The Federal Energy Regulatory Commission is “on the doorstep” of reforming the interconnection queue process and setting minimum levels of interregional transfer capacity, FERC’s Acting Chairman Willie Phillips said Thursday.
“In order to get the needed transmission projects financed and built, we must address the continuing barriers to regional and interregional transmission investment,” Phillips said at a meeting held by WIRES, a trade group for utilities, grid operators and other companies in the transmission sector.
FERC last year proposed revamping its transmission planning and cost allocation rules and reforming the process for generators to connect to the grid. The agency is also considering requiring regions to be able to transfer minimum amounts of electricity with their neighbors, partly to bolster reliability during extreme weather. Also, Sen. John Hickenlooper, D-Colo., is preparing a bill that would require regions to be able to transfer at least 30% of their peak load to their neighbors.
“I'm committed to working with my colleagues to make sure that we can advance and keep the momentum going on these proceedings so that we can see a real benefit to our transmission investment in the near term,” he said.
The bipartisan infrastructure law and the Inflation Reduction Act will likely spur significant transmission development, according to Phillips.
FERC will also have to double down on transmission reform, he said. “We have to send the right signals to investors to let them know that we're going to do everything we can to speed this process up,” Phillips said.
The best path to bolstering grid reliability is through interregional transfer requirements, according to Phillips.
“One of the best ways that we can maintain reliability and resilience is to make sure that we get power from one part of the country where it's generated to where it's needed,” Phillips said.
Building more transmission will increase costs in the near term, but lower them over the long term, according to Phillips.
“What I recommend is that we be thoughtful, that we be strategic and do this in a way that is efficient, that is sustainable,” he said. “I think a big part of doing this too, is not just building everything that we can.”
Transmission owners and developers should use “grid-enhancing technology” to increase capacity on existing lines at a lower cost than rebuilding them, according to Phillips.
Along with grid reliability and transmission reform, Phillips said his top priorities include environmental justice.
“You got the wrong man if you think that I'm not going to make every effort that we can to lift the voices of underserved communities,” Phillips said. “I grew up in an environmental justice community. I know what it feels like to live in the shadows of heavy industry. I know what it smells like.”
The United States has to be able to build out the energy system it needs and respect environmental justice communities at the same time, he said.
“What we have to do is make sure that we have the voices of underserved communities at the table and that they're heard in a meaningful way, every step of the way,” Phillips said.
Early engagement with people affected by proposed infrastructure projects can reduce delays and litigation, according to Phillips.
When they work, regional transmission organizations and independent system operators have tremendous value, Phillips said, noting complaints about them mostly center on capacity markets.
While imperfect, they have fostered diverse generating resources, brought transparency to transmission planning and operations through their market monitors, and improved reliability, he said.
“I think we've seen some of these cracks at the seams and we've tried to address those,” he said.
Phillips urged stakeholders to communicate with the agency as much as possible. “I know that there's been a lot of activity from FERC and we're all exhausted,” he said. “I've tried to moderate that a little bit to sort of bring things down to a pace that's digestible.”
