By James Holtkamp and Mark Davidson, Holland & Hart
The electric transmission system in the western United States needs to be upgraded and expanded. Existing transmission in the West was built primarily to move power within local utility systems and to connect neighboring utilities to increase reliability.
Little major transmission construction has occurred in the West during the past quarter century, although energy demand has increased dramatically. Energy demand in the Western Electricity Coordinating Council (WECC) area increased 35 percent from 1992 to 2007, according to the Energy Information Administration. Demand for electricity in the United States is projected to increase 18 to 39 percent by 2030.
During the past few decades, natural gas and coal-fired power plants have been constructed near load centers. As a result, little new transmission was needed to accommodate the added generation. Future generation, however, will include renewable resources located far from load centers and transmission lines. New transmission will be needed to deliver renewable resources to market.
Challenges to Transmission Siting
The principal hurdles to transmission siting include:
“- Increased demand for location-constrained renewable energy to power-concentrated urban areas. Renewable portfolio standards, social concerns over climate change and popularity of green energy have spurred an unprecedented increase in demand for renewable energy generation. Unlike traditional energy sources, renewable energy is largely location-specific. If location-constrained renewable generation is going to serve growing loads in western urban areas, new facilities must be constructed away from the load centers. This will require the construction of thousands of miles of new transmission lines spanning the West.
“- The “not-in-my-backyard” (NIMBY) syndrome. Not only do many people object to aesthetic and other impacts of a major powerline in their communities, but a growing number of people object to powerlines on lands far from population centers. Land use obstacles are common because lines often traverse fragile habitat, recreational land, scenic and historic trails and parks. The NIMBY syndrome has spawned numerous legal and political battles that encumber siting across the West.
“- Conflicts among local, state and regional interests. Many state and local governments are reluctant to approve a regional or national transmission project if there is no direct benefit to the state or local jurisdiction through which the transmission line will pass. In some cases, siting authorities are prohibited from approving projects that do not directly address state needs, though they may be responding to significant regional needs. In states where local governments have primary siting authority, a battle of wills often plays out as local needs trump state and regional needs. A myopic view of transmission siting can delay or cancel projects.
“- Inconsistent and conflicting state and local regulatory requirements. The definitions of “public utility” vary from state-to-state, meaning that the degree and scope of interstate transmission line regulation will vary depending on the state. Also, local governments in some states can effectively halt a project, even if the requisite state authorizations have been secured.
“- Federal and state environmental reviews. The National Environmental Policy Act (NEPA), Endangered Species Act, Migratory Treaty Bird Act, California Environmental Quality Act and various other federal and state environmental review requirements create lengthy, complicated processes that are often sources of litigation by project opponents. In addition, the shelf life of an environmental review might not last through the entire siting process, requiring new reviews or updates.
“- Federal land authorizations. Along with the NEPA review process, a major transmission project proponent in the West has to navigate through a complex array of federal public land management requirements administered by the Bureau of Land Management (BLM), Forest Service, Fish and Wildlife Service, National Park Service and Bureau of Reclamation. In addition, a major project often requires modifications to land use management plans, which can trigger an expensive, time-consuming and often litigious process.
“- Lack of timing coordination among siting entities. Timelines for completing environmental and other reviews associated with transmission line siting vary across siting authorities. It is often impossible to synchronize the siting process for an entire regional line. Because so much of the land in the West is federally owned, the federal government–mostly through the BLM–plays a central role in transmission line siting. The federal government’s timelines for environmental reviews often exceed those of the siting processes of state and local siting authorities. As a result, entities must often site portions of a line not knowing if they will receive approval to site of the rest of the project.
“- Inconsistent state policies regarding greenhouse gas emissions and renewable portfolio standards. The California SB 1368 carbon emissions performance standard for long-term contracts for imported electricity has placed a severe constraint on the prospects for new coal-fired generation in other western states that might otherwise serve California markets. In addition, not all states have renewable portfolio standard requirements, and those that do have differing definitions of renewable energy and differing goals and deadlines.
“- Short-term capacity vs. long-term needs. Siting and cost issues have resulted in many lines originally planned as extra-high voltage (765 kVA, for example) not being built at that size. This is partly a result of the high risks involved with building such a large line. It is also a result of the narrow definition of “need” used by many siting authorities. If the full capacity of the line is not going to be used in the near future, that extra capacity may be considered unnecessary and hence not permitted.
“- Uncoordinated siting of transmission lines and renewable generation. Transmission line siting is inextricably tied to renewable energy generation siting. Renewable energy siting and transmission siting, however, often are not considered together. This creates significant risk that is difficult for a transmission proponent or siting entity to overcome.
“- Timing of “need” determination. Siting entities often wait too late in the siting process to determine need. They spend substantial time and resources in project planning before the project is justified. Because siting is tied only loosely to planning, the essential question of need is left to the end of the process, costing unnecessary time, money and effort.
