[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
POWERING UP CLEAN ENERGY: INVESTMENTS
TO MODERNIZE AND EXPAND THE ELECTRIC GRID
=======================================================================
HEARING
BEFORE THE
SELECT COMMITTEE ON THE
CLIMATE CRISIS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
MAY 20, 2021
__________
Serial No. 117-4
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
www.govinfo.gov
Printed for the use of the Select Committee on the Climate Crisis
__________
U.S. GOVERNMENT PUBLISHING OFFICE
44-954 WASHINGTON : 2021
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SELECT COMMITTEE ON THE CLIMATE CRISIS
One Hundred Seventeenth Congress
KATHY CASTOR, Florida, Chair
SUZANNE BONAMICI, Oregon GARRET GRAVES, Louisiana,
JULIA BROWNLEY, California Ranking Member
JARED HUFFMAN, California GARY PALMER, Alabama
A. DONALD McEACHIN, Virginia BUDDY CARTER, Georgia
MIKE LEVIN, California CAROL MILLER, West Virginia
SEAN CASTEN, Illinois KELLY ARMSTRONG, North Dakota
JOE NEGUSE, Colorado DAN CRENSHAW, Texas
VERONICA ESCOBAR, Texas ANTHONY GONZALEZ, Ohio
------
Ana Unruh Cohen, Majority Staff Director
Marty Hall, Minority Staff Director
climatecrisis.house.gov
C O N T E N T S
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STATEMENTS OF MEMBERS OF CONGRESS
Page
Hon. Kathy Castor, a Representative in Congress from the State of
Florida, and Chair, Select Committee on the Climate Crisis:
Opening Statement............................................ 1
Prepared Statement........................................... 3
Hon. Garrett Graves, a Representative in Congress from the State
of Louisiana, and Ranking Member, Select Committee on the
Climate Crisis:
Opening Statement............................................ 4
WITNESSES
Linda Apsey, President and CEO, ITC Holdings Corp
Oral Statement............................................... 6
Prepared Statement........................................... 8
Donnie Colston, Director, Utility Department, International
Brotherhood of Electrical Workers
Oral Statement............................................... 12
Prepared Statement........................................... 13
Emily Sanford Fisher, General Counsel, Corporate Strategy, and
Senior Vice President, Clean Energy, Edison Electric Institute
Oral Statement............................................... 15
Prepared Statement........................................... 18
Michael Skelly, Founder and CEO, Grid United
Oral Statement............................................... 21
Prepared Statement........................................... 22
SUBMISSIONS FOR THE RECORD
Report from Americans for a Clean Energy Grid, Transmission
Projects Ready to Go: Plugging into America's Untapped
Renewable Resources, submitted for the record by Ms. Castor.... 44
Report from American Council on Renewable Energy, Investment Tax
Credit for Regionally Significant Electricity Transmission
Lines: A Description and Analysis, submitted for the record by
Ms. Castor..................................................... 44
Letter from the American Council on Renewable Energy to the
Select Committee in support of investments and policies to
upgrade and expand the electric grid, submitted for the record
by Ms. Castor.................................................. 44
Letter from the Solar Energy Industry Association (SEIA) to Chair
Castor in support of transmission investments to help achieve
100 percent clean electricity, submitted for the record by Ms.
Castor......................................................... 48
APPENDIX
Questions for the Record from Hon. Kathy Castor to Linda Apsey... 50
Questions for the Record from Hon. Jared Huffman to Linda Apsey.. 52
Questions for the Record from Hon. Kathy Castor to Donnie Colston 52
Questions for the Record from Hon. Kathy Castor to Emily Sanford
Fisher......................................................... 54
Questions for the Record from Hon. Anthony Gonzalez to Emily Sanfo
rd Fisher...................................................... 56
Questions for the Record from Hon. Mike Levin to Emily Sanford
Fisher......................................................... 56
Questions for the Record from Hon. Kathy Castor to Michael Skelly 58
POWERING UP CLEAN ENERGY:
INVESTMENTS TO MODERNIZE AND EXPAND
THE ELECTRIC GRID
----------
THURSDAY, MAY 20, 2021
U.S. House of Representatives,
Select Committee on the Climate Crisis,
Washington, DC.
The committee met, pursuant to call, at 9:30 a.m., via
Zoom, Hon. Kathy Castor [chairwoman of the committee]
presiding.
Present: Representatives Castor, Bonamici, Brownley,
Huffman, Levin, Casten, Graves, Palmer, Carter, Miller,
Armstrong, Crenshaw, and Gonzalez.
Ms. Castor. The committee will come to order.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
As a reminder, members participating in a hearing remotely
should be visible on camera throughout the meeting.
As with in-person meetings, members are responsible for
controlling their own microphones. And members can be muted by
staff only to avoid inadvertent background noise.
In addition, statements, documents, or motions must be
submitted to the electronic repository to
[email protected].
Finally, members or witnesses experiencing technical
problems should inform the committee staff immediately.
Well, good morning, everyone, and thank you all for joining
this remote hearing. Today we are looking at the benefits for
our country and workers that come from modernizing and
expanding the electric grid.
I now recognize myself for 5 minutes for an opening
statement.
Well, we started this Congress with hearings focused on the
millions of jobs we can create in clean energy and resilience
and then the growing risks and costs of inaction. Once again
this week, we are seeing how extreme climate-fueled events harm
Americans across the country and put lives at risk. Rising
temperatures and the climate crisis are amplifying these
impacts.
Heavy rains and flooding in Texas, Louisiana, Oklahoma, and
Arkansas have left homes, businesses, and entire communities
under water. Over the weekend, more than 1,000 people in
southern California were forced to evacuate their homes when a
wildfire broke out in the Santa Monica mountains.
Current drought conditions and a wildfire in the middle of
May have already heightened fears of another long and brutal
fire season on the West Coast, and our hearts go out to the
families dealing with these disasters.
And, Ranking Member Graves, our thoughts are with you and
your constituents in the Baton Rouge area especially.
Our efforts here in Congress must focus on solutions to
help them, not only in the near term, but also the long term,
to avoid the catastrophic climate consequences for our
grandchildren--our children and our grandchildren. One of those
important solutions is to modernize and expand the electric
grid, making it stronger and more resilient.
Wildfires out West and cold snaps in the South have left
Americans in the dark and in danger just in the last 4 months.
And climate-fueled disasters continue to hit our energy
infrastructure, which is already in need of major repairs.
Nationwide, the American Society of Civil Engineers gives
American energy infrastructure a C-minus rating. We don't want
a C-minus. We are America. This is America. We can do better
than that. And when we do, hopefully together, we will create a
lot of jobs and mend our supply chains through Buy American.
Building a modern grid can increase our energy capabilities
and improve efficiency across America, all while ensuring
greater reliability. The energy catastrophe in Texas
demonstrated the need for safeguarding the Nation's
disconnected grids with better backup and interconnections.
We have many innovations at the ready. We just need to
deploy them. This also will create good-paying jobs that will
help jump-start the economy. According to a recent report from
Americans for a Clean Energy Grid, there are already almost two
dozen shovel-ready projects that will reduce connection,
improve reliability, and put over 1 million Americans to work.
Another report by the American Council on Renewable Energy
shows that an investment tax credit for priority high-voltage
transmission lines would lead to about 650,000 new jobs.
Both reports show that investing in our grid will create
jobs. That is why renewing and modernizing the grid is the
centerpiece of President Biden's American Jobs Plan. By passing
the President's infrastructure plan, we can put thousands--
hundreds of thousands--of people to work, laying thousands of
miles of transmission lines that will connect entire regions
across America. It is a historic investment and a once-in-a-
generation opportunity to invest in America so we come back
stronger.
We already have the innovative technologies needed to
increase the efficiency, capacity, and flexibility of our
electric grid, and the experts here today will help explain
how. We know we need to act quickly. As we expand clean energy,
we will also reduce pollution and lower electricity bills and
will build new transmission lines so that every city, town, and
county can access America's affordable and abundant wind and
solar energy.
We must set ambitious goals via a clean energy and an
energy-efficiency standard. Many States are way ahead of us on
this, and we need to catch up. Cleaning up the power sector
will also help us reduce carbon pollution from the
transportation, building, and industrial sectors. Many
automakers have already announced their commitment to electric
vehicles, and I loved watching President Biden this week take a
drive in the new Ford F-150 in Michigan, where he previewed the
new electric pickup truck and renewed his commitment to the
nationwide charging network.
This is how we solve the climate crisis, by unleashing
American innovation and building the cars of tomorrow in
America.
Today's witnesses will give us important insights on the
road ahead of us as we double down on clean energy in a way
that prioritizes workers and environmental justice. I look
forward to our conversation.
At this time, I will recognize Ranking Member Garret Graves
for a 5-minute opening statement.
[The statement of Ms. Castor follows:]
Opening Statement of Chair Kathy Castor
Hearing on ``Powering Up Clean Energy:
Investments to Modernize and Expand the Electric Grid''
Select Committee on the Climate Crisis
May 20, 2021
As Prepared for Delivery
We started this Congress with hearings focused on the millions of
jobs we can create in clean energy and resilience, and the growing
risks and costs of doing nothing. Once again this week, we are seeing
how extreme, climate-fueled events harm Americans across the country
and put lives at risk. Rising temperatures and the climate crisis are
amplifying these impacts.
Heavy rains and flooding in Texas, Louisiana, Oklahoma, and
Arkansas have left homes, businesses, and entire communities
underwater. Over the weekend, more than a thousand people in Southern
California were forced to evacuate their homes, when a wildfire broke
out in the Santa Monica mountains. Current drought conditions--and a
wildfire in the middle of May--have already heightened fears of another
long and brutal fire season on the West Coast. Our hearts go out to the
families dealing with these disasters. And our efforts here in Congress
must focus on solutions to help them, not only in the near-term, but
also to avoid catastrophic climate consequences for our children and
grandchildren.
One of those important solutions is to modernize and expand the
electric grid, making it stronger and more resilient. Wildfires out
west and cold snaps in the South have left Americans in the dark and in
danger just in the last 4 months. Climate-fueled disasters continue to
hit our energy infrastructure, which is already in need of major
repairs. Nationwide, the American Society of Civil Engineers gives
American energy infrastructure a C-minus rating. We don't want a C-
minus. This is America, and we can do so much better. And when we do
it, hopefully together, we will create a lot of jobs, and mend our
supply chains with Buy American.
Building a modern grid can increase our energy capabilities and
improve efficiency across America, all while ensuring greater
reliability. The energy catastrophe in Texas demonstrated the need for
safeguarding the nation's disconnected grids with better backup and
interconnections. We have many innovations at the ready, but need to
deploy them--and this also can create good-paying jobs that will
jumpstart our economy. According to a recent report from Americans for
a Clean Energy Grid, there are already almost two dozen shovel-ready
projects that will reduce congestion, improve reliability, and put over
a million Americans to work. Another report--by the American Council on
Renewable Energy--shows that an Investment Tax Credit for priority
high-voltage transmission lines would lead to 650,000 new jobs.
Both reports show that investing in our grid will create jobs
across America. That's why renewing and modernizing the grid is a
centerpiece of President Biden's American Jobs Plan. By passing the
President's infrastructure plan, we can put hundreds of thousands of
people to work laying thousands of miles of transmission lines that
will connect entire regions of our nation. It is a historic
investment--and a once-in-a-generation opportunity to invest in America
so we're come back stronger.
We already have the innovative technologies needed to increase the
efficiency, capacity, and flexibility of our electric grid. The experts
here today will highlight how, and we know we need to move quickly. As
we expand clean energy, we'll also reduce pollution and lower
electricity bills. And we'll build new transmission lines so that every
city, town, and county can access America's affordable and abundant
wind and solar energy. We must set ambitious goals via clean energy and
energy efficiency standards. Many states are way ahead on this and we
need to catch up.
Cleaning up the power sector will also help us reduce carbon
pollution from the transportation, buildings, and industrial sectors.
Many automakers have already announced their commitment to electric
vehicles. I loved watching President Biden drive the new Ford F-150 in
Michigan, where he previewed the new electric pick-up truck and renewed
his commitment to a nationwide charging network. This is how we solve
the climate crisis--by unleashing American innovation and building the
cars of tomorrow in America.
Today's witnesses will give us important insights on the road ahead
of us, as we double down on clean energy in a way that prioritizes
workers and environmental justice. I look forward to our conversation.
Mr. Graves. Thank you, Madam Chair.
And I do appreciate your recognition of some of the
extraordinary challenges our folks are going through back at
home. We recently had a storm this week where we got about 12
inches of rain in about 8 hours. In fact, I think there was 1
hour of time where we received about 4 inches of rain. So
pretty incredible. I think my quick math was within about 8 to
12 hours, our folks at home received as much rain as the
average American does in--40 percent of the average rainfall in
a year's time for the average American. So pretty incredible.
But, in any case, I want to thank you for having this
hearing. And, Madam Chair, as you know, every once in a while
we don't agree, but in this case, in terms of updating our
grid, I think this is an area where we absolutely share the
same objectives. We have seen blackouts and brownouts all
across the United States, and part of that is attributable to
some of the grid issues. We also, I believe, have cyber
vulnerabilities to much of our grid that needs to be addressed
as we work to update the grid system. And so I want to
reiterate that I think that we share that objective.
As a matter of fact, in Ms. Sanford's testimony, she makes
reference to a Princeton study that concludes that our grid
capacity in terms of high-voltage transmission is going to need
to triple between now and approximately 2050. Let me say that
again. The capacity of high-voltage transmission in our grid,
according to a Princeton analysis, indicates that it is going
have to triple in capacity between now and 2050. And so that is
very different than the status quo.
Madam Chair, this administration has talked a lot about
infrastructure. And I, once again, I share their concern for
infrastructure. I think, like, roads, bridges, flood
protection, I think that our ports, waterways, and airports are
all Federal obligations, Federal responsibilities. They are
part of the core infrastructure that the Federal Government has
an obligation to work on. But my large concern with what this
administration is trying to do is that putting an extraordinary
amount of taxpayer dollars into a system that is incapable of
delivering only results in more bad outcomes. And let me
clarify what I am talking about there.
You have heard, for example, that the average road project
now takes 7 years just to get through an environmental review.
I have no desire, and I am confident no one on this committee
has any desire, to go trash the environment. But if we have, I
believe, tripled the amount of time it takes to do an
environmental review from when this law was first passed, we
have got to take a fresh look at that. Let me say it again. Not
to shortcut our review of the environmental impacts but to make
sure that we are staying focused on the core objectives of that
law, making sure that we are truly focused on the best
environmental outcomes, but also staying focused on the project
outcomes, the project objectives, because the worst kind of
project in the world is a project that never gets finished.
Madam Chair, as you know, I have spent from my teenage life
on involved in infrastructure. And it is so frustrating to work
with the Federal Government. They are an unreliable Federal
partner. And I think that if we are going to realize the grid
transformation that is needed, we have to make fundamental
changes to our permitting process, to the way that we develop
and we deliver projects for grid reform or modernization, as
well as other types of infrastructure projects.
And so I think that has got to be a very important, really,
just a fundamental component of the recommendations we make
moving forward on how to ensure that the preconstruction
activities don't monopolize all of the funding all of the time
to where we never see ultimately the outcomes that all
Americans deserve.
Last thing, Madam Chair, I want to make reference to my
strong concerns about, I think, some of the confusing energy
policies that we are seeing pushed right now by this
administration. Madam Chair, I am just totally baffled. Months
ago, we saw President Biden being deemed a hero for shutting
down the Keystone Pipeline. Yet months later, we saw terrorist
and hacker labels applied to the folks that shut down the
Colonial Pipeline. How is it that the President can be a hero
for shutting down a pipeline, while others are considered
terrorists or hackers for shutting down a pipeline that had
profound impacts on the U.S. economy, on folks all across the
eastern seaboard?
The same administration just--after years of just trashing
the Trump administration and deeming them as being complicit in
Russian activities, then just lifted sanctions to allow the
Nord Stream pipeline to send Russian gas to our friends in
Europe that has a higher emissions profile.
I am really struggling with what appears to be the
hypocrisy here, and I think that we have got to step in and
make sure that we are making the right decisions for the global
environment, for our allies, and for a clean energy future that
is based on America's resources.
Thank you. I yield back.
Ms. Castor. I thank the ranking member.
And I think everyone shares the concern over the Nord
Stream pipeline. I know the Biden administration didn't change
its opposition to that pipeline. But I think it does highlight
the need for maybe a hearing in this committee on harmful
pollution from frack gas and other fossil development,
especially in the wake of the IEA's report this week that was a
surprise to everyone about--not a surprise about the surge we
needed in clean energy but that they recommend no new oil and
gas development, no new fossil development. So we will be
talking about that in the days ahead, I am certain.
Mr. Graves. Madam Chair, I would welcome that hearing. I
would love to do one on Nord Stream 2 and also on CCS activity.
So thank you. Count us in.
Ms. Castor. Without objection, members who wish to enter
opening statements into the record will have 5 business days to
do so.
Now I want to welcome our witnesses. We will hear from
leaders in the electric power industry on how investments to
modernize and expand transmission infrastructure can create
jobs, integrate more renewable energy, boost grid reliability,
and protect the public health.
Linda Apsey is the President and CEO of ITC Holdings Corp.,
which is the largest independent electricity transmission
company in the United States. Based in Michigan, the company
owns and operates high-voltage transmission infrastructure in
Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas, and
Oklahoma, with plans underway to expand in Wisconsin.
Donnie Colston is the Director of the Utility Department at
the International Brotherhood of Electrical Workers, IBEW. He
helps locals with collective bargaining agreements, working
conditions, safety-related work practices, and apprenticeship
training. A utility lineman, Mr. Colston started his career in
transmission and distribution construction before working as an
electric troubleman.
Emily Sanford Fisher is the General Counsel, Corporate
Secretary, and Senior Vice President for Clean Energy at the
Edison Electric Institute, which represents investor-owned
electric companies. Ms. Fisher manages EEI's litigation and
legal affairs, and she oversees and coordinates strategic clean
energy engagement across EEI and across the Federal Government.
And Michael Skelly is the Founder and President of Grid
United. He is a renewable energy entrepreneur and pioneer in
the U.S. wind industry, who currently leads an early-stage
transmission development company. Mr. Skelly was previously
Founder and President of Clean Line Energy, a company that
successfully permitted some of the longest transmission lines
in the United States over the last 50 years.
Without objection, the witnesses' written statements will
be made part of the record.
With that, Ms. Apsey, you are now recognized for 5 minutes
for your testimony. Welcome.
STATEMENTS OF MS. LINDA APSEY, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, ITC HOLDINGS CORP. ; MR. DONNIE COLSTON, DIRECTOR,
UTILITY DEPARTMENT, INTERNATIONAL BROTHERHOOD OF ELECTRICAL
WORKERS;
MS. EMILY SANFORD FISHER, GENERAL COUNSEL, CORPORATE SECRETARY
& SVP, CLEAN ENERGY, EDISON ELECTRIC INSTITUTE; AND MR. MICHAEL
SKELLY, FOUNDER AND CEO, GRID UNITED
STATEMENT OF LINDA APSEY
Ms. Apsey. Great. Good morning. And thank you, Chair
Castor, Ranking Member Graves, and distinguished members of the
Select Committee. I am Linda Apsey, President and Chief
Executive Officer of ITC Holdings Corp., the Nation's largest
independent electric transmission company. Thank you for
holding this hearing and for addressing the clean energy
economy and the future of the electric transmission grid.
Our Nation's high-voltage transmission system holds the key
to unlocking renewable energy potential in much the same way
the interstate highway system provided a roadmap to economic
prosperity in the middle of the 20th century. Like the
construction of the interstate highways, transformative
investments in the high-voltage grid will not simply just
happen. It will require visionary leadership from Federal and
state leaders, as well as cooperation among numerous
stakeholders and the Nation's electric utilities that oversee
the grid.
If we are successful, this transformation of the grid can
drive significant economic, environmental, reliability, and
resiliency benefits for this and future generations to come.
While recent years have seen some policy steps taken to
encourage transmission investment, more needs to be done to
address the three major hurdles to transmission development:
planning, cost allocation, and siting. I will first focus on
the significant benefits of transmission investment and then on
Federal policies that can help spur a reliable and affordable
low-carbon electric system.
Electric transmission infrastructure is a strategic asset
that can provide economic benefits and accelerate clean energy
adoption. Modernizing the electric grid presents a unique
opportunity to create hundreds of thousands of jobs. It also
can generate sustained, long-term, economywide benefits, while
helping to address decarbonization goals. The World Resource
Institute estimates that for every $1 invested in U.S.
transmission infrastructure, it creates approximately $2.40 in
economic benefits.
While transmission drives significant benefits, the
regulations and regional planning process we currently have are
insufficient to address the challenges we face. There is still
much to be done at the Federal agency level to fix these
processes and facilitate the necessary investment.
First, the Federal Energy Regulatory Commission can improve
planning processes by requiring regions to recognize and count
all of the benefits of the given transmission project. Today,
we only reflect whether the project is a reliability or
economic project in our planning studies. We would strongly
recommend that FERC also require planning studies to include
state clean energy standards and realistic estimates for
electrification growth.
In addition, new cost allocation policies are required to
provide for the expeditious integration of the significant
amount of renewable energy projects waiting to be connected to
the grid.
FERC should also repeal or modify unhelpful policies, like
Order 1000, that have slowed regional transmission development
and simply made it more complex. The introduction of so-called
competition is not competition. It is nothing more than a
regulated bureaucratic bidding process with little appreciable
benefit to the consumer.
With President Biden's goal of decarbonizing the U.S.
electricity sector by 2035, high-voltage transmission is taking
center stage. The proposal for an investment tax credit for
transmission could offer a valuable tool to stimulate large
regional transmission projects that would connect remote
renewable resources to our population centers. A well-designed
tax credit for transmission can lower costs for large projects
and make it easier to achieve cost allocation agreements, which
is a key hurdle to project approval and construction.
In short, we support the bipartisan goal of investing in
the Nation's high-voltage electric transmission grid. We are
prepared and stand ready to work with all stakeholders to meet
the climate challenge and build a 21st century energy economy.
I thank you for the opportunity to testify before this
committee, and I look forward to working together to invest in
America's clean energy future.
[The statement of Ms. Apsey follows:]
Statement of Linda Apsey, President and CEO
ITC Holdings Corp.
