2. ELECTRICITY: Senators cautious about 'vague' definitions in transmission siting draft (E&E Daily, 05/01/2009)

Katherine Ling, E&E reporter

Members of the Senate Energy and Natural Resources Committee expressed concern yesterday about several vague and broad definitions of federal transmission siting authority included in a draft bill from Chairman Jeff Bingaman (D-N.M.).

The concerns were aired during a "walk through" hearing for members to ask questions about the new draft that would give the Federal Energy Regulatory Commission authority to site high priority transmission lines planned by interconnection-wide entities to maximize transmission for certain policy goals including renewable energy, congestion reductions, emission reductions and fuel supply diversification.

In the draft bill, FERC would only be able to site a transmission project after a state failed to act on it within one year, rejected it or placed unreasonable conditions on it (E&E Daily, April 29).

Chairman Jeff Bingaman (D-N.M.) said he plans to markup the bill Wednesday, May 6, but that he was willing to take suggestions and work with members on adding or changing language before then.

At the top of the list of concerns for several members was how FERC would determine the cost allocation to finance the construction of high priority transmission lines. The current language says FERC would pass a rule that would create a standard methodology for cost allocation, "except that costs shall not be allocated to a region, or subregion, that are substantially disproportionate to reasonably anticipated benefits."

"How do we define substantially disproportionate to the benefits?" asked Sen. Jeanne Shaheen (D-N.H.), as did several other members.

Leon Lowery, a Democratic committee aide that specializes in electricity, said cost allocation can be pretty fact-specific and the law leaves a certain amount of judgment up to FERC. "It is vague but it is far more specific than anything that has been in the law before," Lowery said.

Despite its precedence, it did not appear to be detailed enough for the members, who also worried about laying out a stronger purpose for the construction of the national grid, defining who the beneficiaries could include and what the bill means by saying FERC should "take any necessary action" to address obstacles to the construction of high-priority national transmission projects if they are not built in a timely fashion.

"I would prefer, rather than be vague ... we should come up with specifics," said Sen. Byron Dorgan (D-N.D.), who has introduced his own transmission siting legislation (E&ENews PM, April 1).

"Without specifics we will once again fail" to site and construct the necessary transmission lines, Dorgan said. He held up the example of the 2005 Energy Policy Act provision that attempted to fix the transmission construction impasse by creating the "national interstate electricity transmission corridors" and backup FERC authority, which has yet to result in the construction of any power lines.

Dorgan also noted the new draft plan would make FERC start the environmental assessment review over again if a state decides to reject a transmission project, which could prolong the process and defeat the purpose of the bill. He said instead the states should be heavily involved in the planning process but not have first crack at the siting process.

Lowery said he would examine how that could work.

Inslee submits plan

On the House side, Rep. Jay Inslee (D-Wash.) yesterday introduced a bill that would grant FERC authority to site interstate electric power lines.

Like the Senate draft, Inslee's bill would give FERC siting authority over a national transmission grid, but it would prohibit any generation that has emissions greater than a single-cycle natural gas-fired combustion turbine from directly connecting to the line. Senate Majority Leader Harry Reid (D-Nev.) included a similar provision in transmission siting legislation he introduced in March.

Inslee's bill would also allow transmission projects to apply directly to FERC for siting certification -- with consultation from the states -- if the project qualifies under a national transmission plan created by a broad stakeholder entities in the eastern and western interconnection. The bill would have FERC create one or more of these "multi-state" transmission planning entities, instead of allowing FERC the choice to create one or just utilize existing entities as the committee draft bill has.

The multi-state planning entities would be in charge of submitting for FERC approval a single cost allocation methodology for national transmission projects under the bill.

The bill would also direct FERC to conduct an analysis of the benefits of smart grid technology for transmission that is "in the public interest" and to recommend metrics for grid performance.

Click here to view Inslee's bill.

Click here to view the Senate draft.

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