U.S. prepares more regulatory moves in case climate bills stall

The Obama administration holds several potential trump cards if Congress ultimately deadlocks over climate legislation, current and former officials said yesterday. They cited existing powers of the federal government to push forward parts of the climate and clean energy agendas on its own.

A large and obvious stick in the closet is U.S. EPA's ability to regulate greenhouse gas emissions under the Clean Air Act. EPA is completing an "endangerment finding" that serves as a basis for new regulation.

The electric power grid can also be expanded to handle a surge of new renewable energy, even if Congress does not act, by the Interior Department and the Federal Energy Regulatory Commission, leaders of those two agencies said yesterday.

Whether this message spurs supporters of climate policy in Congress or stiffens opposition remains to be seen.

Speaking at a conference on transmission planning yesterday, Interior Secretary Ken Salazar noted that his department is mapping new transmission corridors through public lands and tribal areas, working with the Western governors and Native American tribal leaders. The Bureau of Land Management is processing 30 applications for transmission rights-of-way and will fast-track seven of these projects in California, Idaho and Nevada, spanning 1,000 miles. Construction permits should be ready by the end of next year, and that will be in time for the projects to qualify for federal economic stimulus funding, he said.


Transmission projects have faced harder opposition in the thickly populated Eastern states than in the West. The process in Eastern states is so tangled in regulation and politics that major projects may not be ready to go before federal stimulus grant authority expires in 2011, said Edward Krapels, CEO of Anbaric Holding, a private transmission developer that participated in yesterday's conference.

A Cabinet-level panel works on a 'unified' strategy

Salazar said that a Cabinet-level committee is developing recommendations for President Obama for overcoming barriers to transmission expansion in both Eastern and Western grid interconnections. "We are assembling a unified, forward-looking strategy for siting [transmission lines], cost allocation and coordination of permitting for proposed projects," Salazar said.

The panel includes the heads of the Interior, Energy and Agriculture departments and the Council on Environmental Quality and FERC Chairman Jon Wellinghoff. "It is probably the first time we have had FERC sitting at the same table with Cabinet secretaries," Salazar said.

Wellinghoff, who followed Salazar at the conference, called attention to two FERC initiatives on transmission planning and expansion. The commission staff has concluded public hearings in Phoenix, Atlanta and Philadelphia on industry and regulatory barriers to renewable energy transmission.

FERC has also asked the Lawrence Berkeley National Laboratory to study how best to integrate large amounts of variable wind and solar power into the existing grid, and what grid investments will be needed if renewable electricity grows to supply 20 percent or more of the country's power needs. That study is expected out in March or April, he said.

Working out who pays for long-distance transmission

The House climate legislation that passed in June and legislation approved in August by the Senate Energy and Natural Resources Committee move in different ways to clarify FERC's authority to order transmission line construction if states don't act.

Wellinghoff said the Senate bill is "on the right path, generally," except for an amendment to the bill by Sen. Bob Corker (R-Tenn.). It would prevent FERC from spreading the costs of major new transmission broadly across multi-state regions unless the commission could justify it by showing specific economic and grid reliability benefits. Corker's amendment has support from state officials who fear their customers would have to help pay for long-distance transmission lines carrying renewable power that they would never use.

The broad societal benefits that could come from using cleaner renewable energy may be hard to quantify precisely, Wellinghoff said, and thus the Corker amendment could "tie us up in courts forever."

Wellinghoff's predecessor, former FERC Chairman Joseph Kelliher, told the conference yesterday that FERC already has considerable power to allocate costs widely for regional transmission projects. The commission has been "very deferential" to regional transmission organizations on this issue in the past; it should defer no longer if regional organizations are frustrating grid expansion, Kelliher said.

Both Salazar and Wellinghoff played down the need for a heavy federal hand in resolving regional transmission disputes, saying the states should continue to take the lead in transmission planning. But Salazar said FERC needs clear backup siting authority if states don't act. "It is also my fervent hope that can be avoided, as we are doing in the West [by] working with stakeholders on the ground" to draw new transmission corridors for renewable energy, he said.

A need for multiple plans

The Energy Department is offering $80 million to fund regional transmission planning studies designed to deal with a rapid growth of renewable power.

Wellinghoff said the current debate over "top down" transmission planning directed by DOE and FERC or "bottom up" planning from the regions is a "false choice."

"It is indisputable that local subregional planning and coordination must continue" to handle normal grid upgrades, he said. Moving renewable power across regions, however, requires a multi-state planning approach, he argued.

"We need multiple plans. We're not going to be doing away with the state and regional plans. Those are going to continue, because you need those for economic and reliability purposes. But you do also need an overarching plan across the interconnection" to deal with national climate policies, he said. "States should continue to have first opportunity to site transmission facilities. Nevertheless, I believe that under very limited and appropriate circumstances, transmission developers should have recourse to federal siting authority at the commission" if projects are stalled at the state level, he said.

FERC's authority to order transmission projects under the 2005 Energy Policy Act has been substantially negated by a 4th U.S. Circuit Court of Appeals decision in the Piedmont Environmental Council's challenge of a transmission line into Virginia. If that stands, FERC's role in transmission siting is "a dead letter," said Kelliher, calling the decision "screamingly incorrect."

If Congress does not enact new energy legislation clarifying FERC's authority, the agency could still be an effective force in assuring grid expansion -- provided the 4th Circuit decision is reversed by the U.S. Supreme Court, Kelliher said.

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