U.S. House of Representatives
Select Committee on the Climate Crisis
``Powering Up Clean Energy:
Investments to Modernize and Expand the Electric Grid''
May 20, 2021
Thank you, Chair Castor, Ranking Member Graves, and distinguished
members of the Select Committee, for inviting me to testify on the
critical topic of modernizing and expanding the electric grid.
I am Linda Apsey, Chief Executive Officer of ITC Holdings Corp.
(ITC). As the largest independent electricity transmission company in
the country, ITC owns and operates electric transmission assets in
Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma with
a combined peak load of 26,000 megawatts along 16,000 circuit miles of
transmission lines. Since we have no geographic constraints, ITC is
also focused on new areas where significant transmission system
improvements are needed. We are proud of our record of investing in the
grid to improve resilience, lower costs, and provide access to
affordable renewable resources for our customers.
Thank you for holding this hearing and for addressing the clean
energy economy and the future of the grid. The Select Committee Staff
Report and Action Plan offer a comprehensive menu of policy options
designed to spur investment in grid infrastructure and large-scale
renewable energy needed to decarbonize the electric system in an
efficient and affordable manner that also will enhance resiliency and
reliability. Many of these ideas are now carried forward in President
Biden's American Jobs plan.
While recent years have seen some policy steps taken to encourage
transmission investment, more needs to be done to address the three
major hurdles to transmission development--planning, permitting, and
cost allocation. I will first focus on the benefits of transmission
investment and then on federal policies that can spur a reliable and
affordable low-carbon electric system.
Transmission Investment Can Accelerate Clean Energy and Create Jobs
Our nation's high voltage transmission system holds the key to
unlocking the renewable energy future, in much the same way the
interstate highway system unlocked prosperity in the middle of the 20th
century. Like interstate highways, transformative investments in the
high voltage grid will not simply happen. Modernization and expansion
of our electric grid will require visionary leadership from federal and
state leaders, as well as cooperation among numerous stakeholders,
including the nation's electric utilities. If we are successful, this
transformation of the grid can drive significant economic and
environmental benefits for this generation and the next.
Since our inception, ITC has played a critical role in the
transformation of the generation fleet to cleaner and more sustainable
generation sources. While we have done much--having already connected
about 6800 megawatts of renewable capacity to the grid--much remains to
be done.
Consider a few of the trends contributing to our changing energy
landscape:
Consumers, governments, corporations and other
organizations pursuing sustainability goals are demanding clean energy.
Traditional baseload generating plants are being retired
at an unprecedented pace, as evidenced by this chart showing a
significant shift in generating capacity connected to ITC Midwest's
transmission system since 2007.
[GRAPHIC] [TIFF OMITTED] T4954A.001
To meet the demands of customers and policymakers, utilities and
renewable energy developers are adding wind and solar farms in Iowa and
across the upper Midwest. MISO, the regional grid operator, reports
more than 20 gigawatts of renewable energy--enough to power 14 million
homes--is proposed in Iowa, Minnesota and western Wisconsin.
The need for major new transmission investments to support the
future energy system will only grow. Our three largest customers
announced significant generation transformation plans for the years
ahead, and at least 30 utilities have made commitments to lower their
emissions by 80% or more. Investing in transmission now will allow this
transition to take place while maintaining affordability and enhancing
system resilience.
The need for significant new investment in transmission to support
clean energy and reduce emissions may sound daunting and expensive, but
it does not need to be. A recent study from Americans for a Clean
Energy Grid concludes that a ``transmission-first'' approach to clean
energy deployment will save customers money compared to current
electricity costs.\1\ Transmission-first means planning and building
transmission infrastructure and upgrading existing systems in areas
ripe for developing abundant and cheap wind and solar generation. By
contrast, the current practice of planning incremental additions to the
system for each new generation source imposes significantly higher
costs over the long run.
---------------------------------------------------------------------------
\1\ Consumer, Employment, and Environmental Benefits of Electricity
Transmission Expansion
---------------------------------------------------------------------------
in the Eastern U.S. https://cleanenergygrid.org/wp-content/uploads/
2020/10/Consumer-Employment-and-Environmental-Benefits-of-Transmission-
Expansion-in-the-Eastern-U.S..pdf
Returning to an earlier analogy, the interstate highway system was
proactively built on a vision of future access and need. If it had been
built the way transmission is today, based on incremental demand, we
would not have nationwide highway infrastructure and millions would be
denied access to its economic benefits. To unlock our energy future, we
need to begin work today on a transmission system that prioritizes
renewable resource development, anticipates growth, and expands access
to reliable, low-carbon electricity for all.
In addition, investments in transmission can create and support
thousands of jobs, both directly during construction and over the
lifetime of the investments. According to a recent report on
transmission benefits released by the WIRES Coalition and London
Economics, job creation and economic benefits achieved through
transmission development can be substantial and long-lasting.\2\
---------------------------------------------------------------------------
\2\ Repowering America: Transmission investment for economic
stimulus and climate change. https://wiresgroup.com/repowering-america-
transmission-investment-for-economic-stimulus-and-climate-change/
---------------------------------------------------------------------------
Transmission in Action: MISO Multi-Value Projects (MVPs)
There are many real-world examples of transmission development
leading to increased penetration of low-cost renewables. For instance,
ITC constructed major portions of MISO's Multi-Value Project portfolio
in the Upper Midwest that were approved in 2011. These 17 high-voltage
projects were designed to deliver renewable energy to load centers in
the Midwest to facilitate compliance with state renewable energy
standards and enhance grid reliability.
Retrospective analysis of these major projects confirms that they
have led to significant renewable development, enhanced reliability and
lower costs for customers. MISO affirmed the savings benefits from the
MVPs in its most recent Triennial Review, issued in 2017.\3\ That
review indicated that the MVP portfolio will generate benefits in the
range of $2.20 to $3.40 for each dollar spent. MISO estimates that the
average electricity customer in the region will see $33 in annual
benefits for a $12 per year investment in the entire MVP portfolio.
---------------------------------------------------------------------------
\3\ MTEP17 MVP Triennial Review.
---------------------------------------------------------------------------
https://cdn.misoenergy.org/
MTEP17%20MVP%20Triennial%20Review%20Report117065.pdf
The final MVP Project underway is Cardinal-Hickory Creek and it
will run from Dubuque, Iowa to Madison, Wisconsin. It will enable 42
generators in the upper Midwest to deliver 7,566 MW of low-cost,
reliable wind and solar power in the region. During construction and
installation, which will be done by union labor, the project will
generate approximately 2,500 jobs and $274 million in economic impacts
(GDP), according to the NREL's modeling. During operation, it will
result in 135 permanent jobs and $17 million in annual economic impact.
As customer demand for low-cost clean energy increases,
transmission lines like the Cardinal-Hickory Creek project will meet
the need by providing consumers with access to electricity generated in
renewable energy-rich areas of Iowa and Minnesota. With the right
policies in place, this model of transmission development can be
repeated in the Midwest and across the country.
Investments are Needed to Ensure Resilience and Grid Security
Reliability is always going to be an important issue for our nation
as electricity is a key driver for our growth, prosperity, safety and
security. This importance will only grow as electrification of the
economy proceeds apace.
The threats faced by the system are both natural and man-made. The
array and capabilities of hostile forces seeking to attack the U.S.
electric grid and destabilize the nation have increased in size and
sophistication over the past decade.
To date, ITC has invested approximately $9.8 billion in our 16,000
miles of transmission lines and about 670 substations to date.
Significant ongoing, long-term investment is still needed in grid
security to harden our systems against man-made and natural threats and
address aging infrastructure, reliability needs, NERC criteria, and
other infrastructure considerations.
Grid resilience means increasing our ability to anticipate,
withstand, recover and adapt to a wide variety of dynamic and material
risks to our electric systems.
ITC's systems serve Michigan, Iowa, Minnesota, Illinois, Missouri,
Kansas and Oklahoma, with a combined peak load exceeding 26,000
megawatts (MW). These areas frequently experience blizzards,
windstorms, flooding and other natural disasters. ITC has observed an
increase in the frequency and severity of these and other extreme
weather events, as well as their potential to disrupt the reliable
delivery of energy to customers.
The widespread power outages caused by last summer's devastating
derecho in Iowa--estimated by NOAA to cost more than $11 billion in
damages--and the recent extended sub-freezing temperatures across much
of the U.S., demonstrate the importance of a resilient and reliable
electric power grid. Extreme weather events of an intensity comparable
to the Midwest derecho in August 2020 can no longer be considered
``black swan'' or one-in-a-hundred-year events.
Consequently, continued investments in transmission are essential
to ensure older transmission lines are rebuilt to provide greater
system resiliency and reliability during extreme weather events. At
ITC, we are hardening our systems to provide greater redundancy to the
entire grid, and keep power flowing to consumers during storms.
Investments are Needed to Realize Electrification
Automakers, states and corporate players have declared ambitious
transportation electrification commitments--all with a focus on the
decarbonization of transportation. For example, General Motors
announced on January 28, 2021, that it plans to phase out gas and
electric vehicles and offer an all-electric lineup by 2035.
A study for WIRES conducted by the Brattle Group indicates the
investment in transmission in the U.S. must rise from $15 billion
annually today to as much as $40 billion per year between 2031 and 2050
to meet this electrification challenge.\4\ Other studies (Princeton,
E3, NREL) have indicated that the transmission system will need to
double or even triple in size if we are to electrify the economy.
---------------------------------------------------------------------------
\4\ The Coming Electrification of the North American Economy.
---------------------------------------------------------------------------
https://wiresgroup.com/the-coming-electrification-of-the-north-
american-economy/
Federal Policy and Transmission Investment
High-voltage transmission is essential both to meeting President
Biden's goal of decarbonizing the U.S. electricity sector by 2035 and
to reducing costs. A recent study from the University of California,
Berkeley and GridLab indicates that achieving a 90% clean-powered grid
by 2035 could deliver wholesale electricity costs 13% lower than today,
boosted by about $100 billion in transmission expansion investment.
Currently, many transmission projects are hampered by severely
backlogged interconnection queues, outdated planning processes, and
cost allocation debates that remain polarized. Lead times for large-
scale transmission projects spanning up to a decade or more are
unacceptable. Policymakers and stakeholders must act swiftly to address
the regulatory and policy bottlenecks that threaten America's path to a
cleaner energy future.
What is needed to meet the challenge? In short, we must address the
three major policy hurdles to transmission development--planning, cost
allocation, and permitting. First, as mentioned above, we need to plan
the system in a way that anticipates future needs and unlocks our
nation's abundant renewable resource potential. Second, we need to put
in place cost allocation policies that equitably spread costs to
beneficiaries of major projects, rather than placing all these costs on
each incremental generator. Finally, we must ensure that permitting and
siting processes are efficient and timely without undermining important
environmental protections.
As part of this framework for policy reform, President Biden's
proposal for an Investment Tax Credit for transmission offers a
valuable tool to help lower costs for large projects and make it easier
to achieve cost allocation agreements, which is a key hurdle to project
approval and construction.
Regulatory Improvements Are Also Essential
While Congress has many tools to address the policy roadblocks
mentioned above, the Federal Energy Regulatory Commission (FERC) will
continue to play a central role in moving towards a proactive and
broadly beneficial grid planning approach.
To create a policy environment for proactive investments in
transmission, FERC should:
Improve planning processes by requiring regions to
recognize and ``count'' all the benefits of a given transmission
project;
Require planning scenarios to include state and corporate
clean energy goals and realistic estimates for electrification growth;
Develop new cost allocation policies to equitably and
expeditiously integrate the significant amount of renewable energy
projects waiting to be connected to the grid;
Reform policies that make transmission development slower
and more complex, especially those processes imposed under the rubric
of ``competition'';
Conclusion
ITC supports the bipartisan goal of investing in the nation's
transmission grid. We stand ready to work with Congress, FERC and
others to ensure that we can seize this opportunity to improve the
nation's transmission system, encourage and realize the blessings of
abundant, affordable clean energy, as well as increase the resilience
of our energy system. By doing so, we can chart a pathway to a low-
carbon energy system with benefits that are broadly shared across the
economy. If we fail to act with urgency, the grid could become a
significant roadblock to climate progress.
Thank you again for the opportunity to testify before the
Committee. I look forward to working with Congress and the
Administration to invest in America's clean energy future.
Ms. Castor. Thank you, Ms. Apsey.
Next, Mr. Colston, you are recognized for 5 minutes.
STATEMENT OF DONNIE COLSTON
Mr. Colston. Thank you, Chair Castor, Ranking Member
Graves, and the members of the Select Committee. My name is
Donnie Colston. I am the Director of the International
Brotherhood of Electrical Workers Utility Department. On behalf
of our President, Lonnie Stephenson, thank you for inviting me
to testify on this importance of modernizing and expanding the
electric grid.
The IBEW is the largest energy union in the United States,
with 775,000 active members and with roughly 400,000 workers
employed in generation, transmission, distribution, and
construction.
It is said the North American electrical grid is the
largest machine ever built by human hands. The interconnecting
web of power plants, end users, and everything in between fuels
the $22 trillion U.S. economy. However, our current electric
distribution system, which was primarily built in the 1960s and
1970s, and functions on a regional or localized basis, needs
significant replacements and upgrades now and in the coming
years to maintain an enhanced system performance to deliver
new, cleaner sources of power generation from its source to
customers. The need to modernize and expand the electric grid
has become even more pressing due to climate change and the
need to reduce greenhouse emissions.
Any effort to markedly increase clean and renewable
generation onto the electric grid will require a significant
increase in the development of new transmission lines. At the
IBEW, we see the need to modernize and expand the electric grid
as a major work opportunity for our members. Reports released
this year by Americans for a Clean Energy Grid and American
Council on Renewable Energy found that building out electric
transmission to deliver new renewable and clean generation and
increase grid reliability would create between 240,000 to
600,000 direct jobs. The IBEW firmly believes our linemen are
the best trained and most experienced workers to fill this
anticipated need.
To provide one example, the IBEW is working with Avangrid
to build the New England Clean Energy Connect. The NECEC is a
$950 million investment that will deliver 1,200 megawatts of
renewable hydropower from Canada to the New England energy
grid. Once built, the project will employ around 600 IBEW
members and create an additional 800 indirect jobs during the
construction phase.
As a strong supporter of expanding and modernizing the
electric grid, the IBEW supports policies that will enhance
grid reliability and bring cleaner power generation to
consumers and provide steady work for our members.
Siting and permitting are two of the biggest barriers to
transmission construction. IBEW in general is supportive of
policy changes that will improve the permitting process and
ensure project applications are finalized in a reasonable,
expeditious manner.
IBEW members are interested in blue-collar quality jobs,
jobs that provide family-supporting wages with good benefits.
The IBEW supports policies that would ensure federally funded
construction and infrastructure projects meet the highest labor
standards, policies that include Davis-Bacon Act and prevailing
wage requirements and Buy American standards for key materials
and products.
Additionally, these labor standards need to extend to all
forms of Federal support, including tax credits, such as the
investment tax credit or the production tax credit. The IBEW
would also include tax credits to be paired, as called for in
the American Jobs Plan, with a fair choice to join a union and
bargain collectively.
With the Federal Government taking the decisionmaking lead,
market predictability will improve, as will the IBEW's ability
to plan for training the next generation of construction
linemen. It takes 3 years to train a journeyman lineman to
perform transmission line construction and maintenance, and we
anticipate the need for at least 50,000 new power linemen over
the next 10 years. While projects are held up, we are losing
valuable training time.
The IBEW asks for the Select Committee's leadership on
modernizing and expanding the electric grid, bringing new clean
energy generation to consumers, ensuring grid reliability are
goals of all Americans that can and should support. We remain a
ready partner with our employers and elected officials from
both sides of the aisle.
Thank you for the opportunity to participate in today's
hearing. I am happy to answer any questions you may have.
[The statement of Mr. Colston follows:]
Opening Statement of Donnie Colston
Director, Utility Department
International Brotherhood of Electrical Workers
Before the Select Committee on the Climate Crisis
U.S. House of Representatives
May 20, 2021
Chair Castor, Ranking Member Graves, and the members of the Select
Committee, my name is Donnie Colston. I am the Director of the
International Brotherhood of Electrical Workers (IBEW) Utility
Department. On behalf of our president, Lonnie Stephenson, thank you
for inviting me to testify on the importance of modernizing and
expanding the electric grid.
The IBEW is the largest energy union in the United States, with
775,000 active members and with roughly 400,000 workers employed in
generation, transmission, distribution, and construction all in some
way related to the electrical grid.
It is said that the North American electrical grid is the largest
machine ever built by human hands. The interconnecting web of power
plants, end users and everything in between fuels the $22 trillion U.S.
economy. However, our current electric distribution system, which was
primarily built in the 1960's and 70's and functions on a regional or
localized basis, needs significant replacements and upgrades now and in
the coming years to maintain and enhance system performance and deliver
new, cleaner sources of power generation from its source to customers.
The need to modernize and expand the electric grid has become even more
pressing due to climate change and the need to reduce greenhouse gas
emissions. Any effort to markedly increase clean and renewable
generation onto the electric grid will require a significant increase
in the development of new transmission lines.
At the IBEW, we see the need to modernize and expand the electric
grid as a major work opportunity for our members. A recent report by
the Americans for a Clean Energy Grid found that construction of 22
identified transmission projects would create 240,000 direct jobs.\1\ A
separate report by the American Council on Renewable Energy stated that
an investment tax credit for regionally significant transmission lines
would create 600,000 transmission jobs and at least 330,000
transmission jobs for ``projects weighted by odds of success.'' \2\
These jobs projections, if true, would be a boon for our members and
the communities that host these critical infrastructure investments.
---------------------------------------------------------------------------
\1\ Michael Goggin, Rob Gramlich, and Michael Skelly,
``Transmission Projects Ready to Go: Plugging into America's Untapped
Renewable Resources,'' (April 2021), https://
---------------------------------------------------------------------------
cleanenergygrid.org/wp-content/uploads/2019/04/Transmission-Projects-
Ready-to-Go-Final.pdf
---------------------------------------------------------------------------
\2\ Michael Goggin and Rob Gramlich, ``Investment Tax Credit for
Regionally Significant Electricity Transmission Lines,'' (May 2021),
https://acore.org/wp-content/uploads/2021/05/Investment-Tax-Credit-for-
Regionally-Significant-Electricity-Transmission-Lines-ACORE.pdf.
---------------------------------------------------------------------------
To provide one example, IBEW is working with Avangrid to build the
New England Clean Energy Connect (NECEC). The NECEC is a $950 million
investment that will deliver 1,200 megawatts of renewable hydropower
from Canada to the New England energy grid. Once built, the NECEC would
be New England's largest source of renewable energy and help lower
energy costs for consumers. The project will employ around 600 IBEW
members and create an additional 800 indirect jobs during the
construction phase. It is estimated that $440 million in worker
compensation will be provided during construction, a significant
injection of money for rural communities. The project will also provide
notable benefits to Maine residents, including an $18 million annual
increase in host community property tax revenues, $140 million in
consumer rate relief and $15 million for fiber optic and broadband
expansion for western Maine.\3\
---------------------------------------------------------------------------
\3\ New England Clean Energy Project,
---------------------------------------------------------------------------
https://www.necleanenergyconnect.org/project-benefits/#developBENEFITS.
A second transmission project IBEW members are ready to build is
the Cardinal-Hickory Creek Transmission Line Project that is being
developed by American Transmission Company, ITC Midwest and Dairyland
Power Cooperative. The project is one of 17 high-voltage transmission
lines that the Midcontinent Independent System Operator (MISO) approved
to improve the reliability and flexibility of the regional electric
grid. The 102-mile, 345-kilovolt line would connect renewable wind
generation in Iowa to consumers in Wisconsin and throughout the
Midwest. This project will employ over 100 IBEW members in northeast
Iowa and southern Wisconsin and, like the NECEC, is an important
investment in rural America.
As a strong supporter of expanding and modernizing the electric
grid, the IBEW supports several policy proposals we believe will
enhance grid reliability, bring cleaner power generation to consumers,
and provide steady work for our members. The IBEW supports many of the
proposals laid out in President Biden's American Jobs Plan. In
particular, our union supports the administration's call for a $100
billion investment in the nation's power infrastructure. This includes
the creation of an investment tax credit (ITC) for regionally
significant electrical transmission projects. As noted earlier, a
transmission ITC could be a important tool to incentivize the buildout
of power lines that would provide significant employment opportunities
for our members. However, we would call on policymakers to ensure that
a transmission ITC is broadly available and aimed at getting
transmission lines built.
The American Jobs Plan also calls for the creation of a new Grid
Deployment Authority that would allow for ``better leverage of existing
rights-of-way--along roads and railways--and supports creative
financing tools to spur additional high priority, high-voltage
transmission lines.'' \4\ Our union is supportive of the
administration's efforts to become more engaged in facilitating
transmission construction and use the federal government's authority to
cut through existing roadblocks to build power lines of regional and
national significance. Relatedly, the IBEW supports the Department of
Energy's recent announcement of two financing tools intended to
facilitate transmission line construction. These are the Western Area
Power Administration Transmission Infrastructure Program's $3.25
billion fund for transmission projects and making $5 billion available
for transmission projects through the Energy Department's Loan Programs
Office. We hope these two new funding opportunities will help overcome
one of the biggest hurdles to power line construction: cost allocation.
---------------------------------------------------------------------------
\4\ The American Jobs Plan, https://
---------------------------------------------------------------------------
www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-
sheet-the-american-jobs-plan.
Our union supports the use of existing rights-of-way to facilitate
the siting of transmission lines. Our members are familiar with the
difficulties surrounding the siting of power line and are generally
supportive of policies that will help overcome barriers to grid
modernization and expansion. However, transmission construction should
not be unduly impeded if an existing right-of-way is not available for
a proposed transmission project.
Siting and permitting are two of the biggest barriers to
transmission construction. The IBEW, in general, is supportive of
policy changes that will improve the permitting process and ensure
project applications are finalized in a reasonably expeditious manner.
There are recommendations from the Majority Staff's 2020 Report in this
area that would help facilitate the siting and permitting process.
These include the recommendation that Congress should amend the Federal
Power Act to clarify that the Federal Energy Regulatory Commission
(FERC) may exercise backstop siting authority for an interstate
electric transmission line. We are also supportive of the proposal to
authorize federal funding for the Department of Energy to provide
technical assistance for state, local and tribal authorities to conduct
transmission planning and review applications of proposed transmission
projects.\5\
---------------------------------------------------------------------------
\5\ House Select Committee on the Climate Crisis, ``Solving the
Climate Crisis,'' (June 2020),
---------------------------------------------------------------------------
https://climatecrisis.house.gov/sites/climatecrisis.house.gov/files/
Climate%20Crisis%20Action%20Plan.pdf.
