Update the Electricity Grid Without Undermining Environmental Protections

June 26, 2023 | 11:46 am
Sam Gomberg
Senior Analyst

There’s no question that the US electricity transmission system has to be modernized to enable a transition to an equitable clean energy economy, but how to do it is up for grabs. Although both sides of the aisle in Congress are now interested in legislation to reform the grid permitting process, their definitions of permitting “reform” vary widely, and some of those definitions would entail unacceptable tradeoffs.

Some members of Congress are mainly interested in speeding up permitting to undermine bedrock environmental protections and boost fossil fuel development, the exact opposite of what we need. What we need is more investment in the electricity transmission system to improve reliability, better integrate renewables, and strengthen resilience to extreme weather events. Much of that can and should be done with existing authority and a renewed focus on effective regulatory oversight at the Federal Energy Regulatory Commission (FERC). Negotiating away environmental and public health safeguards for new legislation shouldn’t be on the table.

There’s a lot already happening

There’s no magic solution to make new transmission investments happen overnight. Even in the best scenarios, including under the various transmission permitting reform bills under consideration, it would take several years to design, permit and build new projects. Yes, transmission system investments are decades behind in keeping up with the transition to newer, cleaner and cheaper energy technologies. That said, there’s a lot already underway. We’ve made a lot of progress in the last eighteen months, and we should build on that.  

Below is a list of transmission-related provisions in the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) as well as ongoing FERC and Department of Energy (DOE) initiatives designed to advance and accelerate investments in the transmission system. The list is not exhaustive, but it illustrates the significant attention that the electric transmission system is already receiving at the federal level.

Inflation Reduction Act (IRA)

  • $2 billion in direct loans for transmission projects the DOE has designated as in the national interest that meet certain criteria, including promoting energy security and enabling the use of clean energy resources; and
  • $760 million in grants for studies, stakeholder engagement, and other activities to responsibly site onshore and offshore transmission lines.

Infrastructure Investment and Jobs Act (IIJA)

  • $2.5 billion for a revolving loan program to provide financial stability and lower-cost financing for proposed transmission projects;
  • $5 billion in competitive grants for grid resilience projects;
  • $3 billion in grants for advanced transmission technologies to increase the efficiency and flexibility of the existing grid;
  • $5 billion for grants to non-federal entities (state and local governments, state public utility commissions, and Native American nations) to collaborate with utilities and grid operators on innovative approaches to harden and enhance system resilience and reliability; and
  • Reforms that strengthen FERC’s authority to permit interstate transmission lines under specific circumstances.

DOE and FERC are now incorporating these grants and loans with new rules and procedures. To that end, DOE has recently:

  • Finalized a memorandum of understanding (MOU) with the Department of Transportation to establish a joint office to serve as a single point of accountability for, among other things, studying, planning and funding transmission projects in the interstate highway system’s right of way;
  • Finalized an MOU with several federal agencies to expedite the siting, permitting and construction of electric transmission infrastructure, improve coordination among various agencies and entities involved in the siting process, set clear timelines for federal reviews and authorizations, enhance the capacity to perform effective reviews, and enable collaboration to provide technical assistance and resources to states and tribes to participate;
  • Issued a notice of intent and request for information to inform the designation of national interest electric transmission corridors, a key first step toward implementing IRA and IIJA funding provisions; and
  • Established the Building a Better Grid Initiative to implement the IIJA and IRA, and to accelerate the nationwide development of new, upgraded electric transmission lines and, among other things, support the buildout of long-distance, high-voltage transmission facilities and distribution systems that are critical to reaching the Biden administration’s goal of 100-percent clean electricity by 2035 and a zero-emissions economy by 2050.

FERC, which has regulatory authority over many aspects of transmission system planning and operation, also has several initiatives underway to accelerate investments and new clean energy resource integration. They include:

  • A proposed regional transmission planning and cost allocation rule that, as proposed, would require robust, forward-looking transmission planning and would better align cost allocations with recognized transmission investment beneficiaries;
  • A proposed interconnection process rule to address significant backlogs of new energy projects waiting to connect to the transmission system and provide greater certainty and lower the cost of new resources to connect;
  • A proposed backstop siting and permitting rule in response to IIJA provisions that would update FERC regulations governing the siting and permitting of interstate electric transmission lines located in DOE-designated national interest electric transmission corridors; and 
  • A public inquiry (often the first step toward new rules) into whether and how FERC could establish a minimum requirement for transmission capabilities to connect regional grid systems.

To be sure, the funding levels aren’t adequate, FERC rulemakings haven’t advanced as quickly as they should, we should have been doing all of this a decade ago, and Congress can do more. That’s why the Union of Concerned Scientists (UCS) supports the recommendations of Building Transmission to Secure a Clean and Equitable Electricity Grid, a study published on June 22 by a coalition of environmental and environmental justice organizations. Most of their recommendations call for administrative or regulatory actions that could be initiated under existing legal authorities—in other words, without new legislation.

In any case, federal agencies should focus on implementing the programs, initiatives and rulemakings cited above to get steel in the ground as quickly as possible. If it’s possible for Congress to pass stand-alone legislation that supports what’s already underway, great. But environmental champions in Congress should not negotiate away the fundamental environmental and community protections in the National Environmental Policy Act (NEPA) and the Clean Water Act in exchange for incremental progress or a false promise of a wave of transmission development in follow-on legislation.

Most transmission bills are not game changers

Don’t get me wrong: Some of legislative proposals currently in play are good proposals that UCS would support. But many of them direct FERC to do things that it already has the authority to do under the Federal Power Act.

There can be value in Congress directing FERC to act, especially within a certain time frame. It forces action, provides direction, and clarifies the legal authority to act that can minimize legal challenges and delays. But that would not be a game changer, particularly without a strong, committed FERC to implement a congressional directive. Think back to the Trump administration’s Environmental Protection Agency, which was forced by law to regulate carbon emissions. That didn’t go so well, and neither would an unmotivated or understaffed FERC forced to impose rules or requirements it doesn’t buy into.

Considering what is already underway and what can be accomplished without additional legislation, Congress should let the idea of negotiating away environmental and public health protections die a quick death.

What we really need is a strong FERC

What would be a game changer? A strong, well-staffed FERC with a full suite of commissioners (there is one seat now vacant with another opening up this summer) who understand the challenges facing the industry and the urgency of getting on with the clean energy transition, and who are committed to using FERC’s existing authority to address those challenges. Right now we don’t have that, and the FERC initiatives cited above are not moving fast enough because of it. Seating new commissioners doesn’t take new legislation, but it does require the Biden administration and the Senate to find a way to confirm qualified commissioners who share UCS’s ambitions.

Building out and modernizing the nation’s transmission system has been characterized as something clean energy proponents need to get out of the ongoing permitting reform negotiations on Capitol Hill, and to get there we need to make significant concessions. That’s a false choice. The one thing that can’t happen is piecemeal progress as a consolation prize in exchange for weakened environmental reviews, fewer protections for impacted communities, and more fossil fuel extraction. With a strong FERC and federal agencies implementing the laws already on the books, we can get on with building an equitable and just clean energy future with all due haste.