GRID:

Utilities and transmission managers try to head off congressional plans

Correction appended.

Major utilities and grid operators are planning an expansion of the Eastern interconnection grid to handle a huge increase in renewable power, seeking to head off congressional proposals for federal grid planning.

The initiative was launched April 8 at a private meeting at the Atlanta airport, attended by officials of the PJM Interconnection, Midwest ISO, ISO New England, New York ISO, the Southeastern Electric Reliability Council, Duke Energy, Entergy Corp., Florida Power & Light, Progress Energy, the Tennessee Valley Authority, Southern Co., Ontario's Independent Electricity System Operator, and other companies.

David Whiteley, a former senior executive with the North American Electric Reliability Corp. and Ameren Corp., has been brought in to head the initiative.

The energy companies and organizations -- which have never before met for such a purpose -- want to show Congress that a grassroots planning approach will be more effective than creating a new, top-down planning process under close federal control, Whiteley said in an interview.

"There are two philosophies. One is where one entity does it for everybody," he said. "The group agreed [instead] that interconnection-wide analysis was best handled by the regional plans already being developed, rolling them into one, and building an interconnection-wide analysis over that."

"It makes sense to have regional transmission organizations, transmission planners, owners and others work together and build on the current work being done in regional planning efforts," said Entergy spokesman Michael Burns.

The group will make an initial report in several months, Whiteley said.

Concerns about 2 grid-expansion bills

The participants in the Atlanta meeting came together after two transmission expansion plans were offered in the Senate, one by Senate Majority Leader Harry Reid (D-Nev.) and the other by Sen. Jeff Bingaman (D-N.M.), chairman of the Energy and Natural Resources Committee.

Both would create new transmission planning processes for the Eastern and Western interconnection grids, which are divided by the Rocky Mountains. Bingaman's bill, for example, would authorize the Federal Energy Regulatory Commission to designate a regional planning organization in each interconnection. Each new organization would prepare a plan for building new high-voltage lines to accommodate a twentyfold increase in wind, solar and other renewable power that is a key part of Democratic Party leaders' energy strategies.

Rep. Jay Inslee (D-Wash.) expects to introduce his version of a transmission bill Thursday. A draft of the bill would authorize the states in each interconnection to set up a new Multistate Transmission Authority. The costs of the new planning operations would be funded by a federal surcharge on electricity bills of up to $80 million annually.

The legislative proposals call for cooperative planning involving the grid managers and energy companies, but place final planning authority at the federal level. If transmission plans are not forthcoming on schedule, FERC would take over.

Bingaman will present a new version of the transmission bill to the Energy and Natural Resources Committee tomorrow. It is expected to respond to senators' concerns about federal grid planning authority, Senate aides said. "There is a major issue in letting states come up with solutions before any federal authority would take over, and not trampling over states' rights," said Robert Dillon, an aide to Sen. Lisa Murkowski (Alaska), the Senate Energy committee's ranking Republican. "We understand they've made some changes to address that."

Whiteley said the group members recognize that FERC will have to have final planning oversight. "There needs to be an ultimate decider at that level," he said. But the planning of grid operations on the state and regional levels is already hugely complex. Interconnection planning should be built from the bottom up, he added.

"If you don't get the regions right, you can't get the interconnection right," said Peter Fox-Penner, a principal of the Brattle Group, which has analyzed the integration of renewable power into the grid in several regions. "Realistically, even if you told a federal planning entity to do an interconnection plan, you'd have to break it up into regional computer runs and then harmonize them."

An initial analysis of linking new wind and solar power into the Eastern Interconnection was issued this year by the Joint Coordinated System Plan, whose members included PJM, the Tennessee Valley Authority and Midwest ISO. The study concluded that 15,000 miles of new high-voltage transmission lines would have to be added, at a cost of $80 billion, to supply 20 percent of the Eastern Interconnection's electricity needs with renewable power in 2024. But the plan's author said that its computer analysis was not detailed enough to establish that the resulting network could be run reliably and economically.

'The list of names is growing'

"We have really big questions we've never had before, in terms of integrating new resources and new technologies," Whiteley said.

Advocates of renewable electricity fear that its development will be thwarted unless a new transmission planning process is created that can overcome resistance from utilities that don't welcome competition from wind or solar power outside their territories.

Although FERC's legal authority over interstate transmission lines and wholesale electricity sales is undisputed, its earlier attempt to tighten federal rules on energy companies' transmission networks was blocked in Congress by allies of power suppliers in the Southeast and Northwest.

The groundswell of support for renewable energy has made transmission grid expansion a top priority, but the issue of federal control appears far from settled.

"It's a completely different story when you're talking about federal planning authority," said Kevin Kolevar, a principal with ClearView Energy Partners LLC and the former head of Energy Department's transmission office in the Bush administration. "There isn't a capacity here to undertake that now. FERC can't do that. The DOE can't do that." A new federal grid planning operation would take several years to get going, he said.

Whiteley said the group is not planning to lobby Congress on its position."We're not going to come to a conclusion over legislation. That's up to the individual companies," he said.

The group discussed whether to seek an Energy Department grant from the $80 million provided in the 2009 stimulus bill for transmission network planning, but has not decided whether to do so.

The Atlanta meeting is "just the start," Whiteley said. "The list of names is growing, and the interest from other regional planning entities is growing. I've not heard of anybody in the East involved in regional planning who's said this is the wrong way to go."

Correction

Sen. Murkowski is a member of the Republican Party. An earlier version of the story gave an incorrect party identification.

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