Regional Transmission Siting Options
A variety of options exist to address multistate transmission development, and they are not necessarily mutually exclusive. One option is to create a regional, multistate approach to transmission siting approval. The Western Governor’s Association and various federal agencies entered into a siting protocol in 2002 for “a systematic, coordinated, joint review process for siting and permitting of interstate transmission lines in the Western Interconnection.” The siting protocol established procedures for interagency cooperation but does not contain uniform substantive siting provisions. It can, however, serve as a basis for a more detailed substantive accord among the states and the federal agencies containing uniform criteria and procedures for siting regional transmission facilities. Similarly, the Western Renewable Energy Zones joint initiative between the Western Governors’ Association and the U.S. Department of Energy could serve as the platform for developing a regional transmission siting regime. The initiative’s current scope contemplates the generation of conceptual transmission plans for delivering renewable energy to load centers in the western United States.
The Energy Policy Act of 2005 authorizes three or more contiguous states to enter into an interstate compact to “facilitate siting of future electric transmission facilities within those States” and to “carry out the electric energy transmission siting responsibilities of those States.” The Energy Policy Act’s authorization of an interstate compact could be a powerful tool for maintaining state control over the siting process while establishing regionally consistent policies and procedures. Although discussions have occurred among various western states and other regulatory entities regarding regional approaches to transmission siting, there are not yet any meaningful state siting reform efforts.
A number of interstate organizations exist in the western United States that illustrate the efficacy of a multistate approach. For example, the 1990 amendments to the Clean Air Act established the Grand Canyon Visibility Transport Commission to address the degradation of visibility in the Grand Canyon. That commission, consisting of several western states and tribes, extensively studied the sources of visibility degradation in the western United States and recommended measures to the Environmental Protection Agency to address it. The measures were incorporated into federal regulations.
Another example is the Western Climate Initiative (WCI), which is formulating a regional greenhouse gas regulatory program that will apply to each state member of the WCI. If and when individual state legislative authorization is secured, each state will participate in a program of uniform applicability throughout the region.
Another approach is to develop uniform transmission siting guidelines for adoption by western states. These guidelines, perhaps in the form of a model Major Transmission Siting Act, would include provisions for evaluating the regional or national interests in considering a major interstate transmission facility. They would also deal with critical corridor designations, environmental reviews and the paramount role of the state in making overall siting determinations.
A multistate transmission siting initiative in the West would maintain the local control and stakeholder input, which is a hallmark of an open process, while assuring that necessary infrastructure is approved and built to bring energy to growing load centers.
The identification and implementation of best practices on a regional basis is imperative if the western states are to maintain significant control over the transmission siting process.
Resolutions and Recommendations
Best practices in individual states could be compiled into a list of 2010 (and beyond) siting resolutions for regional siting regimes. They include:
“- Allow a state siting agency to preempt if local decisions conflict. At the same time, use a process to assure that local community concerns are considered and that a local decision is only overridden if the broader public interest is compelling.
“- Create a centralized siting agency with jurisdiction over transmission projects proposed by any entity, whether or not the proponent is a regulated public utility.
“- Ensure the definition of need recognizes the public’s critical interest in reliable and efficient electricity transmission from a diverse generation portfolio in one part of the region to growing load centers in another, even if neither the generator nor the loads to be served are located within the state.
“- Create mechanisms that encourage regional and national transmission planning regimes to work together to ensure resources are used efficiently during construction of new transmission facilities.
“- Conduct regular, periodic planning to assess strategic needs for transmission infrastructure and to assure that proposals are consistent with those needs.
“- Create timelines that are long enough for proposals to be thoroughly reviewed but short enough to assure that a decision is issued within a reasonable time.
“- Accelerate reviews for projects in National Interest Electric Transmission Corridors designated under the Energy Policy Act of 2005 and other corridors designated pursuant to state and regional plans.
“- Create a level regulatory playing field that does not favor investor-owned utilities or other entities at the expense of other transmission developers.
There is a need for a coordinated, rational approach to transmission project siting that accommodates the need to assure protection of environmental and other critical interests, incorporates ample opportunity for input from stakeholders, allows for reasonable recovery of costs and places a priority on the compelling interests in modernizing the transmission grid. A multistate approach, through an interstate compact or the adoption by each state of a model siting regime, will facilitate the development and transmission of renewable energy to meet the demands of ever-growing western urban areas and to secure robust interconnections with the national transmission grid.
James Holtkamp is the manager of the Global Climate Change Practice Group and former manager of the Environmental Compliance Group at Holland & Hart. Reach him at 801-799-5847 or firstname.lastname@example.org.
Mark Davidson is a partner in Holland & Hart’s Denver office. Reach him at 303-295-8572 or email@example.com.
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