The IBEW is not just interested in job numbers--our members are
interested in job quality. Many of our members join the IBEW due to our
union's longstanding record of securing family-supporting wages with
good benefits and a strong working relationship with our employers. For
these reasons, the IBEW supports the Select Committee's 2020 Majority
Staff Report recommendation to ``ensure federally funded construction
and infrastructure projects meet the highest labor standards.'' \6\ We
agree wholeheartedly with the Majority Staff Report that federal
spending should include standards such as extending Davis-Bacon Act
prevailing wage requirements and Buy America standards for key
materials and products. Additionally, these labor standards need to
extend to all forms of federal support, including tax credits such as
the ITC and production tax credit (PTC). The IBEW would also include
that tax credits be paired, as called for in the American Jobs Plan,
with a ``fair choice to join a union and bargain collectively.'' \7\
---------------------------------------------------------------------------
\6\ Ibid.
\7\ The American Jobs Plan, https://
---------------------------------------------------------------------------
www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-
sheet-the-american-jobs-plan.
With the federal government taking the decision-making lead, market
predictability will improve, as will the IBEW's ability to plan for
training the next generation of construction linemen. It takes three
years to train a journeyman lineman to perform transmission line
construction and maintenance, and we anticipate the need for at least
50,000 new power linemen over the next 10 years. While projects are
held up, we are losing valuable training time.
The IBEW asks for the Select Committee's leadership on modernizing
and expanding the electric grid. Bringing new, clean generation to
consumers and ensuring grid reliability are goals that all Americans
can and should support. We remain a ready partner with our employers
and elected officials from both sides of the aisle. Thank you for the
opportunity to participate in today's roundtable. I am happy to answer
any questions you may have.
Ms. Castor. Thank you very much.
Ms. Fisher, you are recognized for 5 minutes for your
testimony.
STATEMENT OF EMILY SANFORD FISHER
Ms. Fisher. Good morning, Chair Castor, Ranking Member
Graves, and members of the Select Committee. My name is Emily
Fisher, and I am here today on behalf of the Edison Electric
Institute. Thank you for the opportunity to speak about
modernizing and expanding the energy grid. I am honored to be
here with my fellow witnesses.
EEI is the association that represents all U.S. investor-
owned electric companies. Our members provide electricity for
more than 220 Americans and operate in all 50 States and the
District of Columbia. Collectively, the electric power industry
supports more than 7 million jobs in communities across the
country. Our members deliver the safe, reliable, affordable,
and clean energy that powers our economy and enhances the lives
of all Americans.
EEI member companies are leading a clean energy
transformation. Carbon emissions from the U.S. electric power
sector are at their lowest level in more than 40 years, and we
are 40 percent below 2005 levels as of year end 2020. At the
same time, 40 percent of the electricity that serves customers
now comes from clean, carbon-free resources, including nuclear
energy, hydropower, wind, and solar energy.
Our members are united in their commitment to get the
energy they provide as clean as they can, as fast as they can,
without compromising the reliability and affordability that our
customers value. To this end, EEI's members will continue to
reduce their emissions in future years with more than two dozen
members committing to reach zero or net-zero carbon emissions
by 2050 or faster. This cleaner electricity will play a key
role in reducing emissions economywide, particularly in the
transportation, industrial, and building sectors through
increased electrification.
Electric transmission infrastructure is the backbone of the
nation's energy grid and will be critical in facilitating the
continued transition to clean energy. Our industry is the
nation's most capital intensive, and since 2010, EEI's members
have invested more than $1 trillion to build smarter energy
infrastructure and to integrate more clean energy into the grid
affordably, reducing both emissions and costs.
The transmission system also helps optimize the energy
grid's performance, reducing congestion, enabling the
deployment of new technologies, and enhancing reliability and
resiliency.
The benefits of transmission are not in dispute, and there
is broad agreement that more transmission investment is needed
and is needed relatively quickly to meet clean energy
reliability and resilience goals. Despite this broad agreement
that we need more transmission, the pace of transmission
development is slow. Transmission projects typically take 7 to
10 years to plan, site, permit, construct, and energize. Yet we
have many examples of projects that have taken more than a
decade from conception to completion and just as many examples
of those proposed projects that were abandoned because progress
was too slow and too costly.
Litigation can be a significant factor in these delays, and
groups that support clean energy often oppose the
infrastructure necessary to integrate more of it.
Our member companies and our labor partners can help build
the transmission needed to meet and accelerate the achievement
of clean energy goals. Unfortunately, the way the nation plans,
permits, and pays for transmission are significant obstacles to
building the infrastructure we need quickly. Making changes
that align these processes with long-term clean energy goals
will not be easy, but it is essential. I offer some high-level
observations about what we may be able to do to deploy
transmission more quickly.
With respect to planning, current regional planning
processes are hindering, not helping, stakeholders identify
necessary projects and get them built. Existing planning
frameworks are too narrow in terms of scope and scale. Planning
should be oriented toward public policy goals and priorities
and should be able to take into consideration future
electrification scenarios.
Projects can and should serve multiple goals, from clean
energy integration and improved reliability, to increased cost
efficiency and increased resilience. It is also essential that
frameworks focus on getting all stakeholders, including states
and state economic regulators, on the same page with respect to
goals and benefits as early as possible to ensure that proposed
projects can move forward quickly once identified, both with
respect to permitting and cost allocation.
With respect to permitting, in order to build large-scale
transmission, a host of state and Federal approvals are needed.
For example, critical clean energy infrastructure frequently
requires Federal permits that trigger environmental reviews
under the National Environmental Policy Act. These can take a
really long time to complete and can be the focus of even more
protracted litigation. EEI supports a NEPA process that is
clear, transparent, and as efficient as possible, while meeting
all environmental requirements.
Perhaps one of the most contentious issues is how to pay
for necessary new transmission infrastructure. Current
processes focus on assigning costs to those customers who
benefit immediately and directly from the investment. This does
not take into consideration the broader benefits of
transmission for all customers.
To remove a critical obstacle to increased investment, it
may be necessary to broaden the scope of benefits and
beneficiaries considered, particularly as the transmission
system, the generation resource mix, and policy goals change
and are expected to change over time. As noted, getting all
stakeholders on the same page with respect to the need for and
the benefits of proposed transmission will be essential.
There are other ways to address the cost of transmission.
Grants and other cost-sharing mechanisms to help pay for
measures that will harden the energy grid and make it more
resilient in the face of wildfires, hurricanes, and other
natural disasters can help reduce cost pressures on customers,
particularly when many of our customers are still recovering
from the economic impacts of the pandemic.
Increased transmission investment is essential to meeting
our nation's and our industry's clean energy goals. Our members
are committed to investing in the energy grid and continuing to
make it smarter, cleaner, stronger, more dynamic, and more
secure. We look forward to working with this committee and
Congress to help achieve these goals.
Thank you again for this opportunity, and I look forward to
any questions you may have.
[The statement of Ms. Fisher follows:]
Statement by Emily Sanford Fisher
General Counsel, Corporate Secretary &
Senior Vice President, Clean Energy
Edison Electric Institute
Before the
House Select Committee on the Climate Crisis
May 20, 2021
Good morning Chair Castor, Ranking Member Graves, and members of
the Select Committee. My name is Emily Fisher, and I am here today on
behalf of the Edison Electric Institute (EEI). Thank you for the
opportunity to speak about modernizing and expanding the energy grid. I
am honored to be here with Linda Apsey, President and Chief Executive
Office of EEI member company, ITC Holdings, and with a representative
of our labor partners, Donnie Colston from the International
Brotherhood of Electrical Workers.
EEI is the association that represents all U.S. investor-owned
electric companies. Our members provide electricity for more than 220
million Americans and operate in all 50 states and the District of
Columbia. Collectively, the electric power industry supports more than
7 million jobs in communities across the country. EEI's member
companies deliver the safe, reliable, affordable, and clean energy that
powers our economy and enhances the lives of all Americans.
EEI's member companies are leading a clean energy transformation.
Thanks largely to the efforts of EEI's members, carbon emissions from
the U.S. electric power sector are at their lowest level in more than
40 years and were 40 percent below 2005 levels as of year-end 2020. At
the same time, 40 percent of the electricity that serves customers now
comes from clean, carbon-free resources, including nuclear energy,
hydropower, wind, and solar energy.
Along with significant reductions in carbon emissions and increases
in clean energy, America's electric companies have made equally
significant reductions in emissions of more localized air pollution,
which improves the health and well-being of the communities that our
member companies serve. Since 1990, our industry has cut sulfur dioxide
emissions by 95 percent and nitrogen oxides emissions by 88 percent. As
a result of the Mercury and Air Toxics Standards and other Clean Air
Act regulations, from 2010 to 2017, the power sector has reduced
mercury emissions by 86 percent and total emissions of hazardous air
pollutants by 96 percent. Nationally, total power sector mercury
emissions have been reduced by 95 percent over the period 1990 to 2020.
These trends in emissions reductions and the deployment of clean
energy will continue. EEI's member companies are united in their
commitment to get the energy they provide as clean as they can as fast
as they can, without compromising the reliability and affordability
that our customers value. To this end, EEI's members will continue to
reduce their emissions in future years, with more than two dozen
members committing to reach zero or net-zero carbon emissions by 2050
or earlier.
A wide range of factors are driving the clean energy
transformation, including declining costs for natural gas and renewable
energy resources, technological improvements, changing customer
expectations, federal and state regulations and policies, and the
increasing use of distributed energy resources. As a result, the mix of
resources used to generate electricity in the United States has changed
dramatically over the last decade. This cleaner electricity will play a
key role in reducing emissions economy-wide--particularly in the
transportation, industrial, and building sectors--through increased
electrification.
Transmission and the Clean Energy Transformation
Electric transmission infrastructure is the backbone of the
nation's energy grid and will be critical in facilitating the continued
transition to clean energy. Our industry is the nation's most capital-
intensive industry, and, since 2010, EEI's member companies have
invested more than $1 trillion to build smarter energy infrastructure
and to integrate more clean energy into the energy grid affordably,
reducing both emissions and costs. These significant investments ensure
that customers receive the electricity they need, when they need it,
safely and reliably. The transmission system also helps optimize the
energy grid's performance, reducing congestion, enabling the deployment
of new technologies, and enhancing reliability and resiliency.
In addition, transmission investments create jobs and provide a
range of other benefits. They offer communities access to lower-cost,
cleaner sources of electricity that often are located far from densely
populated urban centers.\1\ They support the economic viability of
clean energy projects by reducing costly curtailments of service due to
congested pathways and overproduction, which allows more clean energy
to reach more end-use customers.\2\ Electric transmission investments
also are essential to enabling greater transportation
electrification.\3\
---------------------------------------------------------------------------
\1\ See, e.g., American Council on Renewable Energy (ACORE), Macro
Grid Initiative, https://acore.org/macro-grid-initiative/
#1601561682191-976f8114-ec26.
\2\ See World Economic Forum, Why Transmission and Distribution Are
the Clean Energy Transition's Secret Weapons (Jul. 16, 2020), https://
www.weforum.org/agenda/2020/07/transmission-distribution-clean-energy-
transition/.
\3\ See Weiss et al., The Coming Electrification of the North
American Economy--Why We Need A Robust Transmission Grid, prepared for
WIRES (Mar. 6, 2019), https://wiresgroup.com/the-coming-
electrification-of-the-north-american-economy/.
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The benefits of transmission are not in dispute, and there is broad
agreement that more transmission investment is needed and is needed
relatively quickly when thinking about the timeline for building
critical infrastructure.
According to a study by Princeton University, to achieve a zero-
carbon future by 2050, the existing high-voltage transmission capacity
will need to expand by approximately 60 percent by 2030 and triple
compared to 2020 capacity through 2050 to connect more wind and solar
energy resources. Total capital investment in transmission will need to
reach $360 billion through 2030 and $2.4 trillion by 2050.\4\ The
Brattle Group, meanwhile, estimates that, to meet ambitious clean
energy goals and low-carbon solutions around the country, $300 to $700
in transmission investment is needed per each kilowatt (kW) of large-
scale renewable energy capacity added to the system.\5\
---------------------------------------------------------------------------
\4\ See E. Larson, C. Greig, J. Jenkins, E. Mayfield, A. Pascale,
C. Zhang, J. Drossman, R. Williams, S. Pacala, R. Socolow, EJ Baik, R.
Birdsey, R. Duke, R. Jones, B. Haley, E. Leslie, K. Paustian, and A.
Swan, Net-Zero America: Potential Pathways, Infrastructure, and
Impacts, interim report, Princeton University, Princeton, NJ, p. 106
(Dec. 15, 2020).
\5\ See Weiss et al., n. 1, supra.
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Obstacles to Needed Transmission Investments
Despite this broad agreement that we need more transmission this
decade to meet clean energy, reliability, and resilience goals, the
pace of transmission development is slow. Transmission projects
typically take 7 to 10 years to plan, site, permit, construct, and
energize--yet we have many examples of projects that have taken more
than a decade from conception to completion, and just as many examples
of proposed transmission projects that were abandoned because progress
was too slow and too costly. Litigation can be a significant factor in
these delays, too, and groups that support clean energy often oppose
the infrastructure necessary to integrate more of it.
EEI's member companies and our labor partners can help build the
transmission needed to meet and accelerate the achievement of clean
energy goals. Unfortunately, the way the nation plans, permits, and
pays for transmission are significant obstacles to building the
infrastructure we need quickly. Making changes that align these
processes with long-term clean energy goals will not be easy but is
essential. Local communities, states, Tribes, and the federal
government all have a role, and many stakeholders' views and
perspectives must be considered. Today, I offer some high-level
observations about what the federal government may be able to do to
help deploy more transmission more quickly.
Planning
Current regional planning processes are hindering, not helping,
stakeholders identify necessary projects and get them built. Existing
planning frameworks are too narrow in terms of scope and scale.
Planning should be oriented toward policy goals and priorities.
Planning also should be able to take into consideration longer-term
clean energy goals at the state and federal levels, as well as future
electrification scenarios, and should take a broader approach to costs
and benefits. Transmission projects can and should serve multiple
goals, from clean energy integration and improved reliability to
increased cost-efficiency and increased resilience.
It also is essential that planning frameworks focus on getting all
stakeholders, including states and state economic regulators, on the
same page with respect to goals and benefits as early as possible in
the process to ensure that proposed projects can move forward quickly
once identified, both with respect to permitting and cost allocation.
This will be especially important in the context of inter-regional
planning.
In general, planning frameworks should take a more holistic
approach to assessing the need for, and benefits of, transmission. They
also should be flexible enough to take into consideration regionally
important issues, such as wildfire mitigation or offshore wind
interconnection. While the Federal Energy Regulatory Commission (FERC)
has indicated that it intends to revisit planning frameworks and
requirements, congressional direction may be essential in reorienting
the planning process in a timely way.
In addition, the Department of Energy, in coordination with the
National Labs, could be directed to provide some assistance by
conducting a nationwide analysis to identify the areas with the most
potential and need for transmission projects to address clean energy
and system resilience needs.
Permitting
In order to build large-scale transmission, a host of state and
federal approvals are needed to site and permit projects. The federal
government can take several steps to reduce the time it takes to
receive these permits, consistent with environmental obligations and
requirements.
For example, critical clean energy infrastructure projects
frequently require federal permits that trigger environmental reviews
under the National Environmental Policy Act (NEPA), which can take
years to complete and increasingly have become the focus of even more
protracted litigation. This significantly adds to the time and costs of
critical transmission projects necessary to meet these clean energy
objectives. EEI supports a NEPA process that is clear, transparent, and
as efficient as possible while meeting all environmental requirements.
To that end, there are four process revisions that can contribute
to an efficient, environmentally sound, and defensible NEPA review:
1. Tiering: Utilizing ``tiering''--considering existing studies
and environmental analyses in the NEPA process--allows federal agencies
to build upon these previously conducted environmental studies, as well
as decisions made during earlier state or local public reviews, instead
of starting from scratch.
2. Categorical Exclusions (CE): Agencies may now apply a CE
established under another agency's NEPA procedures, if the action
covered by that CE and the adopting agency's proposed action are
substantially the same. This sensible step reduces duplication and
should be allowed to continue.
3. Greenhouse Gas (GHG) Emissions Analysis: GHG emissions are
relevant to NEPA analyses, and considering such emissions is
appropriate in the context of environmental reviews designed to ensure
well-informed decision-making. Agencies should consider existing
emissions estimates when relevant, including sector-wide estimates,
when assessing GHG emissions impacts. For example, transmission
projects that displace emissions by enabling more clean energy
integration should be recognized as such, even if that requires a
broader assessment of emissions impacts.
4. Applicant Engagement in the NEPA Process: Allowing permit
applicants and their contractors to participate in the preparation of
documents for environmental reviews promotes efficiency by utilizing
those in the best position to provide critical information about
proposed projects to regulators. Applicants and contractors have ready-
made information regarding project alternatives and potential effects,
and they possess significant environmental and technical resources and
engineering information that could enable more efficient and timely
preparation and evaluation of environmental reviews.
Another option to help expedite siting and permitting for some
transmission projects includes incentives to use existing rights-of-
way, including those for transportation.
Transmission permitting and siting is complex. These suggestions
would not solve all delays if implemented, but they could help expedite
the process.
Paying
Perhaps one of the most contentious issues is how to pay for
necessary new transmission infrastructure. Current processes focus on
assigning costs to those customers who benefit from the investment, but
some states that serve as conduits for new transmission often are
concerned about whether they will see benefits from these projects.
This process does not take into consider the broader benefits of
transmissions for all customers.
To remove a critical obstacle to increased investment, it may be
necessary to broaden the scope of benefits and beneficiaries
considered, particularly as the transmission system, the generating
resource mix, and policy goals change and are expected to change over
time. As noted, getting all stakeholders on the same page with respect
to the need for--and benefits of--proposed transmission projects during
the planning phase will be critical in determining how to allocate
costs fairly.
There are other ways to address the costs of transmission. Grants
to help pay for measures that will harden the energy grid and make it
more resilient in the face of wildfires, hurricanes, and other natural
disasters can help to reduce cost pressures on customers, particularly
when many customers are still recovering from the economic impacts of
the COVID-19 pandemic.
EEI's member companies take their commitment to providing reliable
and resilient electricity seriously and are investing billions to
harden the grid--they are installing concrete poles, moving substations
to higher ground, putting technology on the grid that can sense fire
and shut off a power line, and more. Federal dollars could help
accelerate these adaptation investments. In addition, some federal
funds can support ongoing efforts to modernize the energy grid to use
the latest technologies and to improve two-way communication on the
system with everything from smart meters to appliances to private solar
and storage systems.
Conclusion
Increased transmission investment is essential to meeting our
nation's and our industry's clean energy goals. A robust transmission
system also enables electric companies to deliver energy where it is
needed, to integrate more clean energy into the energy grid, to enhance
the reliability and resiliency of the grid, and to lower the cost of
delivering energy by reducing congestion. EEI's member companies are
committed to investing in the energy grid and to continuing to make it
smarter, cleaner, stronger, more dynamic, and more secure. We look
forward to working with this Committee and Congress to help achieve
these goals.
Thank you again for the opportunity to testify. I look forward to
any questions you may have.
Ms. Castor. Thank you very much.
Mr. Skelly, you are recognized for 5 minutes. Welcome.
STATEMENT OF MICHAEL SKELLY
Mr. Skelly. Thank you.
My name is Michael Skelly, and I am the founder and CEO of
Grid United, and we are an early-stage transmission development
company based right here in Houston, Texas, which, as many of
you know, is emerging as a leader in energy transition. And I
have been involved over the last 25 years in many wind
generation and solar generation projects, as well as lots of
transmission lines, including some that, as Ms. Fisher pointed
out, are now in construction and others that got killed off
because of too many delays and too many obstacles to get them
done.
I thought I would focus a little bit on what has happened
in the last 10 years and the opportunity set that is before us.
And the first thing I would like to talk about is the
exciting companies that have emerged over the last decade that
use situational awareness diagnostics and ultrafast processing
power to get better use out of the existing grid. And these
technologies commonly known as grid enhancing technologies have
emerged. A number of companies have emerged based here in the
U.S. that will help us get better--basically, move more power
through the existing grid, and that is something that we can do
and that Congress can act on in the near future using existing
authorities. So I would encourage you all to focus on that.
Next up, I co-authored the study that a number of folks
have referred to that identified 22 shovel-ready, high-voltage
transmission projects around the country being developed by
folks like ITC, Ms. Fisher's member companies, and a number of
independent developers of transmission lines. And over the last
decade, these companies have slogged through the processes
that, as we all know, take a very, very long time, and they are
ready to go. And the criteria that we use to identify these
projects was, okay, what can we get underway in the next 24 to
36 months? And I am happy to talk in detail about any of those
projects or the processes they are going through.
But what we need is some successes, and as we all know,
success begets success in many walks of life, including
infrastructure development. And this opportunity set that is
before us now, with a little bit of a push from things like the
investment tax credit, we can get these projects done. They
will unlock tens of thousands of megawatts of new generation
projects, put lots of IBEW members to work, and boost today's
level of renewable energy penetration to even higher levels,
and help address some of the reliability issues that we have
become painfully aware of, particularly in places like here in
Texas.
And while the--the other point that I would like to sort of
highlight again is that the--Ms. Apsey pointed out some of the
problems with the current transmission planning process. I
won't reiterate those, but suffice it to say that we need
planning processes that take into account all of the benefits
that we get from transmission, and we need to think in a much
broader fashion about the public policy goals that the
transmission investments can help us achieve.
We have largely solved the problem over the last 30 years
with continued investments in R&D and scaled up deployment of
renewables, and we now know how to produce wind power and solar
power incredibly inexpensively. We have solved that challenge.
The big challenge ahead of us now is building the grid so that
everybody in the country can get access to those cheap
resources. And as we build out the grid, we will do what we
have done here in Texas when we did a big transmission expanse
in the mid-2000s, we will help drive economic development, come
up with a cleaner energy mix, and bring down costs to consumer.
So thank you very much, and look forward to your questions.
[The statement of Mr. Skelly follows:]
Statement by Michael Skelly
Founder and CEO
Grid United, LLC
Before the House Select Committee on the Climate Crisis
May 20, 2021
Good morning Chair Castor, Ranking Member Graves, and members of
the Select Committee, and thank you for the opportunity to testify
before you today.
