By: Davis Strobridge, Senior Regulatory Analyst, ITC Holdings Corp.
In an increasingly interconnected world, national security extends beyond traditional defense capabilities. Energy security, often discussed in the context of geopolitical tensions and supply disruptions, has, and will continue to be, one of the central national security issues facing the United States for the next decade and beyond.
Historically, our nation’s energy policy playbook has been defined by a plodding posture and dependence on unpredictable foreign countries for imports (i.e., oil). More recently, the cyber and physical threat landscape for our most critical energy assets has grown increasingly daunting, as our adversaries are well-funded, aggressive, and extremely sophisticated. To make matters even more complicated, a dangerous enemy and destabilizing force has arrived on our doorstep: climate change.
While these challenges are complex, America is amidst an energy revolution, and we have a once-in-a-generation opportunity to control our destiny and realize an energy independent economy. One piece of overlooked infrastructure holds the key: high-voltage electric transmission.
Empowering America’s Energy Independence
As the U.S. adapts to evolving security challenges and an unprecedented energy transformation, investing in the strength and resilience of our transmission grid is paramount. The high-voltage transmission grid, which was originally planned to deliver electricity from local fossil fuel plants to nearby customers, is antiquated and outmatched. Largely built in the 1960s and 70s, the grid was not designed to meet modern demands like the simultaneous proliferation of remotely located renewable energy resources, electrification of our economy, catastrophic extreme weather events, and emerging physical and cyber threats. Moving forward, our ability to quickly develop transmission lines that span multiple states (i.e., regional) and connect neighboring regions (i.e., interregional) will determine whether the grid remains reliable to support economic activity and keep pace with international competitors.
This energy independent future will not be realized unless the rules and regulations governing transmission development are modernized.
However, building transmission infrastructure in this country, and particularly the regional and interregional lines we need, is a near herculean task due to outdated regulations and planning processes. In fact, it takes an average of seven years from planning a project to placing it into service. To complicate matters further, some have recently politicized transmission and wrongfully characterized it as a tool solely needed to achieve climate objectives. Indeed, transmission is a necessary precondition for integrating vast amounts of renewables and achieving decarbonization, but it is no one-trick pony.
Our energy future requires a determined bipartisan effort to rethink the strategic value of the grid, the benefits it provides, and how crucial it is to our everyday lives. Expanding regional and interregional transmission capacity provides our nation with a security blanket by leveraging geographic and weather diversity to carry electricity from one region to another during adverse operating conditions (e.g., arctic blasts, heat waves, etc.). Redundancies and strengthened transmission ties not only make it increasingly difficult for our adversaries to carry out cascading physical and cyber-attacks, but also reduces the potential of high-cost, weather-related power outages and the prolonged duration thereof. A modernized transmission grid makes America resilient.
The opportunity to enhance U.S energy security through energy infrastructure development cannot be understated. As the implementation of the Infrastructure Investment and Jobs Act (IIJA) continues, and clean energy tax policies under the Inflation Reduction Act (IRA) are commercialized, the transition to renewable energy sources and electrification of the U.S. economy – from transportation to our industrial processes – will rapidly accelerate. Simultaneously, conventional generation resources, namely coal-fired plants, are retiring at a faster pace than even the most ambitious projections. To reliably accommodate this shift, new large-scale transmission projects are needed to unleash our domestic energy potential and balance the high levels of renewable energy moving through the grid. At the same time, these strategic investments will support electrification-driven demands, particularly in the transportation sector, to significantly reduce our dependence on volatile foreign oil markets.
This energy independent future will not be realized unless the rules and regulations governing transmission development are modernized. If successful, the U.S. is positioned to remain a world leader and will no longer have to balance our international relations and national security goals with domestic energy needs. This means prioritizing investments in transmission can be as American as baseball, hot dogs, and apple pie.
A No Regrets Strategy
To address the urgent reliability and security challenges at hand, we must change the way we plan and pay for transmission. Fortunately, we know what works.
The transmission planning process, which is overseen by the Federal Energy Regulatory Commission (FERC), has always had a “let’s wait and see” bias. This means near-term local needs are identified reactively and the appropriate transmission solution is constructed to ensure the lights stay on. While adequate for a past era, this approach is wholly insufficient to reliably accommodate the rapidly changing energy landscape. To address the urgent reliability and security challenges at hand, we must change the way we plan and pay for transmission. Fortunately, we know what works.
In the absence of federal leadership or regulatory requirements, the Midcontinent Independent System Operator (MISO) region has been the posterchild of a “no regrets” long-term transmission planning approach aimed at ensuring a reliable and cost-effective energy transition. This means transmission expansion decisions in the region have been based on what the future energy landscape will be, and at the most cost-effective price for customers. Last year, in collaboration with stakeholders, MISO proactively developed the largest transmission plan in U.S. history ($10.3 billion), which will support 53 GW of renewable energy resources and provide benefits of approximately $37 billion to customers.
We have seen the sobering impacts of insufficient interregional transmission capacity during climate-driven weather patterns, most notably in Texas during Winter Storm Uri that resulted in more than 200 deaths due to the loss of electricity and cost upwards of $300 billion. This is not acceptable in today’s America.
Unfortunately, success stories like MISO are few and far between, largely due to the outdated transmission policy regime. But FERC has the opportunity to effectuate change and replicate MISO’s planning efforts across the country by finalizing the pending proposed rule on transmission planning and cost allocation. A strong final rule will ensure regional transmission is proactively developed on a regular basis and customers get the most bang for their buck.
But more must be done. Given the increase in emergency operating conditions, there is a pressing need for FERC to strengthen interregional transmission planning requirements, which includes the establishment of a minimum transfer requirement to ensure enough power can be shared from region-to-region during times of distress. We have seen the sobering impacts of insufficient interregional transmission capacity during climate-driven weather patterns, most notably in Texas during Winter Storm Uri that resulted in more than 200 deaths due to the loss of electricity and cost upwards of $300 billion. This is not acceptable in today’s America. FERC must prioritize upfront investments in resilience and coalesce around the notion that it is impossible to quantify the cost of an event that doesn’t happen—in both economic and human terms.
The Greater Grid
As the CEO of my company Linda Apsey recently stated in testimony before the U.S. Senate Budget Committee in July, “The investment we make in transmission, as well as the regulatory and policy environment our leaders create, will determine whether the next chapter in America’s energy security story is a successful one.” Only by recognizing the critical role of transmission and embracing a comprehensive modernization of the grid can we fortify our energy security and realize a resilient, electrified, and sustainable energy future.
Davis Strobridge is a Senior Regulatory Analyst for ITC Holdings Corp., the largest independent transmission company in the United States, and Energy Security Fellow at Securing America’s Future Energy