 2035. To meet these policies, the grid needs new high-voltage transmission lines — lots of them — and they will be expensive.
According to the “Net-Zero America” analysis published by Princeton researchers, reaching net zero goals with 100% wind and solar energy by 2050 will require an additional $3.5 trillion in capital spending on new lines of transmission. If net-zero goals were pursued with a mix of renewables, nuclear, and natural gas production (which could include carbon capture), a significant portion of these investments in transmission would not be necessary. Additionally, a balanced mix of dispatchable and renewable resources would improve grid reliability without overburdening renewables or transmission.
Contributing to the cost is the fact that renewable projects are often built far from where the electricity will be consumed. For example, the Midwest is a great place to build windmills, but long-distance transmission lines are needed to provide electricity to large population centers on the coasts. Not only are these lines capital-intensive, but they also require the purchase or condemnation of private property to build them. Adding insult to injury, many of these transmission lines will not serve the people whose land they use.
Renewable energy developers see the potential to sell their electricity into higher-priced energy systems near urban centers, while at the same time being able to reap generous subsidies from ratepayers. But having to pay for transmission cuts into profits. Property owners affected by the transmission lines also object. The solution: a wave of lobbyists and special interests pushing politicians to eliminate permitting barriers and socialize the $3.5 trillion cost of building new transmission lines for more Americans.
In response, FERC is engaged in rulemaking to change transmission planning and cost allocation. Among the proposals are to require grid planners to consider factors such as “geographic zones,” such as wind potential in the Midwest; state and federal “public policy goals”; and technological “trends”. If adopted, these factors would provide more subjective ways to justify building large, expensive, long-range transmission projects that would be paid for by larger numbers of Americans.
With public concerns about costs, transmission advocates now argue that more transmission is needed for grid reliability. However, the threat of blackouts is the result of the same net-zero policies that now require increased transmission. For example, Maryland’s recent decision to close the Brandon Shores coal plant will result in customers in 12 states and the District of Columbia paying $796 million for new transmission projects to support reliability.
Customers may also have to pay for transmission projects that are no longer needed. New technologies, such as small modular nuclear reactors that can be built at existing power plants that already have access to transmission, could negate the need for new transmission lines to serve renewable generators. The current push for broadcast reform could be another costly example of Washington trying to fix yesterday’s problem. This is not mere speculation, since 2008 customers have paid $250 million for the PATH transmission line spanning three states, even though it was never built and never served customers.
It’s time for politicians to reaffirm that the electric grid exists to serve customers, not developers and investors. Transmission planning and cost allocation should be driven by customer needs and overseen by state regulators who are best suited to protect their citizens. At a time when inflation is making it harder for families and businesses to prosper, imposing additional costs to create broadcasts for special interests makes little sense.
Bernard L. McNamee served as commissioner of the Federal Energy Regulatory Commission from 2018 to 2020.