ELECTRICITY:

State regulators still strongly distrust federal transmission siting -- study

State regulators and environmental groups fear federal authority to site transmission lines would create a process that would emphasize infrastructure over costs and environmental benefits, according to a survey unveiled today by the University of Texas Center for Energy Economics and the Terra Group, a stakeholder relations consultant.

The nine-month survey of 11 state regulatory commissions and major national environmental organizations found that while both groups admit that the U.S. transmission system should be improved both for reliability and environmental purposes, they believe placing that power in the hands of the Federal Energy Regulatory Commission will lead to overly expensive lines that are not all necessarily needed.

Many of the state regulators surveyed said they do not believe FERC could adequately balance local costs and needs versus the needs of a few states, the report says.

"State regulators believe almost unanimously that FERC-sited lines will be too expensive. The problem is that FERC is looking at a grand design, the transmission superhighway, which will benefit a few states at the expense of others," the report says. "And state authorities have little confidence that federal regulators can successfully balance competing needs. As one commissioner simply put it, 'The feds will bigfoot you.'"

The survey found state regulators are also skeptical that placing siting in the hands of the federal government would speed up the process, as the agency has no power over other federal authorities that need to grant approval in the process, such as the Interior Department.

State regulators have a mixed point of view when it comes to the role the federal government should play, according to the report. Some suggest FERC should take the lead in planning "a more integrated" national grid and then states should be in charge of routing and siting the lines, but other regulators are worried that it is just the beginning of a power grab by federal authorities, the survey found.

Still, the report says "virtually all" state regulators agree that FERC should have strong backstop authority with eminent domain to site lines when states cannot, which may make the states' siting job easier, "although they do not want FERC to use it."

The state regulators and environmental organizations understand that transmission is important in boosting renewable energy and cutting greenhouse gas emissions, the report says. But many state regulators prioritize the cost of transmission over carbon reduction among their many issues, it adds.

Meanwhile, environmental organizations have entered into the transmission debate and bolstered their technical expertise in the area, recognizing that additional lines may be needed to reach the ultimate goal of cutting carbon emissions, the report says.

But the groups still stress the need to maximize the use of the current grid, cutting demand and energy efficiency before building transmission -- although this is a growing area of conflict between local and national environmental groups. Certain incentives, such as FERC's guaranteed rates of return, could favor building infrastructure, according to members of environmental organizations surveyed.

"Ten years ago, most transmission opposition was local," Robert Wasserstrom, the study's principal investigator, said in a statement. "Now we're seeing national-level environmental organizations taking a more active and strategic role in opposing new transmission projects, primarily those used for coal-generated power. But they could become strong allies in new transmission that they can support," he said.

Including environmental groups early on in transmission planning will improve transmission projects' chances of success, similarly to actions in California's "Renewable Energy Transmission Initiative," although local opposition may still occur, the report says.

Click here to view the report.

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