SSG-WI Planning Working Group/ Technical Support Group Joint Meeting Portland, OR
Status Report on Designation of National Interest Transmission Constraints
Larry Mansueti Office of Electricity Delivery and Energy Reliability U.S. Department of Energy www.electricity.doe.gov May 3, 2005
Transmission: Uncertainty and Under-Investment
Chronic Under-Investment in Transmission No Forcing Function for Change Public Interest at Risk
Annual Average Growth RatesPeak (GW) Transmission (GW-miles) Summer in U.S. Transmission Capacity and Peak Demand
3
• Industry structure– who will build/own/operate new transmission? • Financial risks and
• Economic growth and jobs creation • Consumer electricity bills • Public health and safety
2.5
Growth Rate (%/year)
2 1.5 1 0.5
regulatory uncertainties
• States - “Patchwork quilt” • Federal – legislative logjam • Protracted siting and
• Environmental protection
• Energy security and reliability
0 1992-2002 Transmission (GW-miles) Summer Peak (GW) 2002-2012
permitting processes • Utility RD&D in decline
Source: Hirst, E. “U.S. Transmission Capacity: Present Status and Future Prospects.” June 2004.
Note: National trends only. Regions vary on transmission investment trends.
Grid Modernization – A National Energy Priority
“To keep our economy growing, we also need reliable supplies of affordable, environmentally responsible energy. Nearly four years ago, I submitted a comprehensive energy strategy that encourages conservation, alternative sources, a modernized electricity grid and more production here at home, including safe, clean nuclear energy.” State of the Union, February 2, 2005 “Transmission lines and pipe lines and generating facilities are deteriorating. Different regions share electricity over unreliable transmission lines. These strains on the system lead to higher prices and they lead to bottlenecks in delivery. …we've got modern interstate grids for phone; we've got a modern connection with our highways; America needs a modern electricity grid, too, in order to make sure that we can compete in a global economy…” March 9, 2005
“We need an energy bill that will help us modernize our domestic energy infrastructure. In
some parts of the country, homes and businesses are receiving 21st century power through infrastructure built decades ago. Transmission lines and pipelines and generating facilities are deteriorating here in America. Different regions share electricity over unreliable transmission lines. And these strains on the system are leading to higher prices, bottlenecks in delivery and inefficient use of energy, which we can no longer afford. And just when one piece of the power grid fails, the result can be darkness across the map, as we learned a couple of years ago.” April 20, 2005 “New technologies such as superconducting power lines can help us bring our electrical grid into the 21st century, and protect American families and businesses from damaging power outages. We have modern interstate grids for our phone lines and our highways. It's time for America to build a modern electricity grid. The electricity title is an important part of the energy bill.” April 27, 2005 President George W. Bush
Bush Administration Electricity Policy Guidance
May 2001
May 2002
September 2002
All are available under “History” at electricity.doe.gov
April 2004
DOE Office of Electricity Delivery and Energy Reliability
Kevin Kolevar, Director
Resource Management Staff Research & Development Transmission Reliability Electric Distribution Transformation Electricity Storage Superconductivity GridWorks GridWise Infrastructure Security Technology Visualization and Decision Analysis Tools
Permitting, Siting, & Analysis
Electric Markets Technical Assistance Modeling and Analysis Electricity Exports/ Presidential Permits Power Marketing Administration Liaison
Infrastructure Security & Energy Restoration Energy Infrastructure Protection State/Local Gov’t Partnerships Training and Exercises Visualization Critical/Vulnerability Assessment Emergency Response support
Bill Parks
David Meyer, Acting
Alex de Alvarez
Major Grid Congested Paths, 2002
Source: National Transmission Grid Study, DOE
Designation of National Interest Electric Transmission Constraints
Called for in President’s National Energy Policy and National Transmission Grid Study Delayed by blackout investigation and funding limits Purpose: designation will focus industry, Wall Street, and state and regulator interest in relieving a constraint DOE to designate regardless of Congressional energy bill fate
www.electricity.doe.gov/bottlenecks
Designation of National Interest Electric Transmission Constraints – 2004 Notice and Comment
Public Meeting in Salt Lake City Utah July 14, 2004 Following NARUC Summer Meeting Federal Register Notice Comment Period closed 9/20/04 Over 45 comments received. Summary on website.
A plan, based on the comments, under senior management review
www.electricity.doe.gov/bottlenecks
Designation of National Interest Electric Transmission Constraints
DOE wants to add value to existing planning and siting processes, build on others’ efforts Cooperative working relationship with RTO’s and other regional transmission planning efforts essential Energy bill directs DOE to designate constraints, with FERC given “backstop siting authority” on DOE-designated constraints. DOE currently has chosen to wait for Congress
www.electricity.doe.gov/bottlenecks
Regional Interconnection Policies
Administration: “…[f]ully supports the goal of regional coordination and planning through the mechanism of voluntary regional transmission organizations…” Federal Energy Regulatory Commission: “Healthy and well-functioning wholesale power markets are central to the national economy and …regional, independent operation of the transmission system, with proven market rules in place, is the critical platform for the future
success of electric markets.”
U.S. Congress (pending legislation): “It is the sense of Congress that…all transmitting utilities in interstate commerce should voluntarily become members of Regional Transmission Organizations.” But… “No final [FERC] rule mandating a standard electricity market design…may take effect before December 31, 2006.”
Regional Perspectives Needed
Because wholesale markets span multi-state areas…
Regional-scale approaches are needed for: Determining resource needs Ensuring resource adequacy Achieving public acceptance of new projects Accomplishing resource acquisition Improving the investment climate We need to find new ways to encourage multi-state collaboration, showcase best practices, and share “lessons learned”
Questions?
Lawrence.Mansueti@hq.doe.gov
David.Meyer@hq.doe.gov
Poonum.Agrawal@hq.doe.gov Julia.Souder@hq.doe.gov
www.electricity.doe.gov