Tuesday, August 2, 2011

Energy Corridors

In 2007, the U.S. Department of Energy (DOE) designated the Southwest Area National Interest Electric Transmission Corridor (including parts of California and Arizona). The designation of a national corridor accomplishes two tasks:
  • It signifies that the federal government has concluded that a transmission congestion problem exists in the area and requires timely solution.
  • It enables the Federal Energy Regulatory Commission (FERC), under certain conditions, to approve siting and construction of transmission facilities within the Corridor (Meyer 2007).
According to the DOE the congestion in the Southwest is significant and will worsen without sustained and appropriate actions such as the Corridor designation. The DOE also states that the designation does not necessarily preempt state jurisdiction, although this is disputed by states and environmental groups. Secretary of Energy, Samuel W. Bodman said, “The goal is simple—to keep reliable supplies of electric energy flowing to all Americans. By designating these National Corridors, we are encouraging stakeholders in these regions to identify solutions and take prompt action” (U.S. DOE 2007). The DOE explains that the Corridor designation does not:
  • Determine how the affected area’s congestion problem should be solved.
  • Propose, direct, order or authorize any activity.
  • Endorse particular transmission projects.
  • Circumvent compliance with any existing federal environmental requirements concerning transmission or other facilities (Meyer 2007).
The Federal Energy Regulatory Commission (FERC) may take action under the following circumstances:
·         The state does not have the authority to site the project.
·         The state does not have the authority to consider interstate benefits associated with the project.
·         The applicant does not qualify for a state permit because it does not serve end-use customers in the state.
·         The state has withheld approval of the project for more than one year.
·         The state has conditioned its approval such that the project would not significantly reduce congestion or be economically feasible (Meyer 2007).
The actions of FERC may be viewed by states and local jurisdictions as excluding their regulatory process. This appears to be a significant issue in the Corridor process receiving support from the states. The states of California and Arizona both opposed the corridor designation.
The State of California offered much of its comment through the California Public Utilities Commission (CPUC). CPUC expressed general concern about the lack of state involvement in the FERC process. The FERC process generally seems to override any state concerns or denials. The CPUC noted that the corridor designation is “overly broad from a legislative and practical perspective, and could seriously impair California’s coordination of its transmission and renewable energy planning” (State of CA). CPUC also argued that potential litigation over the siting of transmission lines under the Corridor/FERC process could lead to significant litigation which would cause significant delays for all interested parties. CPUC continued to argue that these delays would make the process more onerous than the existing processes and it would be better to let the stakeholders work out a compromise than letting the issue linger in litigation (State of CA). The CPUC also argued that they are currently working to address the congested areas of Southern California and that the Corridor designation should not have occurred until the current state processes are complete.
California is currently addressing congestion and transmission lines in several projects. It is estimated that there is $2.3 billion in potential transmission infrastructure investment before the CPUC in 2008 and 2009. California has also worked to streamline their transmission process in order to expedite applications. According to the CPUC, California has adopted new energy policies which require substantial increases in the generation of electricity from renewable resources. These new energy policies will require “extensive improvements” to the electric transmission infrastructure to transfer the electricity generated from renewables to consumers. California has created the Renewable Energy Transmission Initiative (RETI) to address the transmission needs for the new renewable energy projects. RETI is also intended to support future energy policy and facilitate transmission corridor designation and transmission and generation siting and permitting (California Energy Commission). CPUC also notes that “RETI will assess all competitive renewable energy zones in California and possibly also in neighboring states that can provide significant electricity to California consumers by the year 2020. RETI will identify those zones that can be developed in the most cost effective and environmentally benign manner and will prepare detailed transmission plans for those zones identified for development (California Energy Commission).
The Arizona Corporation Commission (ACC) is an agency similar to the California Public Utility Commission. In 2007 the ACC responded to a request for comments from the DOE regarding the Corridor designation. The ACC commented that the Corridor designation “in its entirety is unwarranted, not well founded on available information, and not needed in any location in Arizona” (ACC 2007). The ACC also expressed concerns similar to California regarding the lack of state and local control or interaction.
Arizona is also working toward creating improvements to their transmission capabilities. The ACC prepares a Biennial Transmission Assessment (BTA) every two years which is intended to inform the ACC regarding the adequacy of existing and planned transmission facilities in Arizona to meet present and future energy needs of Arizona customers, in a reliable manner (ACC 2007). The BTA process ensures that transmission issues are not placed on a back burner until they reach a critical point. By regularly assessing and identifying the existing situation, the Commission is kept aware of the necessity of transmission (Mayes 2009). The ACC works with transmission planning groups and government agencies to create regional planning efforts to address transmission. The ACC believes these efforts are “superior” to any federal process for transmission planning (ACC 2007). Arizona also employs a Line Siting Committee which is charged with efficient siting and construction of transmission lines. The Committee has 180 days to reach a decision from the date of filing of an application. The ACC says that “this streamlined approach is in part one of the reasons why the ACC has approved over twenty major transmission projects totaling in excess of 600 linear miles of transmission corridor plus associated substation facilities since 2000 (Mayes 2009).
The general function of a state is to serve the citizens of that particular state. It is to be expected that individual states would give siting priority to electric transmission projects that primarily serve their state over another state. However, this approach should be done within the legal confines of the siting process. If a state were to create a process that favored siting of transmission projects that only served that state it would seem to be open to a variety of lawsuits. Even though it is expected that states would favor projects in their own best interest it may not be the best choice. This puts everyone at a disadvantage and may create backlash among project proponents. The best approach would be for states to work together as part of a regional cooperative group that addressed the needs of a particular region rather than only identifying those needs within state boundaries. A regional approach favors the consumer and provides a better product in the end. Although the regional approach is not easy and does not always offer the best solution for individuals of a particular state it is likely the most effective approach for dealing with the increasingly congested transmission lines across the United States.
The Corridor designation is a difficult issue and comparable to the advantages and disadvantages of regional approaches. The most controversial part of the Corridor designation appears to be the implication that there is little to no local involvement and if a project has been denied by a state or delayed FERC can override that determination. It may have been more savvy to create a process whereby the states involved received a seat at the table and were allowed to participate in discussions or the permitting process. Although there certainly may be additional time required for such participation it is still important that states are able to represent the needs and concerns of their citizens and not be ignored by the federal government.

Reference List
Arizona Corporation Commission. 2007. http://www.cc.state.az.us/
California Energy Commission. Renewable Energy Transmission Initiative (RETI). http://www.energy.ca.gov/reti/
California Public Utilities Commission. 2006. Developments in transmission siting at the PUC. ftp://ftp.cpuc.ca.gov/puc/
Mayes, Kris. 2009. Arizona Corporation Commission. NARUC Electricity Committee Meeting. http://www.narucmeetings.org/
Meyer, David. 2007. Draft Southwest area national interest electric transmission corridor. U.S. Department of Energy, Office of Electricity Delivery and Energy Reliability. http://sites.energetics.
State of California. California Public Utilities Commission. http://www.cpuc.ca.gov/PUC/energy/wholesale/02_planning/01_eap/nietc.htm
U.S. Department of Energy. 2007. DOE designates Southwest area and Mid-Atlantic area national interest electric transmission corridors. http://www.energy.gov/news/5538.htm

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