The U.S. high-voltage electric transmission network needs a boost. Stakeholders eager to expand transmission face many obstacles, including planning, siting, permitting, and supply chain challenges. Several provisions of the Clean Electricity and Transmission Acceleration Act (“CETA”) of 2023 would help address these critical issues and unlock more grid capacity, thereby saving consumers and businesses money while enhancing electric reliability.
For example, Niskanen believes three sections of Title I of CETA (106, 107, and 108), focused on the “improvement of national electricity transmission capacity,” are vital to the development of high voltage lines.
Section 106 focuses on improved interregional transfer capability, an absolute necessity to strengthen the grid and meet growing energy demands. Without such a requirement, individual states and regional transmission organizations will continue with their “go-it-alone” approach with limited cooperation, leaving Americans vulnerable and overcharged at the plug. The provisions in section 106 would spur interregional transmission construction by directing the Federal Energy Regulatory Commission (FERC) to implement a minimum transfer requirement of 30% of peak electricity demand between regions (or 15% for regions that only have a single neighbor). Based on previous Niskanen research, only 2 of the 11 regions meet these requirements. The increase in transfer capability would provide many benefits, including increased reliability, lower congestion costs, and broader access to diverse energy sources.
CETA section 107 gives FERC the authority to site and permit transmission lines of national importance. The bill defines these lines as crossing two or more States, having a capacity of at least 1000 megawatts (MW), and yielding benefits such as congestion relief and improved reliability and resilience. This expanded authority at the Federal level is critical to addressing the ongoing transmission planning and state coordination issues that have plagued the siting/permitting process for large lines. In the current framework, individual state commissions can effectively “veto” entire interstate transmission lines by denying or withholding permits for the portion of the line within their state. This may occur due to a limited consideration of the benefits and costs within their state rather than the full benefits and costs of the entire project. Or, delays or cancellations may be attributed to opposition from local interests that see these lines as economic competition or otherwise undesirable. To credit local utilities, they continue to have numerous vital roles in managing the grid. Unfortunately, on their own, they cannot move the vast amounts of power across regions needed to unlock America’s diverse energy resources. The language in section 107 provides a compromise by moving the permitting of nationally important lines to FERC and allowing local utilities to focus on their service footprint. Given the importance of these lines, this additional authority will be critical in developing a U.S. grid for the 21st century and beyond.
In addition to addressing siting and permitting issues between Federal and State jurisdictions, CETA addresses administrative inefficiencies between Federal agencies. Section 108 seeks to reduce or eliminate duplicative environmental review reports under the National Environmental Policy Act (NEPA) in the designation of, and subsequent construction within, National Interest Electric Transmission Corridors (NIETCs). These corridors enable transmission developers to access backstop siting authority when state siting processes have failed at FERC and specific DOE financing tools. Currently, the DOE must complete a NEPA review to designate a NIETC. FERC then requires an additional NEPA review to issue permits to build within the NIETC.*
As currently designed, this process could effectively create a “double NEPA” review process that would be time-consuming and costly for developers and federal agencies without much environmental analytical benefit. Since the process was created in the Energy Policy Act of 2005, not a single corridor has been successfully designated. To address this, CETA no longer requires DOE to prepare an environmental review document for a NIETC designation unless deemed necessary by the Secretary. If DOE does conduct a review for the designation, CETA further directs FERC to rely on the existing reports from the DOE review in its process for siting and permitting. This revised review process will ultimately reduce the duplication of efforts between FERC and DOE.
CETA Act section 210 advances infrastructure colocation by directing the Federal Highway Administration to report on best practices for siting transmission infrastructure in highway rights-of-way. Using existing rights-of-way is a promising path around some of the additional siting and permitting complexities in transmission development. For example, as noted by Next Gen Highways, colocating new electric transmissions with existing highways can reduce land acquisition needs. It may also help build local community support for hosting new infrastructure.
Several provisions in Title VI of CETA would support government and community capacity to engage in infrastructure permitting activities. This is important because effective, efficient permitting processes require dedicated agency permitting capabilities and early and ongoing public input to identify concerns with infrastructure projects and shape solutions. Section 613 authorizes federal grants to States, Tribes, and local agencies to perform permitting tasks, and grants to community organizations to facilitate local participation in permitting activities and decision-making. Section 615 creates a federal environmental data system and an online permitting portal to modernize the federal permitting process and aid interagency coordination. The University of Arizona’s investment in developing the NEPAccess Beta tool is an illustration of the recognized need for such permitting digitization efforts to improve access and utilization of environmental data and analyses. Section 617 establishes Community Engagement Officers at federal agencies that would enhance the government’s local engagement capacity and conflict resolution capabilities.
Successful transmission expansion also requires strong supply chains. Transformers are a critical power grid component, but U.S. transformer supply chains are vulnerable. While several short- and long-term actions are needed to secure U.S. transformer availability, Section 209 of CETA would put a down payment towards addressing shortages of this essential equipment by authorizing Defense Production Act funding for domestic manufacturing of transformers and the steel used to fabricate them.
The CETA provisions we’ve discussed here span electric transmission siting, permitting, planning, community engagement, and supply chain resilience. These areas pose significant challenges to the urgently needed buildout of high-voltage transmission lines in the U.S. We can reinvigorate grid expansion and regional connectivity with a holistic approach of statutory and regulatory reforms that address problems in each of these areas. A more robust transmission network, in turn, will reduce customer costs, improve power reliability, and enable continued progress toward decarbonization.
*The second NEPA review at FERC could theoretically be expedited if the DOE Environmental Impact Statement perfectly met FERC’s more granular requirements necessary for its permits.