Tackling “Transmission III”—Problems for the Renewable Generation Backlog

30 March 2022
By Dr. Jeff D. Makholm

NERA Managing Director Dr. Jeff D. Makholm has coined the term “Transmission III” to frame the problem facing the Federal Energy Regulatory Commission (FERC) as it struggles to deal with an increasingly pressing backlog of renewable electricity generation projects. The root of the problem is geography—the best, low-cost renewable generation sites (in the nation’s interior) are inconveniently located far from US population load centers. Transiting such routes means that renewable generation must cross state lines and various organized regional wholesale power markets—a trip that existing US transmission networks were not designed to handle. He describes how overcoming such geographical entry barriers is not so much a technical as a political and regulatory problem.

Dr. Makholm describes how the FERC’s stunning success in overcoming geographic barriers in the transmission of natural gas is the most helpful case study for dealing with the agency’s renewable transmission problems. Congress knew by the 1930s that overcoming geography was the key to supplying secure natural gas supplies to American consumers. It wrote legislation giving federal regulators muscular control over interstate rights of way to facilitate competitive markets for the fuel, while at the same time permitting state-regulated utilities to do the planning and contracting needed to support such interstate natural gas transmission pipeline infrastructure. In effect, a far-sighted 1930s congress created effective rules to permit the nation’s millions of consumers to reliably support the geographically oriented, national pipeline transmission infrastructure needed to serve them.

The same congress, writing national electricity legislation also in the 1930s, could not foresee climate change exigencies and the press for the entry of renewable generation. Much of the FERC’s work on the regulation of interstate electricity transmission over the past two decades is paradoxically more of a barrier than a facilitator in clearing the renewable generation backlog. The FERC’s current “Advanced Notice of Proposed Rulemaking” regarding transmission signals a narrow-focus specialization that may impede the FERC from finding a solution. A wider focus would help to see that the sort of transmission needed to solve geographical supply problems is different. Most importantly, a wider focus would reveal the FERC’s impressive history in dealing with similar geographic interstate energy supply problems. DOE and FERC can learn a lot from those successes in dealing with the difficult renewable generation backlog.

Makholm, Jeff D. (February, 2022). “Tackling “Transmission III”—Problems in 2022 for the Renewable Generation Backlog,” 38/8, ©2022 Wiley Periodicals, Inc., a Wiley Company