What can policymakers do to make the electric grid more flexible and resilient to hiccups? During today's OnPoint, former Congressman Rick Boucher (D-Va.) and former FERC Chairman Curt Hébert discuss a new report focused on the policies that can improve grid reliability. Boucher and Hébert, who are co-chairmen of the Bipartisan Policy Center's Electric Grid Initiative, explain why they believe policymakers need to re-evaluate their thinking on the electric grid and discuss the role coal and clean energy should play moving forward.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today are former Congressman Rick Boucher and former FERC chairman Curt Hébert. They are co-chairs of the Bipartisan Policy Center's Electric Grid Initiative. Thank you both for joining me.
Curt Hébert: Thank you.
Rick Boucher: Glad to be here.
Monica Trauzzi: Congressman, you've just unveiled a new report focused on the policies that can help improve grid reliability. Why are the trends, or what are the trends that are causing policy makers to sort of take another look at this and reassess how we're approaching this?
Rick Boucher: Well, we have unprecedented reliability issues today. We also have major congestion problems, and we also have now about 25 states with renewable portfolio requirements mandating, or incenting, in the case of some states, that utilities acquire a certain percentage of their total generation from renewable resources. Renewable resources typically are not found where electricity is consumed, and so long distance transmission will need to be built if the states are going to meet their targets, and if we're going to utilize the nation's vast wind and solar energy potential in order to serve load centers and generate electricity for the places where it's consumed. We have a process at the federal level. FERC now has authority under the 2005 legislation, under very restricted circumstances, to order that transmission lines be built, but that process is broken. It never has functioned effectively. Not a single project has cleared that FERC process. And we think it's time that that process be reexamined, and we've made recommendations to in some respects limit the authority of FERC under that process; in other respects, to broaden it. It's a balanced and nuanced approach. And given the pressures we have from reliability needs, from congestion, and from the need to integrate renewables into the electricity grid, we think the time has come for Congress to act on that proposal.
Monica Trauzzi: Chairman, obviously grid reliability got a lot of attention during the Super Bowl, when the lights went out at the Superdome. Is the issue with reliability as serious as that incident would suggest?
Curt Hébert: Well, there are lots of questions about why that occurred, and certainly, you know, there is an investigation underway, and they will figure that out. But any time you have an outage, it doesn't matter if it's Katrina, Hurricane Sandy, which, you know, obviously they're trying to recover from right now, even something I was very involved in, 2003, the blackout you had in the Midwest and Northeast. And there are costs involved. I mean, there are annual costs that are estimated as high as about $78 billion from outages. So what is it that we can do to lesson those? It's everything from, as the Congressman talked about, looking at grid reliability from a standpoint of how do you deal with siting, how do you deal with delivering the cleaner fuels to market, how do deal with the newer technologies? If, for instance, you can find a way to make a system more reliable by having something like a phasor measurement unit that might measure a flow 30 times in a second, as opposed to once every four seconds, how important is that, and how might that reduce costs that otherwise are going to be on your system? Those are all very important, not to mention one of the things that we talked about, that we decided not to expand on in this, and that is the propensity and possibility for cyberattacks, and that is something that the Bipartisan Policy Center understands is an issue on the grid we are going to look at. But outages, I mean, they're real, and there are real costs involved, not only financially, but security is a big issue when the lights go out. You take a hot summer and the lights go out, people have heat exhaustion. We have all kinds of issues. So there are genuine concerns where reliability is an issue, and this report identifies some low hanging fruit where we can go out and make some changes.
Monica Trauzzi: So what role, Congressman, should coal be playing, then? Because one of the things we heard after the Super Bowl incident was, well, this is the case for keeping coal plants online, because they're more reliable. So how much more reliable are they than the clean energy sources?
Rick Boucher: Our recommendations really don't address fuel choices by utilities. That will and should remain their decision. We don't address environmental regulation issues, either. We are a bipartisan group, as the Bipartisan Policy Center, our organizing entity, suggests. Curt was a Republican former chairman of the FERC. I'm a former Democratic member of Congress and former chair of the Subcommittee on Energy and Air Quality. And we have a task force comprised of about 30 individuals with a broad range of interests and lots of policy expertise working with us. And the recommendations we're putting forward carry the imprimatur of that entire task force. Interests that often disagree on the kinds of issues we've been addressing have come to agreement on the set of recommendations we're making, and we're targeting our recommendations at the FERC, at the Department of Energy, and also at the Congress. So it's a multifaceted set of recommendations, all in the spirit of trying to enhance reliability of the grid, relieve congestion in the places where it exists, and find a way to integrate renewables into the nation's electricity system. I think it's in the public interest, and enough time has passed since our primary Congressional recommendation was last acted on, that as 2005, and circumstances have changed enough that I think Congress now will have an interest in reexamining that backstop siting authority, taking current conditions into account and then making a judgment about whether the time really has arrived in order to make the kinds of changes to strengthen that process that we're recommending. Our task force agrees that that time has arrived, and the members there are I'm sure going to be active in the process of talking with members of Congress in order to help them come to the right conclusions with regard to these suggestions.
Monica Trauzzi: Chairman, has our focus on emissions impacted the level of reliability we have? And sort of what's the interplay between this effort to reduce emissions, especially from power plants, and the reliability of the grid?
Curt Hébert: Well, I think it has everything to do with one of the things that the Congressman mentioned earlier on with fuel choice. I mean, obviously, as you see these standards come online, it requires certain fuels probably to go offline. We know that's going to happen. And when we talk about cleaner fuels in this report, we don't define cleaner fuels, and we don't say it's necessarily solar or wind or gas or cleaner goal, but what we do know is that cleaner technologies are going to come online, and we are going to have to make certain for the benefit of the customer that they get delivered to the marketplace. And that in and of itself is a challenge. So yes, the emission standards are playing a role. They're going to play a role in decisions that utilities make when it comes to generation. But they're, it's also going to play a role in hopefully a real reliable, robust, sustainable grid that spreads out and has a very diverse portfolio.
Monica Trauzzi: Obviously, this is a bipartisan effort. Congressman, is there support in Congress, in both chambers in Congress, though, to move something like this, to pass legislation that would deal with grid reliability and moving forward on this?
Rick Boucher: We're not going to know that until Congress has an opportunity to evaluate this set of recommendations, but I think members are interested in grid reliability. The blackouts we've had, the most prominent one that occurred during the Super Bowl, I think heightened interest in that subject. And because this recommendation will be endorsed by such a broad set of interests represented on our task force, I think we have a genuine opportunity. I was asked the question today, what are the prospects for this bill in the Congress, and my answer is good. It's a hazardous occupation to try to predict the course of legislation. We know that. But I think given the changed circumstances since Congress adopted the 2005 backstop authority, and the weight of these recommendations, coming from such a broad range of interests, and having a bipartisan foundation, gives us an excellent chance to have these recommendations considered and passed.
Curt Hébert: Monica, if I might add one piece to just kind of show the bipartisan nature of this, you know, not only do you have Congressman Boucher and myself, but we also had another co-chair, Allison Clements with NRDC, and when it comes to environmental issues and emissions and things like that, she brought a lot to the table. And when you look at the commission that was put together by the Bipartisan Policy Center, what you understand is it's everyone from the NRDC all the way to vertically integrated utilities, all in a room, coming together, being intellectually dishonest [09:03], putting things on the table, coming up with recommendations that we can take and move forward with.
Monica Trauzzi: All right. We're going to end it right there. Thank you both.
Rick Boucher: Thank you.
Curt Hébert: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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