My name is Michael Skelly and I am founder and CEO of Grid United,
an early stage transmission development company. I have spent the last
25 years developing a wide variety of energy projects. I got involved
in the US wind industry in the late 90's, and helped put together
thousands of megawatts of new wind projects. In 2009 I started a
company called Clean Line Energy which focused on interstate power
lines to move renewable energy around the country. We successfully
permitted a three-state high voltage, direct current transmission line.
We sold off our projects several years ago to other developers who are
carrying them forward. Indeed, our Western Spirit project is now under
construction in New Mexico.
I live in Houston, Texas, which is fast becoming a national center
for renewable energy development. The combination of an entrepreneurial
ethos, abundant wind and solar in Texas' wide open spaces, an open
access grid, and policy innovation that began with then Governor George
Bush and continued with Governor Rick Perry's push to expand Texas'
transmission system, has made Texas a leader in wind and solar, and we
are now witnessing an explosion in energy storage installations.
The recent outages of winter storm Uri are not the subject of
today's hearing, but must be mentioned. As we all know, for four days
in February, 4.5 million Texans became harshly aware of the grid and
its critical importance to everything we do. Importantly, Texas' high
voltage grid itself held up quite well and few outages were attributed
to transmission problems, but generators, including gas, nuclear, coal
and wind generators all had problems. No generation source covered
itself in glory. One key lesson from the Texas experience is that the
transmission investments initiated by Governor Perry made a bad
situation less awful. Another key lesson is that networked systems
perform better than isolated systems. Personally, while I believe
Texas' electrical independence serves the state well and has enabled us
to build more generation quickly, we would be well served by more
asynchronous DC ties to neighboring states. Those interregional
transmission ties would allow Texas to export its energy bounty in
times of surplus, help our neighbors when their supplies are tight, and
enhance our reliability by importing when we need it. All regions need
to perform scenario planning for extreme weather, and if they do, they
will all find significant benefit to such interregional ties. Anything
Congress can do that simultaneously recognizes Texas' independent
streak while facilitating connections to adjacent control areas will
serve us all well.
In April of this year, I co-authored a study identifying 22 shovel-
ready high voltage transmission projects around the country that would
begin construction in the near term if more workable transmission
policies, like the tax credit, were enacted. These projects would
create over 1.2 million jobs across the transmission, wind, and solar
sectors; interconnect 60,000 MW of new renewable capacity; and increase
America's solar and wind generation by 50% from current levels. A
decade ago, we as a country did not have such a fantastic opportunity
set in front of us. However, in the ensuing years, both utilities and
independent developers have been sorting through the nettlesome siting,
permitting, cost allocation and grid connection challenges. I am firmly
convinced that success will beget success in transmission, and pushing
these 22 projects over the top will invigorate efforts across the
country--resulting in more jobs, enhanced domestic supply chains, and
big construction jobs, especially in our hard hit rural areas.
Aside from the economic benefits these projects embody, they also
represent improved health outcomes for residents of population centers
living near fossil-burning power plants. Transmission plays a role in
replacing the carbon and other pollution in these population centers
with renewable sources of energy, thereby improving air quality for
residents, and addressing long-standing environmental injustices.
Before I talk about policy mechanisms that can help us improve
reliability and get more clean energy on the grid, I'd like to first
address the critical importance of getting as much bang for the buck
for the investments we have made in the existing grid. Over the last
decade, a number of exciting companies, in some cases with public R&D
support, have developed ``Grid Enhancing Technologies''. These
companies harness the power of situational awareness and ultrafast
processing of information to adjust the throughput of existing wires,
allowing them to get more power to market more efficiently. A number of
these technologies were not mature a decade ago, but now they are, and
most of the promising companies in this space are based here in the
United States.
Forward thinking utilities like Xcel, MidAmerican and National Grid
are deploying them already. FERC Chair Richard Glick and his
predecessor have taken an active interest in encouraging utilities and
system operators to adopt these technologies. Congress could play a
critical role by appropriating funds to share in the cost of their
deployment--an approach that will save customers money, enable more
renewable power, and enhance reliability.
But better use of the existing grid alone won't do the job alone.
We have largely solved the problem of producing wind and solar
electricity in a cost effective fashion. Now we need a better grid to
pull it all together.
The Investment Tax Credit for Regionally Significant Electricity
Transmission Lines, would be an essential tool in developing American
grid infrastructure. The proposed 30% tax credit would unlock new
merchant transmission lines as well as rate regulated ones, ultimately
unlocking investment and reducing costs to consumers.
As Congress considers an investment tax credit for transmission
lines, it's perhaps helpful to dive into the mechanics of how
transmission lines get paid for today and why we aren't getting all the
grid we need to combat climate change. In this context, one must look
at the two business models that support the financing and construction
of new transmission lines.
The great majority of transmission projects built in the US come
about as a result of regional grid planning exercises. System operators
project growth in demand, make assumptions about plant retirements, and
project what new projects might get built. Individual transmission
lines or groups of lines are looked at on a ``benefit to cost'' ratio.
If new lines will benefit the system, say on a 1.5 to 1.0 benefit to
cost test, the system operators, working with state regulators, see to
it that the lines get built. If the projects don't pass that test, they
don't get built. The rub lies in the fact that in almost all cases in
the US, carbon externalities are not factored into the grid planning
process. Sometimes carbon is included in scenario planning, but rarely
is carbon used in the benefit to cost tests. Not surprisingly, this
means that we are not planning the grid around a carbon constrained
world. While not a perfect policy tool, an Investment Tax Credit can
make up for this deficiency in the planning process. The ITC would have
the effect of lowering the denominator in the benefit to cost test.
More lines would make it through the planning process, and we will end
up with a lower carbon grid.
The other type of transmission lines that get built are called
``merchant'' lines. These are typically built outside the conventional
planning process, and their economics rely on generators paying the
developers of merchant lines to deliver their power across long
distances to get to market. An ITC will help reduce the cost of the
transmission service, and therefore more lines would get built, and
more renewable energy projects will follow. Importantly, merchant lines
often provide reliability and other services to the grid for which they
do not get paid--despite the fact that such services can be extremely
valuable. An ITC will help make up for this market failure.
In both the merchant and regionally planned approach, the ITC is
passed through to consumers.
While the tax credit is beneficial to unlocking these shovel-ready
projects, the timeline for new interregional transmission can take a
decade to complete. The Federal Energy Regulatory Commission has the
authority to break the planning and cost allocation logjams that are
preventing high voltage interregional projects from being built. Among
other reforms, the Commission should consider directing regional
planning authorities to evaluate future system needs based on a range
of plausible scenarios, including high renewable penetration; link the
interconnection and transmission planning processes; and consider non-
transmission alternatives to costly local replacement projects that
don't move the needle on bulk power flows. Research has shown
incorporating non-transmission such as Grid Enhancing Technologies can
yield significant returns and unlock previously untapped capacity,
efficiency, and resilience.
High voltage transmission lines are the ties that bind regional
grids and build resiliency. With renewed effort, we can enhance and
modernize grid infrastructure, create the jobs of tomorrow, improve
health outcomes for the most vulnerable, and reduce the costs of
running one of the world's most complicated technological wonders. We
should take the forewarnings of recent regional grid failures as a
national call to action to rebuild our infrastructure along an
interregional framework with the tools, technology, and policy delivery
mechanisms we have at our disposal today.
Thank you for the opportunity to testify, and am happy to answer
any questions you may have.
Ms. Castor. Well, thank you very much.
I want to thank all of our witnesses for their very
insightful testimony. And I will recognize myself for 5 minutes
for questions.
You know, a reliable electric grid powers everything we do.
And I think it is clear that we have a consensus here that
investments in transmission would benefit consumers across the
country. We have to fix some of the flaws too that were
highlighted by the catastrophe, fatal catastrophe, in Texas and
others. So this piece of an infrastructure plan focused on
electric transmission is just going to be critical, and I think
there is common ground here.
So, Ms. Apsey, you have now watched a growing consensus
here in Congress. President Biden has put forth his American
Jobs Plan. Here in the House, we are probably ahead of the
Senate with LIFT America and CLEAN Future. When you look at the
pieces of legislation that are on the table right now to be
considered as we hammer out an infrastructure plan, what is
most important, and do you see anything--any pieces that are
missing?
Ms. Apsey. Great. Thank you, Chair Castor, for that
question.
Yeah, absolutely there are, you know, I would say,
multiple, you know, I think indications both from the
administration, in different bills, the investment tax credits.
You know, I think for us, and given our business and our
experience, you know, anything that I think can help drive and
facilitate the regional planning process--because really what
we need is, you know, utilities make significant investments
every day to maintain the reliability of their grid. But when
it comes to planning, you know, across multiple transmission
owners, across multiple states, across multiple regions, we
don't necessarily have the processes that facilitate that. We
have had some positive momentum about a year--about 10 years
ago, with the Midwest Regional Transmission Organization, with
their MVP portfolio of projects, but since that time, we really
have not seen any other meaningful regional transmission.
So legislation or efforts that can advance--and I think
both Emily and Mr. Skelly spoke to this--where we can include,
you know, the multiple benefits that transmission provides,
transmission integrates and provides access to renewable
energy. It also continues to provide access to existing
generation assets. It provides resiliency. It provides
reliability. It provides economic benefits. And all of these
benefits have to be included as we do our studies.
And if we can do that, what will occur is that the benefits
will speak for themselves and that then we can move forward to
actually realize these transmission projects, rather than them
being stuck in sort of what we call the planning do-loop of the
scenarios and the assumptions.
And so there are--there are specific provisions that do
advance regional planning, and we would strongly suggest that
we continue to put our shoulder behind those. I think the
investment tax credit is an important tool in our toolbox to
continue to realize meaningful investment in regional and
interregional transmission infrastructure.
Ms. Castor. Thank you.
Yeah, and I am glad you mentioned that, because I am
working on legislation in the Energy and Commerce Committee to
address the expansion of the transmission system, the
preplanning, the incentives for states to do that planning.
Secretary Granholm yesterday in a hearing highlighted existing
rights-of-way. So we have got to get down to brass tacks now in
those details.
So, Ms. Fisher, I know you care about this and you are--all
the utilities do as well. One of the key pieces to moving to
clean energy and expanded grid is going to be a clean energy
standard and an energy efficiency standard. States are
different, though, across the country, and we want to make sure
at the Federal level we have the incentives working correctly.
I mean, many utilities have been focused for decades on selling
as much power as possible, but we have to have the incentives
for energy efficiency and conservation.
So what is the--what do we need to be doing, from your
point of view, on a clean energy standard and an energy
efficiency standard?
Ms. Fisher. Thank you so much for the question, Chair. As a
sort of preliminary matter, actually our members have been
delivering energy efficiency solutions to our customers for a
really long time and have been partners with our state
regulators to find ways to help our customers use less energy
and control their energy costs. I think we are kind of unique
in that we are the only people that actively help people use
less of our product. And we have saved, you know, terabytes,
trillions and trillions of megawatt hours of electricity over
the last decades on energy efficiency.
So we definitely agree that one of the first tools for
managing emissions is efficiency, and we look forward to
continuing to partner with our customers and our state
regulators on those processes.
Ms. Castor. Well, I have run out of time. So hopefully you
can address the clean energy standard down the road. Thank you.
Next, I will recognize Ranking Member Graves for 5 minutes.
Mr. Graves. Thank you, Madam Chair. I appreciate all the
witnesses' testimony.
Ms. Apsey, I want to ask a question. We have talked about
some pretty substantial investments required to kind of
modernize the grid. Do you see sufficient capital just in your
work in the states--I believe in the Midwest--where you have
been operating? Do you see sufficient capital that is available
and being invested in transmission?
Ms. Apsey. Absolutely. Thank you for that question. Yeah,
absolutely. I would not say that the issue or concern with
investment in transmission is access to capital. I think what
the issue and concern is more in terms of, obviously, the
amount of time it takes to plan, to receive the necessary
approvals. And, obviously, you know, these are major, major
large transmission projects that take time in and of themselves
to construct.
And so from an investor perspective, you know, investors
want clarity. They want stability and policies, right, as they
consider making those investments into businesses like ours or
any other utility. Investors need stability.
Certainly, you know, we--you know, we--you know, for us,
access to capital is not the concern. It is more the inherent
processes and the amount of time it takes to realize that
investment in transmissions.
Mr. Graves. Thank you.
Could you talk about perhaps--and I know you have had all
sorts of experiences, but maybe talk about an experience where
you had especially bad memories in terms of trying to move
forward on a transmission project, perhaps, where you ran into
regulatory obstacles or got stuck in the do-loop?
Ms. Apsey. Sure. Well, thankfully, I would say the good
news is, you know, because to date most of our investments in
transmission have been sort of, I would say, within our own
footprints, our own geography, our own control, and we worked
very well through our RTOs, our stakeholder processes, our
communities, in order to, you know, site and permit those
facilities.
You know, one project I would identify, it was first
identified through this MISO RTO, you know, portfolio of
projects, and that is our Cardinal-Hickory Creek Project. So it
has been in the planning process and the execution phase for
over 10 years now and, you know, we have spent considerable
time, considerable years, going through the necessary, you
know, environmental reviews, environmental processes, working
with all the various stakeholders. And, you know, while we
continue to move forward with that project, there is pending
litigation.
And so, obviously, from a risk perspective, a certainty
perspective, obviously, those types of things just can serve to
delay the ultimate realization of the benefits that that type
of project would bring.
Mr. Graves. Ms. Apsey, is it fair to say that in many cases
that some of these process obstacles are preventing the
deployment or transmission of clean energy in some cases?
Ms. Apsey. Yeah. Well, certainly, that is one hurdle, one
obstacle, as I mentioned. You know, there is multiple hurdles
in realizing transmission investment, you know, planning----
Mr. Graves. OK. Let me--thank you very much.
And I just I want to make reference. We have introduced
legislation called the BUILDER Act that tries to reform at
least part of this process, and certainly would appreciate any
feedback that you or your folks would have based on some of the
experiences that you had in trying to build transmission.
I want to say this again. I said it in the opening. I do
think that the Chair and I, and I think everybody on the
committee, shares concerns about the--this regulatory process
and how we ensure that it is scaled or tailored in a way that
allows us to actually realize the benefits of a modernized grid
and some of the new energy sources that will be transmitted.
Ms. Fisher--and I apologize. I think I made reference to
your either middle or maiden name--sorry about that--when I
referenced your testimony earlier. But just want to ask you if
you have any thoughts or feedback on some of the regulatory
reforms that perhaps would be needed, keeping in mind the
tripling, perhaps, of the capacity that you have noted in your
testimony?
Ms. Fisher. Thank you for the question, Ranking Member
Graves. And you made my dad really happy by mentioning my
maiden name, so thank you.
You know, we have engaged with both this administration and
the prior administration on efficient NEPA reviews in
particular, and there are ways to make those processes be a
little bit more efficient, take less time, but still be totally
faithful to the environmental goals and purposes of that
statute. You know, it is an information-gathering statute, not
an outcome-determinative statute, and there are some basic
process improvements that I included in my testimony, my
written testimony.
But, for example, one of the things that we think would be
truly important is being able to use the same Record of
Decision that one agency developed if another agency also has a
permitting authority. That seems like an important way to avoid
duplication. That--you know, we also think that the project
proponents, like Ms. Apsey, should have a role in being able to
provide relevant information to the agency that is conducting
the review. They are closest to the projects and they have the
most information.
One really important change for us actually would be a more
holistic approach to greenhouse gas emissions so we could
actually recognize the greenhouse gas benefits that these
projects provide. We are often not allowed to do that and not
to contextualize these projects appropriately.
Ms. Castor. Thank you very much.
Mr. Graves. Thank you. Appreciate it.
Ms. Castor. Next, we will go to Rep. Brownley.
Ms. Brownley. Thank you, Madam Chair. And thank you all for
being here this morning.
Ms. Apsey, my first question is, it is my understanding
that the House E&C Committee has proposed a new program for the
Department of Energy that would provide Federal assistance and
technical assistance to state, local, and Tribal authorities to
help them better participate in this process. Do you think such
a program would help in terms of, you know, the overall
acceleration of the, you know, 10-plus-year timeline it takes
to--that we often see with transmission development?
Ms. Apsey. While I don't have any specific knowledge or
information on what you are specifically referring to, you
know, stakeholder processes are important. All of our business
operations we participate through regional transmission
organizations which have stakeholder processes. We then are
further involved in stakeholder processes through any of the
siting--state siting processes or Federal siting processes.
So my recommendation would certainly be that--and perhaps
to Ms. Fisher's point--I think anything that we can do to drive
more collaboration and coordination, you know, sort of under,
if you will, one umbrella, I think would be most important and
most valuable so that we don't add additional time to the
process. We already go through multiple levels of stakeholder
interaction, stakeholder collaboration, and certainly every
voice is important in that process.
Ms. Brownley. Thanks. And you also mentioned, you know, the
investment tax credit being an important tool in the toolbox.
And, you know, there have been many who have estimated that if
we did the investment tax credit correctly, that could yield 20
to 30 gigawatts of additional capacity to the grid. Do you
think that is the proper yield strictly through an ITC or does
that mean--do we have to do the ITC with modifications to
regulations wrapped around it?
Ms. Apsey. I would strongly suggest that we need both. I
think we need an all-in approach. I don't think there is a
silver bullet. Transmission is incredibly complex. It takes a
very long time to plan and to receive the necessary approvals
and then ultimately construction.
We have processes in place today that have worked and that
have yielded significant benefits for consumers. So I don't
think--I don't think we are looking to make a wholesale shift
in how we pay or incentivize transmission. I think we have got
a lot of existing processes that do work, but I certainly think
we do need additional tools in the toolbox, as well as some
regulatory reforms.
Ms. Brownley. Thank you.
And I have got a little bit more time.
Mr. Skelly, you have mentioned your, you know, siting of
many shovel-ready projects. And would an ITC, you know, get
those moving quickly? And what kind of yield would that bring
in terms of expansion to the grid?
Mr. Skelly. Yeah, I do think it would be very helpful for
two reasons. There is two types of transmission lines. One that
are cost allocated that come out of the planning process. And
because our current processes don't take into account growth
and things like electrification and don't take into account
carbon emissions, that failure to account for them means that
they don't make it through the planning hurdles. Okay? And ITC,
by bringing down the cost, would get more projects through the
planning process and we get more built.
On merchant lines, i.e., developed by independent
developers, you basically get paid to move power and--but you
also provide reliability and ancillary services benefits to the
grid, which you often don't get paid for as an independent. And
an ITC, while an imperfect mechanism, okay, provides some sort
of rough justice and helps get these merchant projects done,
and in a sort of roundabout way compensates them for the
benefits that they provide to the grid.
Ms. Brownley. And, you know, I don't have much time. So I
will yield back, Madam Chair.
Ms. Castor. Thank you, Rep. Brownley.
Rep. Palmer, you are recognized for 5 minutes.
Mr. Palmer. Thank you, Madam Chairman.
First of all, I want to address the issue of the cost of
this and the reliability of it. There was an audit of the
German electrical grid. You know, they have done away with coal
and nuclear and they have tried to go to renewables, and this
audit found that electricity prices, residential electricity
prices in Germany are 43 percent higher than the average for
the other EU countries, and their electricity prices were
already high. According to the report, it caused chaos to
producers and consumers and threatened the German economy. So I
find it interesting that my colleagues across the aisle keep
saying that this is going to be cheaper than the way we produce
electricity right now.
So, Mr. Skelly, I just, because our--I know we are talking
about a complete replacement of the grid, but even that will
still require a consistent baseload. How do you expect to
achieve that without some backup?
Mr. Skelly. Okay. So we have a few big advantages over the
Germans. We have much better wind and much better solar
resources, and because of that, that makes our costs
dramatically lower.
In terms of reliability, one thing that we know about
network systems is network systems--and we saw this with
Colonial Pipeline last week--if we had had a whole network of
pipes, okay, we wouldn't have relied on just one pipe. So when
you build a network system, you always get better reliability.
And what we are talking about here----
Mr. Palmer. Mr. Skelly, from an engineering perspective,
unlike natural gas, which you can increase the output almost
immediately, you can't do that with wind and solar. It requires
substantial battery storage. And just--MIT reports that just
getting to 12 hours, storage will cost $2.5 trillion. And I
assume that you are counting on the taxpayers to pay for that.
The fact that Germany is in the position it is in with its
electric grid may be explaining--may help explain why they are
so desperate to cut this deal with Germany.
In regard to permitting, I think that is a huge issue for
us. I mean, under the current permitting regime right now, you
can't even get the paperwork done in the timeframe that my
Democrat colleagues think that the planet has left.
But if we expedite the permitting, would each of you be
okay with building transmission lines across wetlands and
rivers and sensitive habitat which holds up so much of our
infrastructure construction right now?
Would you be fine with that, Ms. Apsey? It is a yes or no.
It is a yes or no.
Ms. Apsey. Well, certainly, yes, anything to expedite. But
certainly there are considerations that obviously we want to be
sure that we don't find ourselves in litigation that would
further extend the timeline.
Mr. Palmer. That leads me to--the next question is for Ms.
Fisher. You in your testimony talked about litigation being a
significant factor in infrastructure projects. Do you see how
these issues that we have been dealing with for years will
continue to persist in the permitting process? And if you can
be very brief, I would appreciate it.
Ms. Fisher. I think some clear direction on permitting
might help resolve some ongoing litigation challenges.
Mr. Palmer. Okay. There is a couple of other things I want
to point out about this having a consistent network. One is
that it will require inverters, going back to what I was trying
to explain about the fact that you can't just ramp up your
power load with renewables immediately. And China is really
inserting themselves into that. That, I think, creates some
national security concerns for us and particularly when we are
so reliant on China already for rare earth minerals and other
minerals that we are not mining nor refining nor manufacturing
ourselves.
Wouldn't that create a major problem down the road,
increasing our reliance on China, Ms. Fisher?
Ms. Fisher. We are very committed to the cybersecurity of
our supply chain. And we have been talking with all of the
parts of that supply chain, particularly with respect to
inverters, to ensure that they are cyber-safe. It is a priority
for all of our companies.
Mr. Palmer. Madam Chairman, just a point of personal
privilege here. I do think there is another issue that we need
to take into account, and that is the potential for major solar
flares, known as a coronal mass ejection. Lloyd's of London has
major concerns about it. And what we once considered a once-in-
100-years episode, we are now saying has a 4 to 13 percent or
12 percent chance of happening in a decade. And I think the
committee should at some point take that under consideration.
