Week Ending April 30, 2021

From White House and FERC Session: Grid Investments Key for Clean Energy Gains, Job Growth

This Article Appears as Published in Foster Report No 3347
From White House and FERC Session: Grid Investments Key for Clean Energy Gains, Job Growth

During a FERC technical conference on the power grid of the future, commissioners and others addressed changes large and small that state and federal regulators are grappling with to ensure decarbonization plans and increased use of the grid do not add risks for reliability, cybersecurity, affordability and environmental justice.

FERC should strive for clear and consistent signals to the investment community, and not lose focus on reliability and cybersecurity concerns as rules from the federal and state level bring changes in how the grid is used, said Commissioner Neil Chatterjee.

Chairman Richard Glick and others gave views and discussed regulatory strategies for making the current grid more efficient, while plans for electric vehicles, increased use of electricity to reach climate goals and the interplay between retail and wholesale markets presents challenges.

The April 29 technical conference on electrification and grid-enhancing technologies was just one of the events recently to highlight transmission grid investments, which in years past were items only energy geeks cared about. Evidence that the subject has become mainstream and reached a larger audience could be seen in announcements from the White House, federal agencies and President Joe Biden’s April 28 speech to a joint session of Congress. During that speech, Biden said his infrastructure plan would create jobs to install “thousands of miles of transmission line” to build a cleaner and more resilient power grid. “We can do that,” Biden said to applause from lawmakers.

In an April 27 fact sheet, the White House underscored a commitment to modernize power grid infrastructure and highlighted a report showing that with financing and siting tools outlined in the Biden administration’s American Jobs Plan, 22 transmission projects could move from planning into construction. That report, from Americans for a Clean Energy Grid (ACEG), concludes that the transmission projects would add hundreds of thousands of jobs around grid enhancements and clean energy additions to move renewable resources across different regions of the country.

The White House said that the Department of Energy is planning to announce new financial tools to enable more high-voltage transmission development, and the Department of Transportation is issuing guidance about the use of roadways and existing rights-of-way to facilitate transmission line siting.

The Biden administration also said a group of companies, state officials and grid expansion advocates formed a Grid Investments Advisory Council, with a focus on smart grid technologies to improve resilience. The council is chaired by Gil Quiniones, president and CEO of the New York Power Authority, and it includes “leaders from the private and public sectors, drawn from all parts of the country and representing the electric utility industry, environmental groups, vendors, labor unions and other key stakeholders,” according to the White House.

At the all-day FERC technical conference, Glick began the morning session noting the transformation taking place in the energy sector, with much of that involving increased electrification as a way to achieve emission reductions. He credited former Chairman Norman Bay with the idea for holding the session, which examined distributed energy resources, storage technologies, state and federal rules and FERC responsibilities under the Federal Power Act.

Glick and others sought input from state and local officials on a range of issues around electrification and the grid of the future, and Glick noted that he is aiming to examine transmission enhancements, while also using existing facilities more efficiently. He delivered a similar message in an April 27 speech to the WIRES Group. During those remarks, Glick noted that Biden is focusing on transmission grid changes for job growth and economic development, and FERC should improve incentives for transmission investment.

As he has in other forums, Glick told the WIRES Group meeting that the transmission planning process needs to be improved, and he is reaching out to state regulators to improve coordination where authority under the FPA is split between FERC and states. That outreach with the National Association of Regulatory Utility Commissioners for more formal coordination was mentioned by Glick during FERC’s April 15 open meeting.

State regulators and a wide range of speakers addressed questions from commissioners and staff at the April 29 technical conference. Commissioner Allison Clements noted that the discussion covered a host of issues that sometimes fall between the jurisdictional divide of the Commission and states.

Among the morning speakers at the session was Glenn Blackmon, manager of the energy policy office at the Department of Commerce in Washington state. Washington has aggressive goals to reduce emissions, with a 100% clean energy standard and other steps for a cleaner energy future, which is expected to essentially double electricity demand in the state. While the Northwest has plenty of hydropower resources that give the region a head start for a cleaner grid, transmission enhancements will be needed, Blackmon said, adding that he is pleased to see Biden acknowledge as much through federal initiatives.

Some risks associated with increased electrification are stranded costs for fossil fuel investments, gas distribution facilities and equity considerations around environmental justice, Blackmon said. Access to capital is limited in rural areas, he and others noted. Policymakers need to listen to disadvantaged communities instead of preaching to them and not leave people behind in their zeal for grid and energy transformations, Blackmon said.

Communities where fossil fuels have a heavy presence are often not able to make a clean energy transition without assistance, and lessons from the United Kingdom and Spain could be incorporated in the U.S., suggested Katherine Hamilton, executive director of the Advanced Energy Management Alliance and co-chair of the World Economic Forum Global Future Council on Clean Electrification.

Others made similar points about equity issues for disadvantaged communities. Enhanced energy efficiency and demand response programs are often a first step, but policies need to meet people where they are and address their needs to be successful, said Adrienne Mouton-Henderson, deputy director of the Renewable Energy Buyers Alliance.

Consumers who do not have technical experience and have difficulty paying utility bills should not be the last to benefit from a clean energy transition, added Matthew Tisdale, executive director of Gridworks. Broad policy goals in a “scattershot” approach can help with consumer adoption among many segments of the economy, but accommodations and targeted electrification plans are needed to bring disadvantaged communities into the fold at the same time, Tisdale said.

The increased use of digital technologies on the power grid and at consumer facilities presents cybersecurity concerns, and regulators need to understand and stay on top of the risks presented by smart grid technologies, several speakers said during the technical conference.

By Tom Tiernan ttiernan@fosterreport.com

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