misaligned cost and benefit allocation; elongated project timelines due to complicated siting and permitting; and lengthy interconnection wait times due to high demand, low bandwidth to process applications, lack of standardization, coordination issues among stakeholders, and lack of innovation in considering solutions such as bundling projects. 26 (For more detailed context, see sidebar “Transmission.”) KEY PRIORITIES Government would need to consider three core issues to expand transmission: planning, cost allocation across jurisdictions, and permitting and siting challenges. 1. Plan transmission to account for the comprehensive range of benefits it can enable . Deficiencies in this area are well documented. For example, transmission is often planned “one line at a time,” as opposed to a more diverse portfolio approach that considers the wide range of regional needs that transmission could address. Furthermore, business cases supporting the build-out of transmission lines typically value only the reliability benefit of the line or the benefit of enabling lower-cost fuels. They often don’t consider easing access to cleaner energy sources, reducing operating and planning reserves, enabling electrification, or ensuring resource adequacy—that is, sufficient power supply to meet demand. In addition, planning doesn’t consider the possibility of melding transmission with other technologies such as storage, which can often significantly reduce costs. One example of successful transmission planning and cost allocation was the decision by the Midcontinent Independent System Operator (MISO) to authorize $10.3 billion in transmission spending through 2030, a notable sum given that the total US annual capital investment today is less than $30 billion. 27 In making the business case, MISO invoked the benefits of reliability,
access to lower-cost energy, resource adequacy, and decarbonization. MISO also studied a portfolio of projects including complementing transmission with storage. (See sidebar “FERC’s Advance Notice of Proposed Rulemaking and ISO Evolutions.”) 2. Align costs and benefits of transmission projects. Some transmission benefits can be difficult to directly allocate to a state. In part, this is because states place different values on transmission, particularly in cases where they have differing decarbonization objectives. And transmission that crosses an entire state could, in some instances, provide larger benefits to the ultimate end state than to the states it crosses through. Some cost-allocation pathways have worked, however. MISO, for example, devised an approach in which benefits greatly exceeded costs for each zone, reducing barriers to transmission build-out. 3. Manage permitting and siting challenges. Large-scale transmission lines can take more than a decade to permit, site, and plan. 28 Important national conversations to devise solutions are under way, and some regional efforts have demonstrated progress. Consider the New Mexico Renewable Energy Transmission Authority (RETA), created to ease the development of electric transmission and storage projects by providing input on project impacts and ensuring that landowners are treated fairly and equitably. RETA was critical in the passage of the recent SunZia transmission project, which provides direct access to renewable resources to up to 2.5 million customers in Arizona and will eventually serve California. 29 One report identified at least 22 other shovel-ready projects that could potentially benefit from similar efforts and enable a 50 percent increase in wind and solar generation from current levels. 30
26 Transmission planning for the 21st century: Proven practices that increase value and reduce costs , Brattle Group and Grid Strategies, October 2021. 27 Reliability imperative: Long range transmission planning , MISO Board of Directors, July 25, 2022. 28 Informing the Transition Discussion , ScottMadden, January 2020. 29 David M. Brown, “$8B SunZia transmission, wind project work to start in 2023,” ENR Southwest , July 27, 2022. 30 Michael Goggin, Rob Gramlich, and Michael Skelly, Transmission projects ready to go: Plugging into America’s untapped renewable resources , Americans for a Clean Energy Grid, April 2021.
Accelerating the journey to net zero
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