I was shocked yesterday to find out that Energy Secretary
Granholm knew nothing about that, even though it has been
something that has been worked on the last three
administrations.
So if----
Ms. Castor. Thank you, Rep. Palmer. Let's work on that.
Mr. Palmer. I appreciate that. And I yield back.
Ms. Castor. Next, we will go to Representative Huffman for
5 minutes.
Mr. Huffman. Well, thank you, Madam Chair, and thanks for
this hearing. I think, once again, you have found a space in
this climate debate where there is--there is ample room to work
together and collaborate and do things that shouldn't be
controversial, that seemingly are pretty obvious.
We know expanding and modernizing our country's electrical
grid is key to unlocking the next phase of access to clean,
reliable, affordable, renewable energy. As we have heard here
today, a clean energy grid is the foundation really for
decarbonizing all sectors of the economy, from transportation
to buildings to industry.
But, you know, for years, we have been told, mostly by the
fossil fuel industry but also by some grid operators and
utilities, that this vision of a carbon-free power grid powered
mainly by renewables is unrealistic. Even just a few years ago
when I was a California legislator, I was told that our, at
that time, 33 percent renewable portfolio standard was
unattainable.
But 3 weeks ago, Madam Chair, something really interesting
happened. For a few minutes, California hit a remarkable
milestone. Ninety-five percent of our electricity came from
renewables. We have been bringing solar, wind, and storage
online faster than anyone previously predicted.
And suddenly, the conversation is not about if we can hit
our 100 percent clean energy goal, but whether we can do it
faster than 2035. And it brings to mind this principle of a
broken window at which things that are thought to be impossible
suddenly become inevitable. And no matter how much the
opponents of clean energy tried to pull that over to a window
back to the previous century's thinking, there is nothing like
seeing the fifth largest economy in the world powered almost
entirely by renewables or an all-electric F-150 that blows away
the internal combustion version of that iconic truck. So it
proves that the times are changing, and our job should be to
make sure that change comes in time to save the planet.
So, Mr. Skelly, would you speak to this question of what is
possible when it comes to incorporation of renewable sources of
energy onto the grid? How can we achieve this 100 percent clean
energy goal? Is it doable?
Mr. Skelly. Well, first off, I put in my deposit for a
electric F-150 last night so I am very excited about those as
well.
And second, I share your fascination with the topic on,
like, how much renewable energy can we put on the grid. And I
have been doing this stuff for, like, 25 years. And when we
started out, the grid operators, said, oh, wow, if we go over 5
percent, like, we don't know how we are going to keep the
lights on here. And this crazy, what you guys are talking
about, even with a small project.
And what we found is that everybody is more capable at
figuring this out, a lot more quickly than we ever imagined. So
the grid operators have figured it out, the meteorology has
gotten better, the technology has gotten better. And we have
all just sort of learned and this is how we have gotten to 98
percent. I mean, here in Texas we regularly go over 50 percent
renewables. If somebody had told me that that was going to
happen 20 years ago--and I was, like, an industry advocate--I
would say, like, no way. That is never going to happen. You are
out of your mind.
But to the point on transmission, one of the things--and
NREL has done some very interesting work on this topic--one of
the things we found is that if we want to increase a
percentage, transmission helps us do this. And MISO, one of our
most important grid operators, what they have discovered is
that fronts move from the West to the East. And because we
built out the grid in the upper Midwest, that allows us to
distribute the wind across the Plains, because in the Western
Plains, it is blowing hard but not yet in the Eastern Plains,
if the front moves across, then they can move the energy back
to the West.
Mr. Huffman. Thank you for that.
Mr. Skelly. So it is a really important piece to address
some of these issues that we are going to tackle and we have
proven we can tackle. And----
Mr. Huffman. I appreciate that. I just have a moment left.
In addition to more renewable energy, of course we want a grid
that doesn't spark fires every time the wind blows.
And so Ms. Apsey, I want to ask you, as someone who
represents arid California, how will these grid modernization
investments also address the fire-prone nature of our current
grid?
And I know I am out of time so I will yield back in
advance, Madam Chair. But if there is time to allow a brief
answer, I would greatly appreciate it.
Ms. Castor. Let's take that for the record, because we have
a vote that has been called.
And my intention is to go for as long as possible. And we
may have to take a quick recess at the end of the time period
for the first vote.
So Mrs. Miller, if you are ready I will recognize you for 5
minutes.
Mrs. Miller. Thank you, Chair Castor and Ranking Member
Graves. And thanks to all of you all for being here today.
I agree with my colleagues that modernizing our electric
grid is paramount. A strong and reliable grid ensures that we
can continue to keep our lights on in our homes, our schools,
and our businesses and reduce our carbon emissions. There is
certainly space for renewables in our grid modernization.
However, I think we all understand that renewables are not
currently in a place to power the entire grid. We must ensure
that we have a key baseload energy--coal and natural gas--to
fill in the gaps to keep the lights on when renewables cannot.
I am sure my colleagues from down South can attest to this and
the importance of having a resilient grid, particularly after
the storms that were down there as well as in my state in West
Virginia.
In order for our grid to be reliable, we need to ensure
energy can be transported quickly and efficiently. Pipelines
are infrastructure. The actions this administration has taken
on the Keystone Pipeline not only cost American jobs but will
cost the American energy grid. Ms. Fisher, how important is
baseload energy, such as coal and natural gas, to balancing the
electric grid?
Ms. Fisher. Thank you very much for the question,
Congresswoman. We use a very diverse range of resources to
ensure that we are able to provide reliable electricity. So
right now we do rely on resources like nuclear, natural gas,
and coal to provide electricity and to address variability in
renewable resources.
Many EEI members see a path to 80 percent emission
reductions using current technologies including renewables and
storage, but we are focused on developing those clean 24/7
resources that will help us provide reliability long-term as we
continue to decarbonize.
So thank you for the recognition of the importance of that.
Mrs. Miller. Well, you had mentioned in your testimony that
natural gas is one of the factors that are helping to drive
clean energy transformation. What else is needed to increase
the deployment of natural gas?
Ms. Fisher. We actually are the largest users of natural
gas in the country right now, Representative. So we use natural
gas right now to provide more than--I think it is close to 40
percent of the electricity generated in the United States last
year. So we rely on that. And we want to make sure that we have
continued access for it as we are developing those clean
technologies that will allow us to provide 24/7 support in a
cleaner future.
Mrs. Miller. Well, what positive changes could be made to
our energy infrastructure to decrease the cost to the
consumers?
Ms. Fisher. We have been very fortunate, thank you for the
question, that we have been able to reduce emissions 40 percent
over the last about 5 to 7 years while----
Mrs. Miller. Wow.
Ms. Fisher [continuing]. Keeping the energy crisis flat.
But we are constantly concerned about the impacts to customers.
And I think there are ways to help mitigate some of the
potential increases in costs to customers.
There was some discussion today about the value of the ITC
for transmission and mitigating cost. We also see some value in
mitigating costs to address the wildfire issue, to help us
offset the cost of some of the hardening that we will need to
take to make sure that the grid is resilient to different
hazards across the country.
Mrs. Miller. Thank you so much.
Chairman, I yield back whatever time I have left.
Ms. Castor. Thank you, Representative Miller.
Next we go to Representative Levin.
You are recognized for 5 minutes.
Mr. Levin. Thank you, Chair Castor. Thank you for holding
his hearing. And I do appreciate the bipartisan nature of the
topic today.
Mr. Colston, I wanted to first give a shout to the IBEW in
my area, San Diego in Orange County. I have great relationships
with them. And I know they are excited about the future of the
electric grid and the role that IBEW will play. We know when
President Biden talks about climate, it is always jobs, jobs,
jobs. The American Jobs Plan, of course, focusing on a lot of
this. And I wanted to ask you what jobs impact do you expect
the highlighted aspects of President Biden's proposal to have?
And bottom line, what will this mean for your membership?
Mr. Colston. Clearly the IBEW is fully supportive in all of
the evolved fuel sources. When we talk about that it is
infrastructure. Infrastructure creates jobs. Technology creates
jobs for the IBEW. As we build out the grid itself, that allows
the IBEW to bring in more members to build out the grid itself.
As we electrify IBEW's fully supportive of electrifying the
grid as it is. Electric charging station in as many places that
we can. That produces jobs as well. And when we talk about
technology, technology made in the United States, that produces
good manufacturing jobs. So the whole transition as it takes
place, working with our utility partners and also our
construction partners as we transition that creates good
valuable union jobs, blue collar jobs.
Mr. Levin. Terrific. Well, I was excited about that Ford F-
150 Lightning announcement last night. Also, though, I don't
think my wife's going to let me buy a new car any time soon.
But when I do, it is going to be another union made electric
car. So that was great.
I wanted to turn to planning for the siting of renewable
energy projects, I heard some about this. And particularly on
our public lands, I have been supportive of what they call
Smart from the Start where we designate development zones that
are best for certain renewables so that they don't conflict
with other land uses. And I know that the Interior Department
has engaged in this type of planning for transmission as well.
Ms. Apsey and Mr. Skelly, do you see value in this type of
Smart from the Start planning for transmission? And if so, what
are the best strategies to minimize impacts and conflicts
caused by new transmission lines? And are they applicable to
both public and private lands?
Whoever wants to go first.
Ms. Apsey. I am happy to jump in. Thank you for that
question.
Yeah, absolutely. Look, I mean I think if we look at
Michigan established about approximately 10 years ago, they
took an approach through legislation that established
identifying the areas in the state that had the highest wind
potential. And then through legislation it essentially
instructed the transmission providers to build the necessary
transmission to harvest as much wind. This was sort of a
renewable energy zone. Texas went through a similar process. It
is a very successful effort, a very successful process.
You know, look, we know in this country, we know where the
wind blows. We know where the sun shines. And so, as we talk
about planning a transmission planning process first, this
would be consistent I think with what you are suggesting. And
that is, right now what we do is we build transmission to
interconnect everywhere a generator may site, whether it is
optimal or suboptimal.
It is sort of like the movie the Field of Dreams, sort of
build it and they will come. If we build the transmission where
we know the renewable potential is, those renewable developers
will locate around the transmission line because the cost of
the transmission for the way we ask generators to pay for it is
prohibitive because the person who gets assigned the cost
responsibility it just makes the project null and void.
So we would be big supporters, big proponents of sort of a
transmission first approach based on where we know the
resources in the country are located.
Mr. Levin. Mr. Skelly, with the time I have left, I along
with many of my colleagues think that modernizing, expanding
electric grid ought to be a bipartisan subject where we find
common ground. And I was just curious what your view is as an
entrepreneur, who lives in Houston, Texas, on that?
Mr. Skelly. Yeah. Well, I think at the state-level we have
seen that it is a bipartisan issue. And you know, in Texas, we
did the biggest expansion of the grid, originally initiated by
Governor Perry and then followed through on Governor Abbott.
So it can be a bipartisan--or one party or the other does
it. It doesn't even have to be bipartisan, both parties seem to
do this. So I am confident we can get something done.
Mr. Levin. I am too, Mr. Skelly. Let's work together. Let's
find common ground. Let's get it done.
Chair Castor, I yield back. Thank you.
Ms. Castor. Thank, Representative Levin.
Next we will go to Representative Armstrong.
You are recognized for 5 minutes.
Mr. Armstrong. Thank you. I am just reading the LA Times
and I think it is great that we get somewhere to this point,
but the LA Times, a 94.5 percent figure was fleeting, lasting
just 4 seconds and was specific to the state's main power grid
which covered four-fifths of California, but doesn't include
Los Angeles, Sacramento, and several other regions. So I think
it is great, I think it is partial.
But I just, you know, we are talking about these Federal
right-of-ways and I think that is a great idea. And as we are
having an honest conversation about building out this
infrastructure, it is essential to expanding and, modernizing
the grid, we have to continue to talk about permitting. And I
have brought this up in multiple hearings because it is at the
core of many of the policy changes being talked about by both
Democrats and Republicans.
And at the Federal level, we already have the Federal
Permitting Improvement Steering Council that oversees the
Federal permitting process and resolves conflicts.
Unfortunately, the Council's authorization sunsets in the
coming years.
Last Congress, I introduced a bill with Senator Portman and
several Democratic Senators to eliminate and expand the
process. I mean, and the reality is many of these energy
projects--traditional energy projects or renewable projects--
will never come to fruition unless we maintain a neutral
permitting structure that is dependable, timely, and
reasonable.
And we know this, as we continue to deploy this, we are
going to have to talk about the existing rights of way, but--I
am sorry--but we know we will need more land to distribute this
generation.
So Ms. Fisher, how do we improve the permitting process to
allow more rights-of-way? Because as things stand, we just
simply don't have enough land available for distributed
generation.
Ms. Fisher. Well, I think that you have identified--thank
you for the question. I think that you have identified
coordination among differing permitting authorities is really
important, and extending that authority so that Council can
continue to operate would be useful.
You know, Federal and state permitting processes need to
work together well. States do have a lot of control over what
is cited in them. And we believe bringing in state partners
early into the discussion is really important. But, you know,
it is looking at efficient ways to get multiuse out of pieces
of land.
I will note that it is not incompatible with public lands
to run transmission through it. And that transmission often
comes with really large conservation easements that preserve
and protect land. So I think there are lots of ways to look at
multiuse.
Mr. Armstrong. Well, I just want to piggyback off of that a
little bit. One, I mean, when you are doing the state
permitting, if it is not common carrier, right--like North
Dakota is a state that does not allow eminent domain. Right?
And so you are having those different transitions. But you talk
about those--actually, we did obviously during the oil boom, we
tried to get a lot of pipe and transmission in the ground in
Western North Dakota. And my friends and colleagues in the
industry asked us how we can do that? I say, go back in time
and give the county easements, because on county roads in North
Dakota private landowners own to the middle of the road.
But when you are talking about these conservation easements
as we talk into the litigation as an ongoing issue that delays
the deployment of transportation--I mean, this isn't unique to
electrical transmission. This exists whether it is a highway, a
pipeline, a high voltage line. How do we address--do you have
some ideas of how we address that?
Ms. Fisher. People don't necessarily love living near
infrastructure even when they benefit from it. That is a
pervasive problem. I do think that you have identified some
appropriate ways of looking at how we site a lot of
infrastructure and run right-of-way to sort of minimize
impacts. I think that could be really helpful.
And we have seen some of our members do that, for example,
while they are deploying fiberoptic cable for their own uses,
they are also using that to bring middle mile broadband to
other customers who might not have access to that. So there are
ways to piggyback. Our infrastructure can be used for a lot of
other purposes. We do share a lot with the telecommunications
industry for example.
Mr. Armstrong. Well, I think one of the things we don't
recognize enough is with multiple agencies often completing
duplicative reviews, not only does take much more time, but it
creates several different areas in which--as is often the case
in a lot of these litigated cases, they don't care necessarily
which permit you violate. They just care that you violated one
of them or they have a case. So if we could get some of that
streamlined to get rid of the duplicative processing, do you
think we would also reduce some of the litigation?
Ms. Fisher. That would probably reduce some litigation.
Thank you.
Mr. Armstrong. And with that, I guess, Garret, I have 14
seconds if you want it or I will just yield back.
Ms. Castor. Thank you very much, Representative Armstrong.
I think the other Democrats are hustling back from the votes.
So we will go to Representative Crenshaw.
Welcome, you are recognized for 5 minutes.
Mr. Crenshaw. Thank you. Thank you, Madam Chairwoman, for
holding this important hearing.
I always want to preface everything we say we want to get
to the same goal, a reduction in global carbon emissions. I
want to get there in a smart way without destroying our
economy. And I think the solutions we offer generally are a
faster way to get there, to be perfectly honest. I want to
actually follow up on what Mr. Armstrong was talking about.
Mr. Skelly, you authored a report on 22 transmission
projects that are ready to go and even met with senior members
of the administration to discuss building them. However,
projects are on the shovel ready list have been on the list for
a decade plus. How many of the 22 projects are active and have
experienced more than 5 years of delay?
Mr. Skelly. I would say yeah, they have been--well, the
list is a new list so they haven't been on the same list, but
they have been underway for at least a decade on average. Okay?
Mr. Crenshaw. Yeah.
Mr. Skelly. And there is a few reasons why they haven't
moved forward. One is permitting delays. The other is failures
in the cost allocation process that we talked about a little
while ago. And that is, in other words, a failure to consider
all the benefits of the transmission. And the other is a
failure of the system to basically reward some of the merchant
developers for the additional services that they provide so.
Mr. Crenshaw. And one of the things we see of course is
weaponization of the court system. I mean, talking about
Cardinal-Hickory Creek, maybe I will move to Ms. Apsey for this
since you all are in charge of this one. Why is that facing
delays? Is it eminent domain, permitting, financing, political
will, or is it mired in lawsuits?
Ms. Apsey. Yeah. It is facing delay based on pending
litigation, which is essentially an appeal, parties who are
opposed to the project are appealing the process by which it
went through for several years.
Mr. Crenshaw. And do you think that these transmission
projects are going to face similar litigation, and that would
be a barrier to rolling out new transmission, especially well
over 120 percent additional new transmission, which is what our
fellows at Princeton seem to believe would be necessary to meet
our goals?
Ms. Apsey. Yeah. There certainly is a history of many major
transmission projects being delayed through litigation, you
know. And obviously, as we have talked about before, I mean,
time. Time is of the essence if we want to realize the benefits
both in terms of integrating renewables, the reliability, the
resiliency benefits. And so time is of the essence. And these
projects in and of themselves, even when everything goes as
planned and well, can take anywhere from 7 to 10 years to
realize.
Mr. Crenshaw. Which is far too long. And look, this is the
broader point I am trying to make here, step two is paying for
this stuff and building it. Step one is actually allowing
ourselves to build it. If we don't address the permitting
issues in this country, which are far more stringent than most
developed nations, we are never going to get to the part where
we build 120 percent more transmission lines in America. We are
never going to get to that point. There is no point in
allocating around $3 trillion to do this if it is just going to
be weaponized by the courts and weaponized by environmental
groups.
So I would ask my colleagues on the other side of the aisle
to consider this, the clean energy goals are directly in
conflict with the environmental groups as well because they are
the ones who sue and settle. The law has to be changed. There
is a lot of examples of this.
In 2011, President Obama created the Rapid Response Team
for Transmission to speed the permitting of five Western
transmission line projects. Only one is under construction so
far. Only one. The law needs to be changed. The proposed 300
mile electricity line to deliver renewable electricity from
Idaho to Oregon commenced permitting in 2010. Federal agencies
can't find a way forward on more than 30 Federal and 50 state
and local permitting actions, and another 100 water crossing
approvals.
Then I want to get to another broader point which is, is
this even the right approach to try and build--build massive
amounts and take up massive amounts of land for wind and solar
in places where the sun shines, and in places where the wind
blows, build out massive amounts of infrastructure and
transmission lines, to get that to where we need it? Is that
really even the right approach? Maybe we should rethink this.
We could build, for that amount of money, countless nuclear
plants. A nuclear plant, by the way, operates on a 1,000 acres
versus the same power of a solar farm that operates on a
100,000 acres. And the nuclear plant doesn't rely on weather.
Guys, you know, I want us to rethink how we approach the
problem that we all want to solve.
Thank you I yield back.
Ms. Castor. Thank you, Representative Crenshaw.
Next we will go to Representative Casten and then we will
go into a recess for 15 minutes.
Representative Casten, you are recognized.
Mr. Casten. Thank you, Madam Chair. Thank you to all our
members.
Mr. Skelly, it is a pleasure to see you, one former energy
developer to a current one. As I have long maintained, no one
really understands the financial, the regulatory, all of the
barriers to building projects like someone who has been in the
trenches as long as you have.
Americans for a Clean Energy Grid reported that as of 2019,
there was 734 gigawatts, basically 73 percent of our entire
grid, stuck in interconnection queues, mostly waiting for
debates over who is going to be responsible for paying for the
transmission upgrades. In the meantime, in Illinois where I
live, the SOO Green Project, that is a HVDC, no generation
associated with it, would bring cheap, renewable energy from
Ohio into Chicago markets to ease congestion, is hung up in
generator interconnection queues.
Last month, I introduced a bill with Senator Heinrich that
would require FERC to issue a rulemaking on interregional
transmission that would explicitly recognize the benefit of low
CO2 sources and bring them online quicker.
But what I wonder, Mr. Skelly, is if that is enough. We
have got this problem, that I don't think any of you have
addressed, but I want to give you a chance to talk about it,
given some of your history.
We have a real problem in ISO/RTO governance. The
governance structures of those organizations is often dictated
by members who have--and they have the best of intentions, but
as you know well, they have got a vested economic interest,
sometimes, in maintaining congested and high prices in their
region, which is precisely the problem that these projects we
are talking about would alleviate.
Can you just speak a little bit from your experience about
some of the issues with ISO/RTO governance. And if you were
king tomorrow, do you have any easy fixes that would still
recognize their critical need and recognize the expertise of
their members but get rid of some of the conflicts of interest?
Mr. Skelly. Yeah. I mean, having suffered personally at the
hands of a generator who didn't want us to interconnect on a
number of occasions, it really is an issue. And this does feel
like an area of ripe for FERC action and restructuring the
governance of the RTOs to accommodate more entrants, okay,
which is really what we are talking about. We are talking about
enhancing competition by permitting more folks to enter the
process.
I think it would be very helpful. And Texas has I think has
a great example of that. The interconnection process is very
straightforward. It is fast. You get quick results. You are
then in the interview market and you are kind of on your own,
whether or not you are going to make money. But it is a process
that has proven gets a lot of generation online quickly.
Mr. Casten. I would love for you to comment on this, Ms.
Fisher. I mean, a lot of the people who are in those governance
decisions are your members, you know. Would you agree with the
issue as I framed it? And to the extent that you can, what do
you think it would take to get some of your members to really
advocate for the changes necessary to essentially do something
that may be, you know, against their short-term economic
interests?
Ms. Fisher. Thank you very much for the question,
Representative. I might not fully agree that people enjoy
keeping congestion functioning for the purpose of increasing
prices. But I think everyone agrees that ISO/RTO governance
hinders progress and makes it difficult for people to make
decisions within those structures quickly and in a timeframe
that is consistent with the problems we are trying to solve.
