Obama’s second term looks positive for transmission

Carl Dombek | Dec 06, 2012


It will largely be “business as usual” under President Barack Obama’s second term, at least as far as electricity transmission is concerned, according to two Washington insiders speaking at TransmissionHub’s TransForum East in Arlington, Va., Dec. 5.

“I think that overall, the president’s reelection has been a positive development for transmission policy generally,” Frank Maisano, strategic communications professional with Bracewell & Guiliani, told the conference.

“Transmission is an interesting issue as it doesn’t have a lot of partisan issues to it,” he said. “You either like it or you don’t, depending on where you live and where the transmission line is going. What it really does, though, is creates an opportunity for renewable energy probably more than [for] anybody else.”

The renewable industry is poised for success, he said, but it needs transmission opportunities to make that success possible.

“Robust transmission policy really impacts all electricity generation and, frankly, benefits all consumers in all regions,” he said, while noting that the president will also need to focus on other sources of generation to live up to his campaign theme of “all of the above” sources of energy.

“Now, we’re at a point when we have to get beyond the rhetoric and start making it happen,” he said.

The question of national interest electric transmission corridors (NIETCs) will be the first issue to get attention during the new administration, Maisano predicted, noting that the first attempt to designate NIETCs as approved under the Energy Policy Act of 2005 (EPAct05) was struck down in both the 4th and 9th U.S. Circuit Courts of Appeal.

“I think there’s going to be some legislative effort to see if it can revisit that because … you really do need some opportunities to try and improve” transmission siting, he said.

Sue Sheridan, a former Congressional staffer and current president of the Coalition for Fair Transmission Policy (CFTP), agreed that the siting issue is still alive. She predicted that it would come up in the House of Representatives, likely in the Subcommittee on Energy and Commerce, under the auspices of the Federal Power Act (FPA).

However, Sheridan parted philosophical company with Maisano over the potential socialization of costs for power lines within NIETCs, as well as the costs of power lines designed to bring renewable energy to market. She cited the FPA’s provision for “just and reasonable rates,” which her group believes means that “ratepayers should be asked to pay only for transmission lines and service from which they receive an identifiable benefit.” 

Focus on FERC

FERC will continue to be a focus going into the second term, Maisano said, as there are a number of things that still need to be worked out regarding FERC Order 1000.

“There are more opportunities there, especially for projects that are designed to bring renewables to the grid,” he said.

Sheridan agreed that the discussion about the order is far from over, but for a different reason, saying, “Our belief is that FERC has overreached its authority under the [Federal] Power Act.”

She said her group remains firmly opposed to FERC Order 1000 because it believes the measure’s “sweeping powers put FERC outside its boundaries, and that the ‘just and reasonable’ standard doesn’t allow for broad socialization or top-down planning” called for under the order.

Sheridan continued: “The [Federal] Power Act has never been about generation preference; it’s always been about rates, charges, and conditions of transmission service or the price at which electricity is sold.”

The FPA’s fuel neutrality, she said, “poses a real challenge for a chairman like [Jon] Wellinghoff, who arguably is not fuel-neutral and seems to think we really need to focus on renewables.”

She added that FERC has become “very astute” about finding ways to justify its chosen policy objectives under the broad “just and reasonable” standard of the FPA.

That could change in the months ahead, however, with a shift in the commission’s composition during Obama’s second term.

Wellinghoff’s term expires June 30, 2013, and Maisano said he has heard speculation that the chairman, who was appointed to the commission by then-President George W. Bush in 2006 and named chairman by Obama in 2009, might not be reappointed.

“A lot of people think he’s great for renewables, but not really great on a lot of the other FERC issues that people have had to deal with,” he said.

Wellinghoff’s focus, Sheridan added, has definitely influenced the commission’s tone. “When you have a strong renewables-oriented chairman like Wellinghoff, you can find the agency goes in one direction [while] at other times, it’s been more conservative.”

Sheridan emphasized that her coalition is not against renewable power, saying, “We’re just against subsidizing renewable power from distant locations to distant load centers because there’s the question that, if you subsidize it and spread the cost very broadly …  whether it’s the cheapest power that can reach the market and whether in fact you’re skewing power choices.”

After his term expires, Wellinghoff could continue to serve until the end of the Congressional session if a replacement is not appointed, a FERC spokesperson told TransmissionHub Dec. 5.

Carl Dombek, senior editor for TransmissionHub, a unit of Energy Central

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National Transmission Corridors & Renewable Energy

The national transmission corridors to bring wind energy from remote locations is another cost of renewable energy that does not seem to get added to the consideration of 'grid parity'.  These national transmission corridors will be used as a reason to include wind energy in the planning mix when, in fact, it is not a reliable source of electricity.  Without incorporating storage, the lines must be much larger than the average power they would carry.  Wind has a capacity factor of only about 32% making the average generation of a 300MW installation just under 100MW, but the transmission must be capable of the full 300MW.  Add up all the wind concentrated in certain regions and first thing one knows lines are being built to handle 12,000MW that will only carry on average 4,000MW.  On top of that, these lines will be crossing remote spreads of land subject to wildfires and ice storms.  Arguably, the national transmission corridors will decrease the reliability of the electrical grid by exposing it to additional hazard sources as well as messing with electrical markets making the construction of back up power sources unattractive from a business standpoint due to the PTC and cash grant programs which subsidize wind and remote solar.  The result is we are becoming more and more dependent on renewables which are not reliable, further decreasing the reliability of the power system.  In turn, the unattractiveness of building newer, more efficient, cleaner burning power plants needed to backup renewables means we keep in service facilities which should have, and would have, been retired thereby continuing to pump unnecessary quantities of toxic emissions and CO2 into the atmosphere while we continue to use huge quantities of concrete, steel, copper, and rare earth materials on electrical generation resources that are of dubious value.