Grid ‘seams’ still a challenge for long-distance transmission developers
Almost a decade after FERC tried to smooth the path for transmission that crosses RTO seams, developers say little progress has been made.
The Great Plains are blessed with huge wind energy potential but relatively little need for electricity. Meanwhile, cities to the east have lots of demand for power but little open space for wind development.
The challenge of getting clean energy from one place to the other involves overcoming more than just distance. Projects must cross invisible seams that separate regional transmission organizations, and that, developers say, involves a regulatory path so dysfunctional that it’s stunted the prospects for long-distance transmission in most of the country.
Almost a decade after the Federal Energy Regulatory Commission issued an order addressing the issue, developers and others say there’s been little progress even as demand for renewable power continues to grow.
“I don’t think you’ll find anyone that has cracked this nut,” said Chris Winland, director of strategic planning for transmission developer ITC Holdings. “There’s not a place in the country where it’s working great.”
Regional transmission organizations (RTOs) are membership-based nonprofit organizations that coordinate, control and monitor the electric grid across multiple states. The first of the 10 RTOs now operating was created in the 1990s to encourage competitive generation by requiring open access to transmission.
So-called “seam” projects come with a host of unique planning and regulatory issues, said Betsy Beck, director of transmission policy for the American Wind Energy Association. Each region has its own modeling assumptions, approval process, and decisionmakers. Regions also need to come together to analyze whether a project will benefit both regions, and they don’t always agree.
“They may clear the first hurdle, and even the second,” Beck said, but the third hurdle sometimes can’t be cleared.
RTOs just don’t agree on the benefits sometimes because they use different assumptions, said Charles Cates, who manages transmission services for the Southwest Power Pool. “SPP encounters such challenges to identifying and executing… joint projects along seams with all of our neighbors,” Cates said.
That means generation is effectively trapped within regional transmission operator boundaries, and that can deprive customers from the cheapest and most-efficient source of power.
“We’re not building inter-regional transmission anywhere,” said Rob Gramlich, founder and president of Grid Strategies, a consulting firm geared at enabling the integration of clean energy into the grid. “The economics would show there are a lot of opportunities in terms of benefits exceeding costs for consumers. But it’s not translating into action.”
Who pays for what? It gets tricky.
The need for inter-regional transmission, and the obstacles that now lie in the way, are fairly recent developments. During the 1970s and 80s, grid construction was focused on connecting utilities to allow them to share reserves and generation in times of need, Gramlich said.
Starting in about 2005, a focus on regional transmission emerged. Orders from the Federal Energy Regulatory Commission, along with the Energy Policy Act of 2005, put a priority on building more transmission, both regional and inter-regional.
In 2010, the FERC issued Order #1000. One of its aims was to push RTOs to move forward on inter-regional transmission projects. The minimal progress to date has been limited to “the smallest, very marginal projects,” Beck said. The MISO and PJM grid operators approved the first set of inter-regional projects in the region they serve. The border between the two RTOs runs through Illinois, Indiana, Wisconsin, Michigan and Ohio.
“In an effort to find the common ground, the RTOs have really narrowed their scope, resulting in minor upgrades,” Beck said. “They are still beneficial, but pretty marginal. We think the scope should be broadened. We know there would be a lot of benefit if they’d look at some bigger projects.”