I think everyone is concerned about generator
interconnection queues and how long they are, and how
potentially inefficient those processes are, and to look
forward to FERC working with the governance of those entities
to figure out how do you move things through that queue more
quickly, how to allocate costs for generators who are trying to
interconnect more quickly.
I don't think anyone thinks that those processes are
efficient as they need to be. Despite the literally sometimes
thousands and thousands of people who participate in them.
Mr. Casten. Okay. Well, I am getting near the end of my
time, but I would welcome any of your thoughts on
legislatively--I think it's very easy for us all in this body
to punt to FERC, but since we are waiting 20 years on some of
these things, I take your comments, Ms. Apsey, that Order 1000
wasn't perfect. But the core is the same issue. Right? There is
just these conflicts of interests between groups, especially
when we get to regional connections.
And I guess I would just remind everybody, including my
friend Mr. Crenshaw, that it is comparatively really easy to
permit gas pipelines in this country. We have made it
chronically difficult to permit transmission. And a big part of
that is the governance structure, a big part of that is the
failure to have a single point of control on these projects.
And I welcome all of your thoughts on what we might do
legislatively to move that a little bit faster than the snail's
pace it has moved in the last 30 years.
Thank you and I yield back.
Ms. Castor. Thank you, Representative Casten. So we will
reconvene the committee immediately after the second vote. So
we stand in recess until that time.
[Recess.]
Ms. Castor. The committee will come to order. Thank you for
bearing with us during votes on the floor.
Next we will go to Representative Gonzalez. You are
recognized for 5 minutes.
Mr. Gonzalez. Thank you, Madam Chair. And thank you to our
witnesses, our panel. The good news is I do think we have found
one area where there is bipartisan agreement with respect to
the need to modernize our grid. The how and why is always sort
of the challenge, but we are certainly in agreement on that,
and the events over the last year have played out to prove that
case.
I would like to associate myself with Congressman Graves's
comments with respect to the cost. And then I always like to
see my friend, Dan Crenshaw on, who centers us in reality. And
I would like to start with something that I think will
hopefully do the same.
So the hearing opened with alluding to the terrible storms
that are taking place in the southeast and obviously our heart
goes out to everyone affected. So I went to NOAA's website and
found the global warming and hurricanes overview of current
research results here. And I want to read a statement, because
I think it is important. We are getting to a point where any
time a bad storm happens we blame climate change. And I will
just read their summary.
In summary, neither our model projections for the 21st
century nor our analyses of trends in Atlantic hurricanes and
tropical storm activity support the notion that greenhouse gas
induced warming leads to large increases in either tropical
storm or overall hurricane numbers in the Atlantic.
While one of our modeling studies projects a large increase
in Atlantic Cat 4 and 5 hurricanes over the 21st century, we
estimate that such an increase would not be detectable until
the latter half of the century. And we still have only a low
confidence that such an increase will occur in the Atlantic
basin.
And of course it is also true that deaths from natural
disasters globally over the last 100 years are down 92 percent,
which is great. And then finally--and I think we have been
talking about California as if it is an example of how we want
our energy to exist broadly across the country. Again some data
between 2011 and 2020, electricity prices in California rose
seven times more than they did in the rest of the country. And
at the same time, carbon emissions rose 4.1 percent in
California, even as they declined 3.5 percent in the average
over the remaining 49 states.
So not something I want for Ohio. And I think we need to be
smart about how we move forward. Focus on the things we agree
on, but also fund the basic research that is necessary to
invent our way out of what is certainly a challenge with
respect to climate change and making sure that we do it in a
smart, a smart way, that is affordable and lasting.
So I want to start with Ms. Fisher. As I am sure you are
well aware, Congress is currently debating and negotiating an
infrastructure package that largely hinges on the question, how
do you pay for it? If we are going to modernize and decarbonize
the grid, we are going to have to attract more private capital.
I think that is obvious.
What sort of policies should we be pursuing to make these
energy investments more attractive to private investors in your
estimation?
Ms. Fisher. Thank you very much for the question. My member
companies are terrific at raising capital. As I mentioned,
before we are the most capital intensive industry in the United
States. And over the last 10 years, we have spent $1 trillion
on grid modernization and related efforts. So what usually
industry says remains true here. Some regulatory certainty and
some clear direction usually helps us to attract capital and
deploy it efficiently.
Mr. Gonzalez. Great.
And then Mr. Skelly, in your testimony you stated that if
there were greater Federal investment, we would be able to
carry out 22 high voltage transmission projects and increase
solar and wind generation by 50 percent. Can you explain the
impact that this would have on energy use? Because there is an
important distinction between production and use. And obviously
while the sun and wind are good energy sources, we still don't
have reliable and widely useable ways to store the energy for
days, weeks, or months.
So how would this project solve that storage challenge,
which I think is also a unique challenge?
Mr. Skelly. So with electricity, because consumption and
production are instantaneous, storage as you point out is
important. And there are some interesting advances. I am on the
board of a company called Form Energy and we are working hard
at multiday storage and making good progress.
The other way to think about it is with transmission, you
can move energy around the country. And that actually can
reduce some of the need for storage, because as we all know,
the wind and sunshine are variable across the country. And
moving energy in time as you point out is important, but also
moving it in space can be just or even more helpful in doing
so.
Mr. Gonzalez. That also carries substantial cost. Right? If
we are going to take Arizona sunshine and push it to call it
Oklahoma, that is going to require some challenges.
I see I am out of time. Sorry for that, but with that, I
yield back. Thank you.
Ms. Castor. Thank you.
Representative Bonamici, you are recognized for 5 minutes.
Ms. Bonamici. Thank you so much, Chair Castor and Ranking
Member Graves. And thank you to our witnesses.
We know addressing the climate crisis and also
strengthening investments in our electric grid will create
millions of good paying, high quality jobs. And that can help
especially displaced workers recover from the economic collapse
that has been caused by the COVID-19 pandemic.
Last fall I had a great visit with apprentices out at the
IBEW Local 48 in Portland. They have a partnership out there
with NECA, the National Electrical Contractors Association.
IBEW's electrical apprenticeship program demonstrates how our
transition to a clean energy economy can provide this
extraordinary opportunity to provide good paying jobs. The
program is also an excellent example of why we need to protect
and strengthening our registered apprenticeship system. And I
am glad the House updated the apprenticeship bill, the first
one since the 1930s.
So I am one of the leaders on the Education and Labor
Committee so I know we also have an obligation to address those
critical failures and make sure that Federal clean energy
investments uphold labor standards like Buy American, Davis-
Bacon prevailing wage, use of community benefit agreements,
project labor agreements. They all make a difference.
So Mr. Colston, in your testimony, you noted that IBEW
anticipates the need for at least 50,000 new linemen over the
next 10 years. So how can Congress better support IBEW's
efforts in both training the next generation, but also making--
getting more workers, the workers that we need to help us
[inaudible] in our clean energy transition?
Mr. Colston. We at IBEW itself we have more than 300
training centers throughout the United States; in almost all
communities, we have a training center there. We partner with
our partner utilities on training those linemen. We also
partner with our contractors on training those linemen. And
when the work is there, that allows us to take in additional
IBEW apprentices.
The apprenticeship program at the IBEW is unique as in the
other skilled trades, as not only do we give you an education,
but we are going to give you a job to put those practical
skills to work at the exact same time, so they will go hand in
hand.
The way that Congress can help us is as more transmission
lines are approved and actually get up and running and
building, that puts more of our members to work. As we
modernize the grid on the distribution system or even the
downtown network system, as we modernize that, that technology
allows our utility partners to add additional workforce to
theirs too. So as a permitting and citing permits come into
play as we determine where they are going and we can actually
build for the future and not just building a transmission line
that is just going to meet today's needs. We have the ability
to bring on the workforce to do that as they are coming on.
Ms. Bonamici. Mr. Colston, I don't want to cut you off, but
you mentioned citing and I want to get in another question.
So Mr. Skelly, when the Select Committee developed our
climate action plan, we heard about the challenges of citing
interstate transmission lines and overcoming those challenges
was going to be key to improving resilience on the grid.
So how will the Department of Transportation's recent
guidance on using existing rights of way for transmission lines
help address some of those challenges?
And also, if Ms. Apsey can weight in, as Congress considers
the American Jobs Plan, a once-in-a-generation comprehensive
infrastructure package, what further Federal investments can
help?
So Mr. Skelly and then maybe we can get a little bit from
Ms. Apsey.
Mr. Skelly. Yeah. So I would say that on using existing
rights of way, this is a fairly common practice. One when you
are developing transmission lines, you try to use existing
corridors or you follow pipelines, or railroads, or other
existing infrastructure in order to minimize disturbance.
What I think the guidance that was recently issued speaks
to and it is incredibly important is that initiatives like this
sort of raise the level of leadership around transmission. And
those of us who have been doing this work for a long time are
really heartened by the emphasis across the government, you
all, the administration and so on, on what do we need to do to
facilitate this infrastructure expansion.
So that is maybe the most important element of the guidance
that is coming out of DOT.
Ms. Bonamici. That is really helpful.
Ms. Apsey. Oh, gosh. Sorry. The clock ticked down, but do
you have, like, one or two words on what further Federal
investments can help the policies?
Ms. Apsey. Yes, certainly. And again, just going back to
accelerating timelines and bringing stakeholders together so
that we can get the certainty that we need to move forward with
this investment. Time is of the essence.
Ms. Bonamici. Great. Thank you so much.
I yield back. Thank you, Madam Chair.
Ms. Castor. Thank you, Representative Bonamici.
Well, I want to thank our witnesses for being with us
today, for staying with us through votes on the floor of the
House. You certainly have given us as an impetus to work in a
bipartisan way to modernize America's electrical grid and
expand clean energy. So thank you all.
Without objection, I have a few things to enter into the
record. First, the introduction from the April 2021 report by
Americans for a Clean Energy Grid, titled Transmission Projects
Ready to Go: Plugging Into America's Untapped Renewable
Resources.
The introduction from the May 2021 report by the American
Council on Renewable Energy, titled Investment Tax Credit for
Regionally Significant Electricity Transmission Lines.
A May 20 letter from the American Council on Renewable
Energy supporting investments in policies to upgrade and expand
the electric grid.
And a May 20, letter from the Solar Energy Industries
Association supporting transmission investments to help achieve
100 percent clean electricity.
[The information follows:]
Submissions for the Record
Representative Kathy Castor
Select Committee on the Climate Crisis
May 20, 2021
ATTACHMENT: Goggin, M., Gramlich, R., & Skelly, M. (2021 April).
Transmission Projects Ready to Go: Plugging into America's Untapped
Renewable Resources. Americans for a Clean Energy Grid.
The report is retained in the committee files and available at:
https://cleanenergygrid.org/wp-content/uploads/2019/04/
Transmission-Projects-Ready-to-Go-Final.pdf
ATTACHMENT: Goggin, M. and Gramlich, R. (2021 May). Investment Tax
Credit for Regionally Significant Electricity Transmission Lines: A
Description and Analysis. American Council on Renewable Energy.
The report is retained in the committee files and available at:
https://acore.org/wp-content/uploads/2021/05/Investment-Tax-
Credit-for-
Regionally-Significant-Electricity-Transmission-Lines-ACORE.pdf
++
ACORE
American Council on Renewable Energy
The Honorable Kathy Castor
Chair
U.S. House Select Committee on the Climate Crisis
H2-359 Ford House Office Building
Washington D.C. 20515
The Honorable Garret Graves
Ranking Member
U.S. House Select Committee on the Climate Crisis
H2-359 Ford House Office Building
Washington D.C. 20515
Dear Chair Castor, Ranking Member Graves and Members of the Committee:
The American Council on Renewable Energy (ACORE) appreciates the
opportunity to submit a letter for the record to the House Select
Committee on the Climate Crisis's May 20, 2021 hearing entitled,
``Powering Up Clean Energy: Investments to Modernize and Expand the
Electric Grid.'' ACORE works across renewable technologies and
represents the nation's leading renewable energy developers,
manufacturers and investors, along with corporate electricity
consumers, electric utilities, manufacturers of energy storage and
smart grid technologies, and the many other diverse industries that
comprise the country's thriving renewable energy economy. Renewable
energy and enabling grid technologies attracted over $68 billion in
private sector investment in 2019, and our members are proud of
renewable energy's contribution to American economic growth, job
creation and greenhouse gas (GHG) emissions reductions.\1\
---------------------------------------------------------------------------
\1\ American Council on Renewable Energy, Expectations for
Renewable Energy Finance in 2020-2023, 2020. Accessed May 13, 2021 from
https://
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acore.org/wp-content/uploads/2020/07/Expectations-for-Renewable-Energy-
Finance-in-2020-2023.pdf.
Initiatives to expand transmission lines and related enabling
infrastructure (including energy storage) play a critical role as part
of comprehensive climate recommendations and are an indispensable
feature of any plan to address the climate crisis by reducing GHG
emissions. The 15 states between the Rockies and the Mississippi River
account for 88% of the country's wind technical potential and 56% of
the country's utility-scale solar technical potential but account for
only 30% of projected electricity demand by 2050. These resources
cannot be developed without a plan for building interregional
transmission that can deliver power to high-density population centers.
A nationwide, high-voltage direct current (HVDC) network, optimized for
the nation's best wind and solar resources, could reduce carbon dioxide
emissions from the U.S. electricity sector by up to 80% relative to
1990 levels without an increase in the levelized cost of electricity.
Such a network would enable the U.S. to generate 60% of its electricity
using wind and solar resources alone.\2\
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\2\ Macro Grid Initiative, Transmission & Climate Change, 2021.
Accessed May 13, 2021 from https://acore.org/wp-content/uploads/2020/
12/Macro-Grid-Initiative-Transmission-and-Climate-Change-Fact-
Sheet.pdf.
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Grid expansion will also drive economic recovery and job creation.
A recent report from Americans for a Clean Energy Grid identified 22
shovel-ready, high-voltage transmission projects across the country
that would create approximately 1,240,000 family-sustaining jobs and
enable 60,000 megawatts (MW) of new renewable energy capacity,
increasing America's wind and solar generation by nearly 50 percent.\3\
---------------------------------------------------------------------------
\3\ Americans for a Clean Energy Grid, Transmission Projects Ready
to Go: Plugging Into America's Untapped Renewable Resources, 2021.
Accessed May 17, 2021 from https://cleanenergygrid.org/wp-content/
uploads/2019/04/Transmission-Projects-Ready-to-Go-Final.pdf.
---------------------------------------------------------------------------
A recent ACORE report detailed the growing consensus that
transmission provides large net benefits to electricity consumers.\4\
Transmission provides consumers access to lower-cost forms of
electricity generation, including high-quality renewable energy
resources. This report joins dozens of studies from grid operators,
national laboratories, and others that have found transmission
investment provides consumers with benefits several times greater than
its cost. The Southwest Power Pool (SPP) has already realized
significant benefits from recent transmission investments, with
benefits expected to exceed costs by a factor of 3.5 over the new
lines' first 40 years.\5\ The Midcontinent Independent System Operator
(MISO) has also found that its Multi-Value Projects offer a benefit-to-
cost ratio of between 2.2 and 3.4.\6\ Similarly, the National Renewable
Energy Laboratory Interconnections (NREL) Seam study found benefit-to-
cost ratios of between 1.8 to 2.9 for various transmission
configurations.\7\
---------------------------------------------------------------------------
\4\ American Council on Renewable Energy, Investment Tax Credit for
Regionally Significant Electricity Transmission Lines, 2021. Accessed
May 17, 2021 from https://
---------------------------------------------------------------------------
acore.org/wp-content/uploads/2021/05/Investment-Tax-Credit-for-
Regionally-Significant-Electricity-Transmission-Lines-ACORE.pdf#page=8.
---------------------------------------------------------------------------
\5\ Southwest Power Pool, The Value of Transmission, 2016. Accessed
May 14, 2021 from https://www.spp.org/documents/35297/
the%20value%20of%20transmission%20report.pdf.
\6\ Midcontinent Independent System Operator, MTEP17 MVP Triennial
Review, 2017. Accessed May 14, 2021 from
---------------------------------------------------------------------------
https://cdn.misoenergy.org/
MTEP17%20MVP%20Triennial%20Review%20Report117065.pdf.
---------------------------------------------------------------------------
\7\ National Renewable Energy Laboratory, Interconnections Seam
Study, 2020. Accessed May 14, 2021 from https://www.nrel.gov/docs/
fy21osti/78161.pdf.
---------------------------------------------------------------------------
The tragic power outages in Texas and other parts of the Central
U.S. in February of this year also underscore the importance of
transmission to electric reliability and resilience. The ERCOT grid has
limited ties to neighboring regions, so it was not able to import as
much electricity as other regions when hit with natural gas supply
interruptions, generator outages, and high demand in the face of
extreme weather. In contrast, stronger transmission ties between the
regions of SPP and MISO allowed those regions to weather the storm with
less severe power outages, as they were able to import more than 15
times as much power as ERCOT.\8\
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\8\ American Council on Renewable Energy, Investment Tax Credit for
Regionally Significant Electricity Transmission Lines. Accessed May 17,
2021.
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We respectfully submit the following policy recommendations for
upgrading and expanding the nation's electric grid to create jobs and
enhance reliability while deploying higher levels of renewable energy
and protecting public health: 1) Establishing an Investment Tax Credit
(ITC) for regionally significant transmission projects; 2) Improving
transmission planning and cost allocation processes; 3) Resolving
interconnection backlogs by assigning costs of network upgrades more
equitably; 4) Providing funding and technical assistance to states,
tribes, and localities to site transmission lines; and 5) Establishing
a national policy on transmission.
I. Establish an Investment Tax Credit for Regionally Significant
Transmission Projects
Increased investment in transmission infrastructure expands access
to, and delivery of, renewable energy resources. Recent studies from
Princeton, MIT, and others have found that significant transmission
expansion is needed to deliver the lowest-cost renewable energy to
market in a time frame compatible with U.S. clean energy
goals.9, 10 Despite this, necessary investments in
transmission infrastructure do not receive the same policy support as
generation resources.
---------------------------------------------------------------------------
\9\ Princeton University, Net-Zero America: Potential Pathways,
Infrastructure, and Impacts, 2020. Accessed May 19, 2021 from
---------------------------------------------------------------------------
https://netzeroamerica.princeton.edu/img/
Princeton_NZA_Interim_Report_15_Dec_2020_FINAL.pdf.
---------------------------------------------------------------------------
\10\ Brown, Patrick and Botterud, Audun, The Value of Inter-
Regional Coordination and Transmission in Decarbonizing the US
Electricity System, 2021. Accessed May 19, 2021 from https://
www.sciencedirect.com/science/article/abs/pii/
S2542435120305572?dgcid=author.
---------------------------------------------------------------------------
Congress should enhance the financial viability of regionally
significant transmission projects through enactment of an investment
tax credit. Enactment of a transmission investment tax credit (TxTC),
as contemplated on page 56 of the Committee's June 2020 Solving the
Climate Crisis Majority Staff Report, would provide developers with the
investment certainty they need through a predictable, multi-year
investment structure, all while saving ratepayers money and lowering
the upfront construction costs of transmission too often undervalued
rel-
ative to its economic development, job creation, reliability and environ
mental benefits.
In March 2021, President Biden called for the creation of a TxTC in
the American Jobs Plan, urging ``the creation of a targeted investment
tax credit that incentivizes the buildout of at least 20 gigawatts of
high-voltage capacity power lines.'' \11\ In April 2021, Rep. Steven
Horsford, Rep. Susie Lee and Sen. Martin Heinrich followed suit by
reintroducing the Electric Power Infrastructure Improvement Act (H.R.
2406/S. 1016). This legislation would promote construction of
regionally significant projects by providing a 30% tax credit for
investment in qualifying electric transmission, defined as any
overhead, submarine, or underground transmission facility with a
voltage of at least 275 kV and a transmission capacity of at least 500
MW. The tax credit would apply to properties placed in service before
December 31, 2031. Later that month, Sen. Ron Wyden reintroduced the
Clean Energy for America Act (S. 1298), which includes a 30% TxTC for
high-capacity transmission lines with a minimum voltage of 275 kV.
Importantly, the Wyden proposal also would provide a direct pay option
for the TxTC to ensure access by the broadest universe of stakeholders.
---------------------------------------------------------------------------
\11\ The White House, Fact Sheet: The American Jobs Plan, 2021.
Accessed May 18, 2021 from https://www.whitehouse.gov/briefing-room/
statements-releases/2021/03/31/fact-sheet-the-
american-jobs-plan/.
II. Improve Transmission Planning and Cost Allocation to Build More
---------------------------------------------------------------------------
Regionally Significant and Interregional Projects
FERC Order No. 1000 governs the regional and interregional
transmission planning process for cost-allocated projects. In the ten
years since FERC promulgated Order No. 1000, not one interregional
transmission line has been built using the process it established. With
more regionally significant and interregional transmission, we can
connect centers of high renewable resources with centers of high
electric demand, enhancing grid reliability and dramatically reducing
carbon emissions.
Implementation efforts too often do not incorporate projections of
the cleaner resource mix we need to build or allow for the use of
advanced technologies and grid optimization methods that could benefit
the build-out of clean energy resources by increasing capacity at lower
cost. These efforts also employ procedures that disincentivize
transmission interconnection and ignore benefits such as lowered
delivered energy costs through new renewable integration. Additionally,
FERC Order No. 1000 requires interregional projects to be separately
selected in the planning process for each RTO plus a joint RTO planning
process. Projects which do not have clear benefits within a single RTO
may not be selected in that RTO's planning process despite benefiting
the nation as a whole. This is known as the ``triple hurdle'' problem
of interregional transmission planning.
Congress should direct FERC to revise Order No. 1000 to produce a
more robust and efficient transmission system. This can be accomplished
by requiring planning processes to consider the full range of benefits,
plan for future needs, utilize more standard and broad cost allocation
in light of regional benefits, harmonize cross-region planning
processes and incorporate advanced technologies and grid optimization.
Commonsense transmission planning reform was contemplated on page
55 of the Committee's June 2020 Solving the Climate Crisis Majority
Staff Report.
In March 2021, Rep. Frank Pallone, Rep. Paul Tonko, and Rep. Bobby
Rush introduced the Climate Leadership and Environmental Action for our
Nation's (CLEAN) Future Act (H.R. 1512). Section 217 of the legislation
directs FERC to convene a technical conference to explore, among other
things, how transmission providers can plan for interregional
transmission projects, how interregional transmission planning can
facilitate the integration of renewable energy resources, and how to
develop appropriate cost allocation methodologies for interregional
transmission projects. The legislation also directs FERC to promulgate
a rule addressing the issues identified in the technical conference.
