September 15, 2006

National pastime

More grid, less lock

In the big leagues of electricity transmission, managing for the three-run homer would be akin to depending on the timely construction of new transmission lines. Both events are fairly rare. Examples of states being unable or unwilling to approve new transmission projects abound. One of the most egregious examples is AEP's Wyoming-Jackson Ferry line completed this summer—16 years after the project's launch, 14 of which were spent wrangling over siting. Such delays stand in stark contrast to regional operators trying to squeeze every kilowatt-hour out of their system during peak-demand periods.

EPAct has broadened FERC's power to unilaterally resolve a narrowly defined group of contentious cases when the parties cannot. But before those powers kick in, the DOE must identify areas of high congestion (the agency issued its National Electric Transmission Congestion Study report in early August) and then designate "national interest electric transmission corridors." Energy Secretary Samuel Bodman is expected to make the first round of those designations by year's end, after 60 days of public comment. Then the fun will begin.

As part of its new powers, FERC has the authority to issue a construction permit for a new line in a national-interest corridor when a state has withheld approval of a project for more than one year or has conditioned its approval in a way that makes the project economically unfeasible. In other words, when a project of national importance is stalled by political maneuvering or legislative interference with the permitting process, FERC can step in and put it in gear again.

States' rights—and wrongs

In theory, giving Washington the power to override a state's "veto" of a transmission project that could benefit national economic security makes a lot of sense. In practice, however, local politicians are much quicker to respond to a perceived political threat than Congress, FERC, or the DOE will ever be.

Case in point: Upstate New York State Senator John J. Bonacic is already posturing for a long fight against a proposed 200-mile-long, 1,200-MW, high-voltage DC transmission line that would run from Utica down through the bucolic Delaware River valley into power-hungry New York City. Bonacic garnered enough local support to pass a law forbidding the developer from using eminent domain as a rationale for obtaining the necessary rights of way. That means the developer will have to go to federal court for the rights even if FERC determines that the project is "critical" and permits it. As a result, the project will have been tainted long before it can get a fair hearing.

I bet that FERC will never have to use the "nuclear option" on any project that the DOE deems "critical." Shining the national spotlight on any project should be enough incentive for all of its stakeholders to make nice and find common ground. FERC's big stick will have no impact on the rest. EPAct changes many things, but not two fundamentals: All politics are still local, and politics is still one of our national pastimes.