IIJA: Efforts to Address Electric Transmission for Reliability, Resilience, and Renewables

IIJA: Efforts to Address Electric Transmission for Reliability, Resilience, and Renewables

INSIGHTi
IIJA: Efforts to Address Electric Transmission
for Reliability, Resilience, and Renewables
December 9, 2021
With the February 2021 electricity blackouts in Texas, the past summer blackouts in the Pacific
Northwest, and the recurring power outages in California, attention focused on how addressing
transmission issues could help address reliability and other arising issues. With the retirement of many
older coal and natural gas facilities, many states and regions are becoming more reliant on imported
power from their neighbors, even as region-wide weather and other chal enges limit the surplus power
availability. Another common issue is transmission congestion, which can occur when insufficient paths
for the economic flow of power exist, and can result in an increased cost of electricity.
Transmission congestion adversely affects several U.S. regions, as a lack of capacity to efficiently
transmit electricity leads to the curtailment of power generation, and can result in increased electricity
prices. In some cases, renewable electricity from wind and solar facilities cannot get to customers as
power lines do not have enough transmission capacity. Transmission congestion has been an acute issue
for the pipeline of renewable projects in the Midwest. Between 2016 and 2020, an estimated 245
advanced stage renewable energy projects were reported withdrawn due to congestion and related grid
upgrade costs, representing approximately 40% of projects in the Midcontinent Independent System
Operator’s queue.
Investment in new transmission facilities remains an area of government interest. The Federal Energy
Regulatory Commission (FERC), which oversees the reliability of the U.S. bulk power system, initiated a
proposed rulemaking process that considers the potential need to improve how transmission lines are
planned and paid for, as wel as the process by which new generators—including solar and wind farms—
connect to the grid.
Increased transmission ties could also potential y enhance national electric grid reliability and resilience
by increasing the ability of power to flow across U.S. regions to where power is needed. A more efficient
transmission system could potential y al ow more states to meet goals for renewable energy generation.
Some of the higher quality renewable sources for electricity are on the Outer Continental Shelf, where
high quality wind and tidal resources exist. However, these coastal resources wil likely need a large
increase in transmission capacity onshore, as wel as high-voltage direct-current transmission systems to
bring that power onshore to networks.
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The use of hydrogen for electricity generation might benefit from additional investment in electricity
transmission infrastructure. Rather than building new, or modifying existing, pipelines to transport
hydrogen from production sites to electricity generators, electricity might be generated on-site and
transmitted to demand centers by enhanced or new transmission lines.
Increased electric transmission capacity would likely also improve transmission efficiency. On average,
about 2% of energy generated in the United States is lost in the transmission process (with almost 4% also
lost in the distribution system). Shorter transmission lines operating at lower voltages tend to lose more
energy (relatively speaking) than longer, higher voltage lines. Increased and more efficient transmission
capacity could help to minimize these losses.
The Infrastructure Investment and Jobs Act (IIJA; P.L. 117-58) includes several key provisions related to
transmission modernization and expansion, with the general goals of improving electric grid reliability
and resilience. These provisions may also incentivize building new transmission lines to access renewable
energy resources, and potential y increase linkages between the Eastern and Western Interconnections.
While these interconnections largely operate independently from each other, approximately 1,300
megawatts of transmission capacity connect the three transmission systems (including the independent
grid run by the Electric Reliability Council of Texas).
In particular, Section 40105 of IIJA revises the process for designation of a National Interest Electric
Transmission Corridor (NIETC) by the Department of Energy (DOE). A key revision al ows for an
NIETC designation that may lead to new interstate transmission lines specifical y for intermittent (e.g.,
renewable) energy to connect to the electric grid. Another key change in the section enhances FERC’s
“backstop” siting authority for transmission lines in NIETCs. This would al ow FERC to supersede
traditional state permitting of transmission facilities and issue a permit for the construction and operation
of certain interstate facilities under defined circumstances, including when a state has denied an
applicant’s request to site transmission facilities.
Section 40106 establishes the ‘‘Transmission Facilitation Program,’’ under which DOE can facilitate the
construction of electric power transmission lines and related facilities. Under this program, DOE may
potential y enter a capacity contract (for no more than 40 years or 50% of the total capacity) with respect
to an eligible transmission project; issue a loan to an eligible entity for an eligible transmission project; or
participate with an eligible entity in designing, developing, constructing, operating, maintaining, or
owning an eligible transmission project. Thus, under a capacity project, DOE could be closely involved in
operational support of eligible transmission-line construction. Such an arrangement could help move a
transmission project from proposal to construction, as a transmission project is unlikely to be built
without significant customer commitment to its use. Section 40106 also establishes a “Transmission
Facilitation Fund” to help finance eligible projects deemed to be in the public interest.
The new authorities accorded to DOE in the IIJA may help future planning for the grid and its needs
increase a focus on national and regional priorities, while al owing for additional coordination with states
who retain primary siting authority for electric transmission lines.

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Author Information

Richard J. Campbell

Specialist in Energy Policy

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