In April 2021, Rep. Sean Casten and Sen. Martin Heinrich introduced
the Interregional Transmission Planning Improvement Act of 2021 (H.R.
2678/S. 1015) to help bolster the Federal Energy Regulatory
Commission's interregional transmission planning process. The
legislation would direct FERC to consider in its rulemaking the
effectiveness of the existing interregional planning process, specific
improvement to the process that would meet the stated goals of Order
1000, and cost allocation methodologies that reflect the multiple
benefits provided by interregional solutions. The bill would also
direct FERC to initiate the rulemaking within six months of enactment
and complete a final rule within 18 months of enactment.
III. Resolve Interconnection Backlogs to Deploy More Clean Energy
When a new clean energy generator wants to connect to a congested
grid, they are often required to pay the full--or nearly the full--cost
of the upgrades necessary to do so, even though many existing customers
on the grid benefit from the upgrade. This process is analogous to the
next car entering a crowded highway paying for the full cost of a lane
expansion. At the end of 2019, as a result of broken interconnection
policy, 734 gigawatts of proposed generation--90 percent of which are
new wind, solar, and storage projects--were waiting in interconnection
queues nationwide.\12\ These disproportionately high interconnection
costs are forcing developers to shelve otherwise economic solar and
wind projects. To deploy this clean energy, Congress should direct FERC
to assign these costs to the beneficiaries of the upgrades.
---------------------------------------------------------------------------
\12\ Americans for a Clean Energy Grid, Disconnected: The Need for
A New Generator Interconnection Policy, 2021. Accessed May 18, 2021
from
---------------------------------------------------------------------------
https://cleanenergygrid.org/wp-content/uploads/2021/01/Disconnected-
The-Need-for-a-New-Generator-Interconnection-Policy-1.14.21.pdf.
Page 54 of the Committee's June 2020 Solving the Climate Crisis
Majority Staff Report recommends that Congress direct FERC to end its
policy of assigning costs of the regional network to individual
interconnecting generators and instead incorporate such needs into the
regional transmission planning and cost allocation processes.
IV. Provide Funding and Technical Assistance to Help State, Local and
Tribal Authorities Site Interstate Electric Transmission Lines
In many instances, state, local and tribal governments do not have
the resources to conduct the economic and environmental analysis
required to site and permit interstate transmission lines that pass
through their jurisdictions, often leading to lengthy delays. Siting
transmission in a just and environmentally responsible manner is vital
to building a 21st century grid. Congress can help ensure that
critically important state, local and tribal voices are represented in
the discussion by providing targeted assistance in the siting process.
Page 52 of the Committee's Solving the Climate Crisis Majority
Staff Report recommends that Congress create a new program at DOE to
provide federal funding and technical assistance for state, local, and
tribal authorities to conduct transmission planning and review
applications to site proposed interstate transmission projects. It also
recommends that Congress should authorize DOE to provide incentives for
economic development to these state, local, and tribal jurisdictions.
Section 218 of the CLEAN Future Act (H.R. 1512) would require DOE
to establish a program to provide assistance to state, local, and
tribal governments for the evaluation, permitting, and siting of
interstate transmission lines. The legislation authorizes $75 million
per fiscal year from 2022-2031.
V. Establish a National Policy on Transmission to Guide a 21st Century
Grid
Congress should establish a National Policy on Transmission to
integrate carbon-free resources in a timely and cost-effective manner.
Our national transmission system is the largest single machine in
America, if not the largest in history. Nevertheless, there is no
federal direction on how to make this machine work more efficiently on
behalf of the nation. This task that has taken on all the more
importance as we work to decarbonize the grid in a cost-effective
manner.
Page 53 of the Committee's Solving the Climate Crisis Majority
Staff Report recommends that Congress should establish a ``National
Transmission Policy'' to provide guidance to state and local officials
and reviewing courts to clarify that it is in the public interest to
expand transmission to facilitate a decarbonized electricity supply and
enable greenhouse gas emissions reductions. It recommends that the
policy statement should also encourage broad allocation of costs.
Section 211 of the CLEAN Future Act (H.R. 1512) would establish
that it is the policy of the United States that a modern transmission
system should facilitate a decarbonized electricity supply to enable
GHG emissions reductions, and that the public interest is served by
reducing barriers to transmission investments that enable clean energy
resources deployment.
Conclusion
Through this suite of commonsense policy solutions, all previously
endorsed in the Committee's June 2020 Solving the Climate Crisis
Majority Staff Report, we will be well prepared to modernize and expand
our nation's electric grid to drive continued economic growth for
decades to come while maintaining solid electric reliability and
meeting our climate challenge. We stand ready to discuss any and all of
these issues in greater detail at any time. Please let us know if we
can provide any additional information by contacting Bill Parsons,
Chief Operating Officer, at (202) 777-7596 or [email protected].
Sincerely,
Gregory Wetstone
President & CEO
American Council on Renewable Energy
++
SEIA
Solar Energy Industries Association
May 20, 2021
Chairwoman Kathy Castor
House Select Committee on Climate Crisis
H2-359 Ford House Office Building
Washington, DC 20515
RE: POWERING UP CLEAN ENERGY: INVESTMENTS TO MODERNIZE AND EXPAND THE
ELECTRIC GRID
Dear Chairwoman Castor,
On behalf of the Solar Energy Industries Association (SEIA), I
first want to thank you for your leadership on behalf of the American
people and the aggressive work you have already undertaken during the
beginning days of this 117th Congress to get us on a trajectory to a
100% clean energy economy by 2050. As the House Select Committee on
Climate Crisis discusses policy solutions at a hearing titled
``Powering Up Clean Energy: Investments to Modernize and Expand the
Electric Grid,'' I wanted to give you some specific details on how the
solar+storage industry continues to work aggressively towards your
goals and President Biden's goal of a 100% clean energy future, which
the nation so desperately needs and deserves.
SEIA has set a goal of solar+storage energy comprising 20% of the
U.S. electricity mix by 2030. We have denominated the upcoming 10 years
as the ``Solar+ Decade'' to represent not just the immense amount of
solar and energy storage that must be deployed for the U.S. to reach
both the committee's goal and those stated in the Intergovernmental
Panel on Climate Change (IPCC) goal for climate mitigation. If we
achieve this goal, the solar industry will have generated hundreds of
billions of dollars in investment and created hundreds of thousands of
American jobs.
First, we want to commend you for advancing the Transmission Siting
Assistance Program and the Interconnection Cost Allocation Bill. These
bills advance exactly the kind of policy needed to meet our clean
energy future.
As this Congress progresses towards a clean energy future,
investment in infrastructure, particularly transmission, will be
paramount to achieving America's path to 100% clean electricity. In its
2021 Infrastructure report card, the American Society of Civil
Engineers gives the U.S. a grade of ``C-'' for its energy
infrastructure. We continue to under-invest in our grid, and that costs
customers, both in terms of dollars paid for electricity (more
transmission reduces congestion, allowing access to cheaper generation)
and wages/economic output lost due to outages. Additional transmission
investment could save customers $50 billion annually and reduce
electricity bills by 10%.\1\ Transmission investments often provide
benefits two to four times greater than their costs. As we transition
to a renewable-based electric system, transmission is needed to access
renewable resources and deliver clean solar power to customers. And we
need to replace aging infrastructure and build new grid infrastructure
that meets the needs of our electrifying economy.
---------------------------------------------------------------------------
\1\ WIRES Report: Well-Planned Electric Transmission Saves Customer
Costs: Improved Transmission Planning is Key to the Transition to a
Carbon-Constrained Future. The Brattle Group, Johannes Pfeifenberger
and Judy Chang (June 2016).
---------------------------------------------------------------------------
The Federal Energy Regulatory Commission's (FERC) Order No. 1000
did not achieve the goals of smoother inter-regional transmission
planning and opportunities for competitively built transmission, in
part because it required states to commit to paying for proposed
projects before it could be approved. Some states do not have clear
mechanisms through which to do this, and cost-sharing between states on
what was public purpose, what was reliability, and what was market
efficiency were not easily resolved.
In general, SEIA believes that competition has the dual benefits of
lowering costs and increasing innovation. FERC, state policymakers, and
planning regions should revisit Order No. 1000 to see if modifications
are warranted to better attain its goals. Even better, Congress should
provide the necessary incentives and policies necessary to encourage
FERC, states, public utilities, and wholesale markets to drive needed
transmission investment.
In many areas, transmission upgrades will be needed to interconnect
new renewable generation, a challenge which every solar and storage
developer faces. Solar projects can often be sited relatively close to
population centers, making interconnection and localized transmission
critical to scaling solar deployment.
Interconnection is the act of mechanically connecting a distributed
generation project (solar, energy storage, wind) to the local
distribution electric grid. Interconnection can require electrical
improvements to existing infrastructure or require construction of
brand-new facilities. Such upgrades range in complexity from erecting
new poles and wires to replacing an area substation or even upgrading
transmission equipment.
Utilities typically charge solar developers the full cost to
upgrade their systems to accommodate the new generation source.
Interconnection rules define how a generation system, such as solar
photovoltaics (PVs), can connect to the grid. In some areas of the
United States, the interconnection process lacks consistent parameters
and procedures for connecting to the grid or is unnecessarily complex.
This drives up costs and causes delays, which can be significant
barriers to project development. The ability to interconnect to the
grid in a cost-effective and timely manner may determine whether a
project moves forward or not.
Beyond interconnection, the replacement of aging transmission
assets coupled with transmission expansion to strengthen the grid and
decrease congestion will be big drivers of new transmission investment.
But we also need to focus on the effects of regional transmission
planning. As of today, for SEIA's goal for solar+storage to power 20%
of the nation's electricity needs by 2030, no wholesale market in this
country has run a transmission planning scenario that puts solar
generation at 20% of their anticipated load in the next decade--except
for California. With this lack of foresight, we will always be behind
on our transmission investments.
Further, state renewable energy portfolio (RPS) policies vary in
their implementation--some have higher in-state requirements, some
allow wholesale market wide renewable energy credits, so the impact on
transmission is a function of how the policies are designed and not
simply the headline renewable requirement.
There are transmission success stories. Texas's Competitive
Renewable Energy Zone (CREZ) and MISO's Multi-Value Projects (MVPs)
were successfully planned and have built transmission to interconnect
expected areas of renewable energy build-out (primarily wind). However,
these success stories are few and far between and we cannot rely on
existing policy to deliver the investment that we will need to meet the
climate crisis. In order to achieve deep decarbonization, we need
policymaker commitment to transmission and solutions to cost
allocation, along with new incentives for renewable generation.
We have an opportunity unlike ever before to plan the transmission
build-out for what the next 100 years will look like. Transmission
Planners need to take into consideration the growth in renewables (20%
or more for solar), the need for distributed solar, storage, and other
technologies too. We must not also forget that as the transportation
sector is further electrified, grid planners need to anticipate
consumers using electricity to power their vehicles, both at home and
at distinct infrastructure points like the communal charging stations
which will take automation of building systems and greater
electrification of the economy overall. While no one can predict the
future with accuracy, being visionary as we approach transmission
investment will yield better outcomes.
Lastly, we must address the important need for energy storage. When
combined with other technologies, energy storage systems add value to
the total system. Distributed energy systems with energy storage extend
grid reliability to both sides of the meter. Paired with renewable
energy generation, the technology makes the renewable electricity
dispatchable and able to be used with demand management systems to
shift peak loads. Energy storage, when merged with aging
infrastructure, improves performance, and extends the service life of
equipment.
Battery storage will also empower the grid in multitude of ways;
similar to a Swiss Army knife, it can offer solutions depending on the
need. It is important to not box storage into a category of
transmission or generation. For utilities, energy storage can deliver
reduced operating costs, increased renewable integration, and decreased
dependence on fossil-fuel generation. For grid operators, storage can
provide a more efficient balance between supply and demand, avoid
system upgrades, and improved reliability. Commercial consumers see
reduced electricity bills, generated revenue, and control of power
disruptions. To the residential consumer, it provides the security of
backup power during blackouts and the benefit of reduced electricity
bills.
Important legislation is being considered that, constructed
correctly, will push us towards a decarbonized future, such as clean
energy standard and extending the ITC. We also encourage complementary
policy that encourages competitive markets to exist which provide
access to more renewables and to minimize hurdles to interregional
planning and new transmission development.
SEIA is proud of our industry's contribution to decarbonizing the
electricity system, but we know we still have a long way to go. Thank
you for your consideration of these policies and continued dialogue
with the solar and storage industry.
Sincerely,
Sean Gallagher
Vice-President
State & Regulatory Affairs
Ms. Castor. Without objection, all members will have 10
business days within which to submit additional written
questions for the witnesses. And I ask our witnesses to respond
as quickly as possible.
I also want to thank our professional staff for a very
good, detailed memo for this hearing. And it is available
online on our website at climatecrisis.house.gov.
Hopefully we will be able to work together here to hammer
out an American Jobs Plan that will help us create jobs, reduce
pollution, and avoid the worst impacts of the climate crisis.
With that, the hearing is adjourned. Thank you all very
much.
[Whereupon, at 12:12 p.m., the committee was adjourned.]
United States House of Representatives
Select Committee on the Climate Crisis
Hearing on May 20, 2021
``Powering Up Clean Energy:
Investments to Modernize and Expand the Electric Grid''
Questions for the Record
Linda Apsey
President and CEO
ITC Holdings Corp.
the honorable kathy castor
1. Ms. Apsey, investments in transmission would benefit ratepayers
across the country, increase reliability, create American jobs, and
enable reductions in carbon pollution from the electricity sector.
These widespread benefits suggest that modernizing and expanding the
electric grid should be a goal that Americans of all political stripes
can support. Should investing in transmission be part of bipartisan
infrastructure legislation?
I fully agree that investing in transmission infrastructure should
be a bipartisan priority, and I have been pleased to note the
bipartisan support in Congress for investment in this critical
infrastructure. Investing in a modernized, expanded transmission grid
offers wide-ranging benefits to communities across the nation and to
Americans of all political stripes. Well-planned transmission
investments can accelerate clean energy adoption, increase the
resilience of the electric system, and create high-paying jobs in
communities that need them most.
As I noted in my testimony, transformative transmission investment
cannot occur absent supportive federal, state, and regional policies.
In recent years, Congress has made a good start at addressing this need
by introducing legislation that would create a functional interregional
planning process, streamline and strengthen federal siting authority,
and provide financial incentives to large, transformative projects.
Congress' focus on these issues has sent a strong signal to the private
sector and helped to build consensus around the need for action. I am
hopeful that Congress will now take the next step and seize this
opportunity to pass legislation that supports investments in a 21st
century electric grid that will benefit all Americans.
2. Ms. Apsey, the February 2021 winter storm in Texas and the mid-
continent led to the freezing of critical equipment, power outages, and
even deaths. The Southwest Power Pool (SPP) region was able to import
power from the PJM Interconnection, which limited power outages.
Unfortunately, Texas could not do the same because of much smaller ties
to the other interconnections. Experts concluded that SPP would have
been even better off had there been more transmission between PJM and
the Midcontinent Independent System Operator (MISO) and between the
northern and southern parts of MISO. How can transmission lines promote
grid reliability as climate change increases the frequency of extreme
weather?
As the nation's largest independent electric transmission company,
ITC owns and operates high-voltage transmission infrastructure in
Michigan, Iowa, Minnesota, Illinois, Missouri, Kansas and Oklahoma.
These areas of the United States frequently experience blizzards,
windstorms, flooding, and other natural disasters, and ITC has observed
an undeniable increase the frequency and severity of these extreme
weather events. As recent history has proven, severe weather can cause
emergency conditions and outages, particularly in areas that do not
have strong transmission connections with neighboring regions.
As the nation faces increases in severe weather, transmission
provides crucial flexibility and redundancy in the system to prevent
outages and resulting human and economic costs. Strong transmission
connections within and between regions allow system operators to
leverage geographic and resource diversity when responding to extreme
conditions. Further, transmission can reduce the amount of generation
needed to meet capacity requirements, which reduces the probability of
generation-related outages in isolated pockets of the system.
The ability of transmission to enhance resilience is clear;
however, today's transmission planning regime does not fully value the
resilience benefits of potential projects. To enhance the ability of
the electric system to withstand severe weather, a more proactive and
holistic approach to regional and interregional planning is needed. As
a first step, regions should engage with their neighbors in
interregional planning that incorporates resilience considerations,
which today is not required.
3. Ms. Apsey, we have hundreds of gigawatts of wind, solar, and
storage projects stuck in interconnection queues. I am working on
legislation to help reduce interconnection costs and clear out these
queues through broader cost allocation and deployment of grid-enhancing
technologies. How would consumers benefit from clearing out the
interconnection queues for new wind, solar, and storage projects?
To the extent that interconnections can be accelerated, consumers
will benefit from access to lower cost generation, cleaner air, and
high-quality infrastructure jobs. In ITC's view, the best way to
address queue backlogs is to adopt a ``transmission-first'' proactive
planning approach that facilitates regional and inter-regional
transmission build. The current practice, which focuses on incremental
additions to the system for each new generation source, imposes
significantly higher costs over the long-run and results in the
backlogs we see today.
As you correctly note, transmission cost allocation continues to be
a major obstacle to transmission development and the interconnection
process. In order to properly recognize beneficiaries of transmission,
policymakers should provide supportive cost allocation mechanisms that
consider multiple benefits and assign costs accordingly. This, along
with a proactive regional planning process, will help to accelerate the
queue process and provide significant benefits to consumers.
4. Ms. Apsey, you stated in your testimony that an investment tax
credit could support transmission expansion. According to a recently
released report from the American Council on Renewable Energy (ACORE),
an investment tax credit for transmission could spur 4,000 miles of
high-capacity lines, capable of serving 30 gigawatts of new renewable
energy projects. If completed, these lines and new projects would
create over 600,000 jobs and spur $15 billion in new investment. Please
describe the kinds of benefits you anticipate from an Investment Tax
Credit.
A well-designed Investment Tax Credit for transmission can offer a
useful tool to promote large, transformative transmission projects that
can accelerate renewable development and enhance system resilience. For
non-regulated transmission projects (sometimes known as ``merchant''
projects), the story is simple; an investment tax credit reduces the
costs that must be recovered through contracted rates, making it easier
to secure the necessary agreements and move ahead to construction.
For regulated transmission projects, an investment tax credit can
help to reduce the costs that customers must bear for major lines.
This, in turn, can help to secure project approval, which is often done
based on an accounting of costs and benefits. The tax credit can also
make it easier to secure broad cost allocation agreements amongst
stakeholders, which are necessary to build regional and interregional
transmission. Further, if the tax credit is limited in duration, this
can help encourage stakeholders to move ahead with projects faster to
ensure they qualify for the credit within the eligibility window.
For FERC-regulated projects, policy design is key to ensure the tax
credit works as intended. ITC believes it is important that the credit
is only available to those projects that need it to move forward,
rather than available retroactively to projects which have already
secured key approvals (and would move ahead regardless). If this is
achieved, the tax credit can be a meaningful ``tool in the toolbox'' to
support significant new investments in beneficial transmission
infrastructure.
the honorable jared huffman
1. In addition to more renewable energy, we want a grid that
doesn't spark fires every time the wind blows. As someone who
represents arid California, how will these grid modernization
investments also address the fire-prone nature of our current grid?
ITC's footprints are located in the Midwest, which rarely
experiences wildfires. Instead, our region experiences severe cold,
windstorms, flooding, and high summer temperatures. As such, I can only
speak to ITC's experience managing resilience risks specific to our
footprints. However, we believe the principle that grid modernization
and expansion can enhance resilience by adding flexibility and
redundancy to the system holds true regardless of the specific nature
of the threat.
In ITC's view, electric infrastructure cannot be made fully
resilient through any single program or set of design codes. Instead,
resilience must be pursued through a multi-faceted commitment to
enhanced design standards, proactive system maintenance, aging
infrastructure replacement, and long-term system planning that
prioritizes enhanced transfer capability and critical path redundancy.
All of these measures have a cost, which must be considered against the
nature of the risk, hand-in-hand with regulatory authorities and key
stakeholders.
Given the regional differences in resilience threats, local
transmission owners best understand the unique geographies and needs of
their systems. In consultation with regulators and stakeholders,
transmission owners should be afforded flexibility to pursue resilience
measures best suited to region-specific threats.
Questions for the Record
Donnie Colston
Director, Utility Department
International Brotherhood of Electrical Workers
the honorable kathy castor
1. Mr. Colston, investments in transmission would benefit
ratepayers across the country, increase reliability, create American
jobs, and enable reductions in carbon pollution from the electricity
sector. These widespread benefits suggest that modernizing and
expanding the electric grid should be a goal that Americans of all
political stripes can support. Should investing in transmission be part
of bipartisan infrastructure legislation?
Speaking for the International Brotherhood of Electrical Workers,
the IBEW strongly supports the inclusion of federal investment in
electrical transmission as part of a bipartisan infrastructure bill.
Our electrical grid is one of the fundamental building blocks upon
which the rest of our nation's infrastructure, investments and
innovations rely upon. It is critical that all Americans have access to
safe, reliable electricity upon demand. This is not simply a matter of
the convenience of turning on your television or electronic device.
This can be a matter of life or death for Americans who need reliable
electrical service to keep their oxygen machines on or who need regular
dialysis services.
We have seen some of the unfortunate events in recent years that
can take place when electrical service, both at the transmission and
distribution level, becomes unreliable or when transmission lines need
to be temporarily powered down due to the weather or when a regional
transmission organization (RTO) or independent system operator (ISO) do
not have enough tie-ins to neighboring electric power transmission
systems. The IBEW believes the federal government can play an important
role in providing the investments necessary to facility much needed
transmission line construction that would avoid these recent blackouts,
as well as update regulations that would help facilitate more
privately-financed transmission construction.
Robust federal investment in transmission would also mean
significant work for our members. Outline line construction and
maintenance is difficult work that needs to be undertaken by trained
professionals. This type of work, in addition, provides the types of
middle class, family-sustaining wages and benefits that have been
called for by President Joe Biden and many Members of Congress as a key
benefit of pursuing bipartisan infrastructure legislation.
2. Mr. Colston, the February 2021 winter storm in Texas and the
mid-continent led to the freezing of critical equipment, power outages,
and even deaths. The Southwest Power Pool (SPP) region was able to
import power from the PJM Interconnection, which limited power outages.
