National pastime

—Dr. Robert Peltier, PE Editor-in-Chief

During every summer hot enough to break peak demand records, the rhetoric heats up as well, with calls to rid the U.S. bulk-power system of bottlenecks. As the eternal optimist, I see large transmission projects showing signs of life and grid reliability improving. But not everyone is happy about that. Let me explain.

If you thought temperatures were a bit higher than normal earlier this year, you were right. According to the National Oceanic and Atmospheric Administration, the first six months of 2006 were the warmest in the U.S. since 1895, the year recordkeeping began. Over a three-day period in mid-July, seven regional grid operators broke records for peak demand set a year ago (see Global Monitor). Demand peaks continue to rise more quickly than capacity can be added or customers can be convinced to conserve. For many regions, the only two cost-effective ways to close the gap are to remove transmission constraints or bring in power from the few oversupplied regions that still exist.

Mind the gap

With summer outages now as distinctively American as baseball, Washington has found it politically expedient to take up the call for reliability. The Energy Policy Act of 2005 (EPAct) contained provisions that promise to ease congestion on the patchwork U.S. transmission and distribution system and thereby improve service to ratepayers. One called for the creation of an electric reliability organization (ERO) to develop and enforce mandatory reliability rules for the bulk-power system (see feature story) under the aegis of the Federal Energy Regulatory Commission (FERC). Few were surprised when FERC installed the North American Electric Reliability Council (NERC) as the nation’s first ERO this July; after all, NERC has been promulgating voluntary reliability standards for almost 40 years.

In the information age, interrupted electricity service isn’t merely an inconvenience; it’s a threat to national economic security, which is why the ERO enjoys universal support. I’m sure NERC’s experienced engineers realize that "small ball"—improving transmission control centers, upgrading operator training requirements, and giving grid operators better planning tools—is a better strategy for beefing up reliability than "managing for the three-run homer," as Earl Weaver did with the Baltimore Orioles during the 1970s and 1980s. I expect grid reliability will slowly increase over time once all the independent system operators and regional transmission organizations are using the same game plan.

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.