Dive Brief:

• At the second meeting of a federal-state transmission task force, there were calls for developing portfolios of transmission projects instead of reviewing projects on a case-by-case basis, which some said could make it easier to advance transmission development.

• Some state regulators at the Federal Energy Regulatory Commission and National Association of Regulatory Utility Commissioners (NARUC) task force meeting on Wednesday supported requiring grid operators to reach minimum thresholds on the amount of electricity they are able to transfer to their neighbors.

• FERC and state regulators debated the merits of removing the typical silos transmission projects are lumped into – reliability, economic and public policy – and expanding the categories of benefits that should be considered when reviewing the proposed facilities.

Dive Insight:

Last year, FERC and NARUC launched the transmission task force to see if there were ways to make it easier to build major power lines in the United States. The effort comes as FERC is preparing possible changes to its transmission planning, cost allocation and generation interconnection requirements.

The task force's meeting in Washington, D.C., during the last day of the NARUC Winter Policy Summit, focused on assessing the benefits of transmission projects and how to allocate their costs. Generally, regulators determine who pays for a transmission line and how much they pay based on the benefits they receive from it. Those issues will be crucial in what is expected to be a wave of transmission development needed to deliver power from remote wind and solar facilities to population centers.

FERC and states need to work together to come up with a revised process, including how to share the costs of new transmission lines, according to FERC Chairman Richard Glick.

"States have an enormous role to play in transmission and that includes issues related to cost allocation because, you know, if a particular state or a group of states don't like how transmission costs are allocated, it would be much more difficult to site that particular project, and so I think we very much need to work together," Glick said. "It's vital that we go into this arm in arm and try to figure out an approach that we all can live with."

One way of getting the most out of transmission benefits is to consider projects in groups to capture the synergies among multiple projects, according to Riley Allen, Vermont Public Utilities Commission commissioner. Allen called for taking an integrated look at projects instead of considering them in "silos."

Reviewing projects in groups may help overcome political hurdles state regulators face when scrutinizing proposed power lines, according to Jason Stanek, Maryland Public Service Commission chairman and a task force co-chair.

"It's easier to sell, it's easier to spread some of these costs to a wider base of beneficiaries," Stanek said. "That may be one political way for us to get some of these projects moving if we adopt that portfolio approach."

Regulators also discussed options for determining exactly how to measure a transmission line's benefits.

"I think this idea that we can just plan for and then allocate the cost for transmission based on one particular set of benefits is probably a little bit outdated," Glick said. "Cost containment is a big issue. We're talking about billions and billions of dollars of expenditures, and when we allocate cost, we always need to make sure not only that the beneficiary pays but the beneficiaries are getting the bang for the buck."

Rather than broadly expanding the types of benefits that should be considered, it may be more important to consider some of the standard benefits like improved economics and grid reliability at the same time, instead of separately, according to Andrew French, Kansas Corporation Commission commissioner.

As an example, French pointed to the Joint Targeted Interconnection Queue study, an initiative by the Southwest Power Pool and the Midcontinent Independent System Operator (MISO) to consider transmission projects along their border that could increase generation interconnections and also reduce electricity costs.

"You're finding projects that meet multiple needs, and then asking multiple folks to pay," French said. "You can plan more optimally, meet multiple needs and share the costs. I hope [the initiative] starts taking us down that path because that's the direction I think we need to go."

The scope of benefits grid operators use to assess transmission projects may need to be expanded, according to Allison Clements, FERC commissioner.

Clements said winter storm Uri a year ago showed the reliability value in having interconnections between grid operators, but that value isn't included in measuring the benefits of those connections.

"A set of multi-value lines in the MISO region, in addition to other lines providing interregional connectivity, provided tremendous critical benefits, and we don't have a particular way of capturing those benefits, even though we see them playing out in real life," Clements said.

It may be helpful for FERC to provide a common set of definitions on benefits, but it is important to leave flexibility around how benefits are considered, according to Glick.

For example, when transmission lines are built to meet state energy goals, those lines produce other benefits like resiliency, reliability and cost savings, Glick said.

"If we were just to say only the states that have this particular public policy on carbon should have to pay for that transmission line, it will be leaving a whole bunch of other benefits on the table" and violating the standard that parties that benefit from a project pay for its costs, Glick said.

FERC Commissioner Mark Christie asked the state regulators about the idea of the agency requiring regional transmission organizations (RTOs) to work with neighboring grid operators to have a minimum transfer capacity between themselves to boost reliability.

Ted Thomas, Arkansas Public Service Commission chairman, and French supported the idea.

During winter storm Uri, SPP imported about 7,000 MW from MISO and the PJM Interconnection, helping to keep the lights on, French said.

"We know that improving our connectivity with our neighbors will make us more resilient because we've seen it," French said. "There is absolutely an appetite that if there were projects to improve resilience that I think Kansans would support paying their fair share of that reliability and resiliency benefit."

State regulators from Utah and North Carolina – states outside RTOs – urged FERC to adopt a "light touch" in any new transmission rules.

There is momentum in the West towards developing energy markets and resource planning frameworks, according to Thad LeVar, Utah Public Service Commission chair.

Western stakeholders need "time and space and flexibility" to continue that work, which is building a foundation to move towards transmission coordination, LeVar said.