Unfortunately, Texas could not do the same because of much smaller ties
to the other interconnections. Experts concluded that SPP would have
been even better off had there been more transmission between PJM and
the Midcontinent Independent System Operator (MISO) and between the
northern and southern parts of MISO. Would building new transmission
lines help increase the reliability of the grid?
Without question, building new transmission lines would help
increase the reliability of the North American electrical grid. In
2017, IBEW International President Lonnie R. Stephenson testified
before the House Energy and Commerce Committee saying as such, ``We
need a truly national grid and new transmission lines that can safely
and reliably transfer power--including renewables like wind and solar--
from energy rich regions to those parts of the country most in need.
And that means we need new transmission projects that will cross
multiple jurisdictions and state lines.'' \1\ The IBEW continues to
hold the same stance that additional transmission lines would provide
greater reliability. It is our sincere hope that greatly federal
investment in electrical transmission will help avoid future
catastrophes, such as the February 2021 Texas blackouts that impacted
millions of Americans, including a large number of our membership in
the state.
3. Mr. Colston, we have hundreds of gigawatts of wind, solar, and
storage projects stuck in interconnection queues. I am working on
legislation to help reduce interconnection costs and clear out these
queues through broader cost allocation and deployment of grid-enhancing
technologies. I am also working on legislation to help develop new
interstate transmission lines by providing technical assistance and
incentives to state and local governments. How would consumers benefit
from clearing out the interconnection queues for new wind, solar, and
storage projects? Would federal technical assistance and incentives to
state and local governments help speed up consideration of interstate
transmission lines?
In response to the question regarding Chair Castor's legislation to
help develop new interstate transmission lines by providing technical
assistance and incentives to state and local governments, my written
testimony states the following: ``We are also supportive of the
proposal to authorize federal funding for the Department of Energy to
provide technical assistance for state, local and tribal authorities to
conduct transmission planning and review applications of proposed
transmission projects.'' Technical assistance and incentives to state,
local and tribal governments to develop new interstate transmission
lines would enhance the safety and reliability of the electrical grid,
allow additional renewable and low carbon generation to be added to the
grid, and very likely put more IBEW members to work.
In addition, the IBEW supports efforts to accelerate the
construction of electrical transmission lines. One of the more
significant issues to building additional electrical transmission is
cost allocation. In 2019, the IBEW signed onto a multi-stakeholder
letter, including the Edison Electric Institute (EEI), the Solar Energy
Industries Association (SEIA) and WIRES, regarding electrical
transmission policy. Among the principles all the stakeholders agreed
to was:
[T]he Federal Energy Regulatory Commission, the U.S. Department of
Energy, and state economic regulators should assess the need to improve
upon and revise regulatory processes and corresponding regulations and
policies governing the planning and cost allocation of high voltage
electric transmission, balancing the public's interest in expedition,
cost savings, care of the environment, and an equitable sharing of
burdens.\2\
The IBEW still stands behind these policies in regards to improving
and revising regulatory processes for transmission planning and cost
allocation, particularly the principle of an equitable sharing of
burdens. As such, we hope Chair Castor's legislation will uphold the
principle of an equitable sharing of burdens when it comes to the cost
allocation of electrical transmission.
References Page
\1\ https://www.ibew.org/media-center/Articles/17daily/1702/
170221_WhatIBEWandCongress.
\2\ https://wiresgroup.com/diverse-coalition-signs-statement-of-
principles-on-modernizing-the-electric-transmission-grid/.
Questions for the Record
Emily Sanford Fisher
General Counsel, Corporate Secretary and
Senior Vice President, Clean Energy
Edison Electric Institute
the honorable kathy castor
1. The Select Committee's 2020 majority staff report ``Solving the
Climate Crisis: The Congressional Action Plan for a Clean Energy
Economy and a Healthy, Resilient, and Just America'' calls for adoption
of clean energy standard (CES) to achieve net-zero emissions in the
electricity sector. Portfolio standards are a proven tool for cutting
carbon pollution: in the United States, thirty states, Washington,
D.C., and three territories have adopted a renewable portfolio standard
or CES. What are the critical issues that Congress must consider in
developing a national CES? What is EEI's position on a national CES?
The Edison Electric Institute (EEI) supports a well-designed CES as
an important tool for reinforcing and accelerating electric companies'
ongoing clean energy transition. As of year-end 2020, the electric
power sector had reduced its carbon emissions 40 percent below 2005
levels, while keeping electricity affordable and reliable for
customers. Today, carbon emissions from the electric power sector are
at their lowest level in more than 40 years--and they continue to fall.
A diverse array of clean energy resources has made these reductions
possible: 40 percent of all U.S. power generation now comes from clean,
carbon-free sources, including nuclear energy, hydropower, wind, and
solar energy. Accordingly, one of the most critical issues in
developing a national CES is the continued focus on using all clean,
carbon-free resources. A CES must recognize or credit all clean
resources, including nuclear energy and hydropower, and must be
flexible enough to value new and emerging technologies, like carbon
capture and storage (CCS) and hydrogen, among others.
In addition, as many recent studies assessing the paths to a
carbon-free U.S. economy indicate, combined cycle and combustion
turbines will continue to be the most cost-effective technologies to
integrate more renewable energy reliably.\1\ These 24/7 technologies,
which use natural gas today, can be transitioned to cleaner fuels or
retrofitted with CCS as those options become available at scale and at
costs that protect customers. A CES, therefore, should recognize the
value of these technologies both today and in the future.
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\1\ See, e.g., E. Larson, C. Greig, J. Jenkins, E. Mayfield, A.
Pascale, C. Zhang, J. Drossman, R. Williams, S. Pacala, R. Socolow, EJ
Baik, R. Birdsey, R. Duke, R. Jones, B. Haley, E. Leslie, K. Paustian,
and A. Swan, Net-Zero America: Potential Pathways, Infrastructure, and
Impacts, interim report (Princeton University, Princeton, NJ, Dec. 15,
2020) at Clean Firm Resources and Thermal Plant Retirements, pp. 177-
199,
---------------------------------------------------------------------------
https://netzeroamerica.princeton.edu/img/
Princeton_NZA_Interim_Report_15_Dec_2020_FINAL.pdf.
Other important design elements for any CES include compliance
flexibilities, such as banking and credit trading, and other tools that
recognize that continued increases in the amount of clean energy
deployment are not likely to occur at an even annual pace, but instead
in ``chunks'' as new generation is built and other generation is
retired. Similarly, using a company-specific, multi-year average as a
baseline can be an important design element to recognize that there is
variability in annual reductions and that different companies and
regions are starting at different places in the clean energy
transition.
Cost-containment mechanisms should be included to protect
customers. These can include alternative compliance payments and price
caps. Timing flexibilities also are necessary to preserve affordability
and reliability. These tools allow companies to match compliance
deadlines with the availability of technology, particularly new, 24/7
clean resources, and can help address factors beyond companies'
control, like the timeline for the development of new transmission
necessary to interconnect new clean resources.
The timeline for achieving 100 percent clean energy targets will
depend on the development of new, affordable carbon-free technologies,
which include long-duration storage; CCS; advanced renewable
generation; advanced nuclear generation; and new fuels, such as
hydrogen. As a CES alone may not incent sufficient research,
development, demonstration, and deployment investments in these
technologies in this decade, complementary policies should be part of
any larger legislative package that includes a CES.
Similarly, while a CES can be an important tool to support and
accelerate the clean energy transition for the electric power sector,
other policies will be needed to ensure economy-wide reductions. Clean
electricity can help reduce emissions in other sectors, particularly
the transportation and building sectors. To the extent necessary, a CES
should recognize and support the electric power sector's role in
helping achieve economy-wide carbon reduction goals.
2. Ms. Fisher, investments in transmission would benefit ratepayers
across the country, increase reliability, create American jobs, and
enable reductions in carbon pollution from the electricity sector.
These widespread benefits suggest that modernizing and expanding the
electric grid should be a goal that Americans of all political stripes
can support. Do you think it would be a missed opportunity if we did
not invest in transmission as part of infrastructure legislation?
EEI's member companies invest more than $120 billion each year, on
average, to make the energy grid smarter, stronger, cleaner, more
dynamic, and more secure. These investments help diversify the nation's
energy mix and integrate new technologies that benefit customers. They
also create jobs, as EEI's member companies and their workers partner
to modernize the energy grid to better serve customers.
Electric transmission infrastructure is the backbone of the
nation's energy grid and is critical to facilitating the continued
transition to clean energy. The transmission system already has enabled
electric companies to integrate more clean energy resources and
technologies into the grid affordably and reliably. To support the
clean energy transition, critical electric transmission and other
energy grid infrastructure must be built more quickly.
In addition to investing in transmission--including supporting
increased private investment in transmission--other complementary
policies are needed. The way the nation plans, permits, and pays for
transmission can present more significant obstacles to building the
transmission we need in reasonable timeframes than a lack of
investment. Coupling federal investment support with other policy
changes is essential.
In two critical areas, federal government support for continued and
expanded investment in the energy grid could be transformative. First,
investments to improve the resiliency of the energy grid (ensuring
electric companies are at the center of such modernization) may be
necessary to help some communities adapt to the changing climate and
increased risks of natural disasters, including storms, hurricanes, and
wildfires. Public-private partnerships, grants, and funding for state
energy offices to address resiliency can be effective tools to support
these investments and to leverage investments being made by EEI
members.
Specifically, EEI supports H.R. 2885/S. 1432, the Power On Act; S.
704, the Disaster Safe Power Grid Act; reauthorization of the Smart
Grid Investment Program to recognize deployment of resiliency
technologies; and, within the CLEAN Future Act, Section 230, the 21st
Century Power Grid Act, and Section 371, Facilities Energy Resiliency,
which boosts funding for the Department of Energy's State Energy
Program.
Second, federal support for investments in electric vehicle (EV)
charging infrastructure can spur transportation electrification. Today,
the largest challenge facing the EV market is the charging
infrastructure needed to support market growth, not the energy grid
that powers that infrastructure. A report from EEI and the Institute
for Electric Innovation predicts that, by 2030, U.S. EV sales will
exceed 3.5 million per year and that 18.7 million passenger EVs will be
on U.S. roads, requiring about 9.6 million charging stations.
EEI's member companies are investing nearly $3 billion in customer
programs and projects to deploy charging infrastructure and to
accelerate electric transportation. Increasing investment from all
stakeholders--including electric companies, automakers, charging
network providers, and others--will help drive transportation
electrification.
the honorable anthony gonzalez
1. As we look to modernize the grid and secure it from cyber
intrusions, what is the role of private communications networks?
2. What opportunity is there to leverage utility communications
networks and related infrastructure to help bridge the ``digital
divide'' and deliver high-speed internet access to locations that have
electricity but lack reliable access to broadband service?
Electric companies long have incorporated telecommunications
equipment and fiber technology into their operations--particularly in
rural areas--to support their communications infrastructure and to
provide real-time monitoring and controls for generation and
transmission operations.
Substantial investments in telecommunications technology are needed
to make the energy grid smarter, stronger, cleaner, more reliable, and
more secure. Building out electric companies' telecommunications
network supports secure communications for mission-critical
applications, facilitates additional smart grid tools and distributed
energy resources, and makes the grid more resilient and more efficient.
As regulated service providers, electric companies are well-positioned
to help close the digital divide, as they have a physical connection to
nearly every home and business within their service territory.
The importance of increasing access to broadband and making it
universally available can be compared to the electrification of the
United States, and policymakers are looking to electric companies to
help bridge the gap. To provide multiple benefits to customers,
electric companies are working with the communities they serve and with
broadband providers to forge ahead with creative new partnerships
designed to benefit everyone.
With the formation of partnerships, needed changes to state
initiatives and laws, and the support of local communities, many
electric companies are helping to bring affordable and reliable
broadband to underserved and unserved communities, particularly as they
upgrade the energy grid and install more fiber to support their
critical communications network. Electric companies can install new
fiber within their existing networks with enough capacity to support
their needs and can lease additional capacity to others. This ability
to install and to lease additional fiber has helped to lower broadband
deployment costs in historically high-cost underserved and unserved
communities.
Under this arrangement, the electric company provides the ``middle
mile'' infrastructure--the segment that connects a local access point
to the major carriers and the broader internet--which the internet
service provider (ISP) will use to build out ``last mile'' broadband
services to homes and businesses. Installing middle mile infrastructure
typically is cost-prohibitive for ISPs in these areas, but partnering
with electric companies allows both entities to build needed
infrastructure cost-effectively and to reduce costs both for
electricity customers and new internet customers.
the honorable mike levin
1. As we are all aware, the condition and operation of the grid in
California has led to repeated catastrophic wildfires in our state. I
wanted to touch on the role that technology can play as we seek to
address wildfire risk. A utility in my district is working to deploy a
solution that uses wireless broadband, smart grid technology to depower
broken lines before they contact the ground. This is intended to
eliminate the ability for downed lines to serve as an ignition source
for wildfires. Ms. Fisher, do you believe widescale deployment of this
type of solution could help protect against the sort of utility-caused
wildfires we've experienced in California? And if so, what policy
changes or funding recommendations would accelerate deployment of this
and related technologies?
Wildfires are a persistent and dangerous threat throughout much of
the country, and they are particularly prevalent in the West. Nearly 85
percent of wildfires are ``human-caused,'' a broad category that
includes fires started by unattended campfires, burning debris,
equipment use and malfunctions, improperly discarded cigarettes, and
arson. Electrical equipment and downed power lines also can pose a
potential fire risk, particularly when the weather is hot, dry, and
windy.
Wildfire behavior is unpredictable due to many variables, including
weather conditions, terrain, and tree and vegetation species. This
confluence of factors, coupled with changing climate conditions and
population growth in more remote areas known as the wildland urban
interface, is leading to more frequent, more destructive, and more
costly wildfires.
Given the growing threat of wildfires within their service
territories, electric companies continue to invest in mitigation,
detection, and response efforts to reduce wildfire risk. They also are
focused on prevention, protection, and public-private partnerships.
Electric companies are making significant investments to harden
their systems and to make the energy grid more resilient. Actions
include incorporating artificial intelligence, aerial inspections, and
various low- and high-tech methods to mitigate potential fire risk
caused by electrical equipment and to defend against passing wildfires.
While it is not possible to predict definitively where and when a
wildfire may start, it is possible to use data analytics, combined with
increasingly accurate weather forecasts and vegetation conditions, to
identify high-risk areas. In addition to their enhanced mitigation
efforts, some electric companies preemptively shut off power in these
risk-prone areas when dangerous weather conditions or high wind events
are predicted that could impact electric equipment and power lines. In
recent years, electric companies have made significant investments in
the energy grid--including system segmentation, islanding, and
microgrid deployment--that have reduced the scale and scope of these
events.
As noted, EEI supports the following bills, which would support
efforts to minimize the wildfire risks that electric equipment may
pose: H.R. 2885/S. 1432, the Power On Act; S. 704, the Disaster Safe
Power Grid Act; reauthorization of the Smart Grid Investment Program to
recognize deployment of resiliency technologies; and, within the CLEAN
Future Act, Section 230, the 21st Century Power Grid Act, and Section
371, Facilities Energy Resiliency, which boosts funding for the
Department of Energy's State Energy Program.
Hardening their systems against increasingly destructive weather
conditions is a top investment priority for electric companies. Among
their investments, electric companies are installing stronger and more
fire-resistant poles and are placing sensors, high-definition cameras,
and weather stations and other protective technologies in the field to
provide real-time or near real-time information to electric company
command centers and first responders.
Collectively, the electric power industry has improved real-time
situational awareness capabilities significantly. In fact, electric
companies in the West have some of the most advanced weather tracking
systems in the country. They also are coordinating with various federal
agencies through the Department of Energy to establish shared
information platforms that will allow access to mapping tools,
satellite data, fire spread modeling, and other analytics that will
help drive real-time decisions and actions.
In addition to reducing the risk of fires caused by electric
equipment, these measures help to protect equipment from being damaged
or destroyed by wildfires and help to minimize service disruptions
within and adjacent to fire perimeters.
While wildfires typically are seasonal, electric companies work
closely year-round with federal, state, local, and tribal agencies to
help identify high-risk areas. This constant collaboration,
coordination, and communication focuses unified attention on proactive
mitigation measures ranging from high-tech data analysis and aerial
inspections via drones to fuel reduction and vegetation management. The
electric power industry also enjoys great cooperation with federal
government partners--specifically the U.S. Forest Service; the
Departments of Agriculture, Energy, and Interior; and the Federal
Aviation Administration--as well as with state regulators and local
officials.
EEI's CEO Wildfire Task Force and the Electricity Subsector
Coordinating Council's Wildfire Working Group, which includes investor-
owned electric companies, electric cooperatives, and public power
utilities, are focused on mitigation efforts, detection, and response
as part of a comprehensive wildfire strategy. These efforts are core
industrywide objectives for ensuring public safety.
Electric companies--individually and through partnerships with
federal, state, and local stakeholders--are taking extraordinary
measures to reduce wildfire risks on their systems and are working
closely with wildfire managers before, during, and after fires to help
save lives and protect property. Public policies must be reformed to
support the continued efforts by electric companies and their wildfire
partners to mitigate wildfire risk. It is vital that policymakers:
Pursue land management strategies that allow electric
companies to protect power line rights-of-way (ROW) by allowing access
and authority to conduct vegetation management and operation and
maintenance activities within and adjacent to ROW.
Identify and enhance partnership opportunities to assist
in fuel reduction efforts on federal lands.
Expand the use of drones beyond the visual line of sight
to conduct more efficient, cost-effective, and timely inspections for
wildfire mitigation.
Increase investments in grant programs at the Department
of Energy and with the national laboratories to identify available and
emerging technologies that could prevent, detect, and mitigate wildfire
impacts. Regulatory structures should allow the deployment of this
technology.
Increase investments in grant programs at the Department
of Energy to address costs associated with wildfire risk mitigation
efforts.
Increase investment in infrastructure resilience and
recovery by providing federal funding for grants and tax incentives for
investments in wildfire mitigation technologies.
Questions for the Record
Michael Skelly
Founder and CEO
Grid United
the honorable kathy castor
1. Mr. Skelly, you alluded to the February 2021 winter storm in
Texas and the mid-continent in your testimony. This storm led to the
freezing of critical equipment, power outages, and even deaths. The
Southwest Power Pool (SPP) region was able to import power from the PJM
Interconnection, which limited power outages. Unfortunately, Texas
could not do the same because of much smaller ties to the other
interconnections. Experts concluded that SPP would have been even
better off had there been more transmission between PJM and the
Midcontinent Independent System Operator (MISO) and between the
northern and southern parts of MISO. How can transmission lines promote
grid reliability as climate change increases the frequency of extreme
weather?
As I stated in my testimony, no grid system covered itself in glory
during the tragic events of February's deep freeze. It is clear,
however, the system operators who had access to bulk power flows from
neighboring regions were better positioned to mitigate the worst of the
effects from the freeze. With its limited transmission ties to other
regions, the ERCOT power system was only able to import about 800 MW
while trying to balance its short supply and heavy demand. Its
neighbors, SPP and MISO were able to import roughly 15 times that
amount during the winter storm because of stronger interregional
transmission connections.
As climate change increases the frequency of extreme weather
events, high-voltage transmission lines will play a critical role in
ensuring the resilience and reliability of our power systems. Winter
Storm Uri broadly impacted multiple regions. However, like other such
events we have seen in the past, Uri was at its most extreme only in
areas much smaller than the size of the Eastern and Western
Interconnections. Strong transmission connections across regions
allowed power to be exported from regions not experiencing stressed
power demands to areas with the worst of the extreme weather.
More regional transmission ties inherently create a more climate
resistant system. Had the proposed Southern Cross transmission line
been operational during storm Uri, its 2000 MW of capacity could have
powered 400,000 homes within the ERCOT system. If the ERCOT region had
multiple such ties, Uri would have been a much less harmful event--
perhaps even mitigated entirely.
2. Mr. Skelly, we have hundreds of gigawatts of wind, solar, and
storage projects stuck in interconnection queues. I am working on
legislation to help reduce interconnection costs and clear out these
queues through broader cost allocation and deployment of grid-enhancing
technologies. I am also working on legislation to help develop new
interstate transmission lines by providing technical assistance and
incentives to state and local governments. How would consumers benefit
from clearing out the interconnection queues for new wind, solar, and
storage projects? Would federal technical assistance and incentives to
state and local governments help speed up consideration of interstate
transmission lines?
Any technical assistance that can be given to state and local
governments to help speed along system-wide transmission planning would
be a welcomed new development. Clearing interconnection queues across
the country is the key to reaching ambitious de-carbonization goals.
The wind, solar, and storage projects currently trapped in these queues
will remain stuck absent robust policy changes in transmission
planning. The best wind and solar capacity in the country is located in
sparsely-populated regions with relatively modest load centers, and--
importantly--weak existing transmission lines to tie into.
Current transmission planning methodologies in RTOs and ISOs across
the country place the burden of network system planning on generators.
By more broadly cost-allocating interconnection upgrades, individual
costs to consumers will be reduced because more low cost renewables
will get built.
Consumers will benefit from the clearing out of interconnection
queues around the country through the lower cost wholesale energy
prices of wind and solar projects relative to other forms of power
generation. This will mean lower emissions of pollution and cleaner air
as more fossil fuel plants are retired and replaced with clean energy.
3. Mr. Skelly, you stated in your testimony that an investment tax
credit could support transmission expansion. According to a recently
released report from the American Council on Renewable Energy (ACORE),
an investment tax credit for transmission could spur 4,000 miles of
high-capacity lines, capable of serving 30 gigawatts of new renewable
energy projects. If completed, these lines and new projects would
create over 600,000 jobs and spur $15 billion in new investment. Please
describe the kinds of benefits you anticipate from an Investment Tax
Credit.
An Investment Tax Credit (ITC) of the kind identified in the ACORE
report would allow more projects to pass the benefit-to-cost ratio test
by lowering the denominator of this test. If more transmission lines
are built, we will realize lower carbon emissions, lower cost
electricity prices as more renewables escape interconnection queues,
and more resilient systems to extreme weather events caused by climate
change. Not only will cost-allocated projects reap the benefits of an
ITC, but the economics of more merchant transmission lines improve with
a 30% ITC.
For ``merchant'' lines that are not cost allocated, reducing the
cost of the projects via an ITC will allow transmission developers to
lower their transmission charges and thus more projects to get built.
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