Expanding the U.S. Electric Transmission and Distribution Grid to Meet Deep Decarbonization Goals
| Date | 01 September 2017 |
| Author |
9-2017 NEWS & ANALYSIS 47 ELR 10749
A R T I C L E S
Expanding the
U.S. Electric
Transmission and
Distribution Grid
to Meet Deep
Decarbonization
Goals
by Alexandra B. Klass
Alexandra B. Klass is the Distinguished McKnight University
Professor at the University of Minnesota Law School.
is Article, excerpted from Michael B. Gerrard &
John Dernbach, eds., -
(forthcoming in 2018
from ELI), addresses the critical role of the elec-
tric transmission and distribution grid in achieving
deep decarbonization, and discusses the primary
federal and state laws that govern expanding the
grid. Although signicant legal and political barri-
ers exist to creating the new transmission necessary
to meet deep decarbonization goals, there are public
law and nonpublic law tools available to surmount
these barriers. Moreover, technology developments in
energy storage, demand response, distributed energy
resources, and the smart grid can both improve the
existing grid and reduce the extent of grid expansion
required for deep decarbonization.
I. Introduction
is A rticle discusses the role of the electric transmission
and distribution grid in achieving deep decarbonization.
It begins with an introduction to the electric grid itself
and the primary actors that maintain the grid. It then dis-
cusses in general terms the additional electricity transmis-
sion, distribution, and energy storage needs to accomplish
the goals of deep decarbonization in the United States. In
doing so, it draws on materials in the
reports pub-
lished in November 2015,1 as well as additional reports pre-
pared by the U.S. Department of Energy (DOE) and other
experts that have evaluated ways to decarbonize the U.S.
economy and modernize the electric grid. e Article then
moves to a discussion of the primary federal and state laws
that govern electricity transmission and distribution and
the eect of those current laws on deep decarbonization
eorts. Final ly, it ends with a discussion of potential new
public and private law approaches to achieving deep decar-
bonization goals relevant to the electric transmission grid.
II. The Electric Transmission Grid
e U.S. electric transmission grid is a complex network of
electricity generation, transmission, and distribution that
delivers nearly 4,000 terawatt hours of electric energy gen-
erated from about 7,000 operational power plants in the
United States over 642,000 miles of high-voltage transmis-
sion lines and 6.3 million miles of low-voltage distribution
lines to nearly 160 million residential, commercial, and
industrial customers.2 e electricity generation compo-
nent of t he grid consists of generating plants powered by
coal, natural gas, oil, nuclear energy, hydropower, wind,
solar, and other renewable energy resources. As of 2016,
fossil fuel plants (coal, oil, natural gas) made up approxi-
mately 64% of total U.S. generation, nuclear energy pro-
vided 20%, hydropower was 6%, and other renewable
energy resources such as wind, solar, and geothermal
energy contributed nearly 8% of the total.3
1. J H. W ., US 2050 R: P D
D U S (2015) [hereinafter US 2050
R].
2. U.S. Dep’t of Energy, Q E R: E
T, S, D I 3-4 (2015)
[hereinafter QER R]. U.S. Energy Info. Admin.,
,
https://www.eia.gov/tools/faqs/faq.cfm?id=65&t=2 (last updated Dec. 1,
2016); U.S. Energy Info. Admin.,
, http://www.eia.gov/electricity/annual/html/epa_04_01.
html (last visited June 29, 2017).
3. U.S. Energy Info. Admin.,
, https://www.eia.gov/tools/faqs/faq.
php?id=427&t=3 (last updated Apr. 18, 2017).
Copyright © 2017 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.
47 ELR 10750 ENVIRONMENTAL LAW REPORTER 9-2017
e high-voltage transmission system carries this energy
from power plants to electric substations near load centers
(i.e., population or industrial centers) where the voltage is
“stepped down” so it can be transferred to the more numer-
ous low-voltage distribution lines that supply power to
homes, businesses, and industrial facilities. e vast major-
ity of high-voltage transmission lines are alternating cur-
rent (AC)—facilitating easy voltage conversion—although
some are direct current (DC), which has higher per-mile
eciency and the ability to transfer power between the
three U.S. electric interconnections.4
Large investor-owned utilities, along with municipal
utilities, rura l electric cooperatives, and federal power
authorities (such as Tennessee Valley Authority and Bonn-
eville Power Administration), often own a nd manage
both electric generation facilities (i.e., power plants) and
transmission and distribution facilities.5 Investor-owned
utilities, also k nown as “electric utilities,” are regulated by
state public utilities commissions (PUCs) with regard to
price and other aspects of service in exchange for receiv-
ing a state-granted monopoly to provide electricity service
within a given city or other geographic footprint.
In recent years, however, other private companies known
as “independent power producers” have begun to own
and manage a signicant percentage of generation plants.
Unlike electric utilities, independent power producers do
not have retail customers, but simply produce power for
resale. Likewise, “independent transmission companies”
and “merchant transmission line companies” have begun
to participate in markets to provide long-distance trans-
mission service to electricity generators and distributors.6
4. e U.S. electric grid consists of three interconnections—or power
networks—that operate independently from each other with limited
transfer of power between the interconnections. ese interconnections are
the Eastern Interconnection, the Western Interconnection, and the Electric
Reliability Council of Texas (ERCOT), which covers most of the state of
Texas. Within each interconnection, power ows freely and “helps maintain
the reliability of the power system by providing multiple routes for power to
ow and by allowing generators to supply electricity to many load centers.
is redundancy helps prevent transmission line or power plant failures
from causing interruptions in service.” Sara Ho,
, U.S. E
I. A., July 20, 2016, https://www.eia.gov/todayinenergy/detail.
php?id=27152.
5. With regard to electricity generation, investor-owned utilities provide 38.7%
of total U.S. generation, non-utility generators provide nearly 39.9%,
publicly owned (i.e., municipal) utilities 10%, federal power agencies 6.4%,
and electric cooperatives 5%. A P P A’, 2015-
2016 A D S R 28, available at http://
www.publicpower.org/les/PDFs/USElectricUtilityIndustryStatistics.pdf.
6. Merchant transmission line companies do not own generation assets and
do not sell electricity at retail to customers. Instead, they are simply in
business to build and operate the transmission lines and obtain revenue
solely through the contracts they make with generators and purchasers of
energy through the lines. Because these contracts are for the transmission
of electric energy in interstate commerce, the Federal Energy Regulatory
Commission (FERC) regulates the contract rates under the Federal Power
Act. Independent transmission line companies generally operate the same
way except that in some states, they are able to obtain status as a transmission-
only public utility and obtain rate recovery from retail customers under
state law. , e.g., Alexandra B. Klass & Jim Rossi, Revitalizing Dormant
, 100 M. L. R.
129, 150 (2015); Alexandra B. Klass,
, 48 U.C. D L. R. 1895,
1925-26 & n.160 (2015).
Managing the reliability and security of the electric
grid is a herculean task. At t he present time, energy stor-
age options for electricity are limited, which means t hat
there must be enough, but not too much, electricity ow-
ing through the grid at every moment, maintained at an
appropriate voltage, that can be dispatched to customers
on demand. If these conditions are not met, blackouts or
brownouts can occur and the grid does not ser ve its func-
tion of providing safe and reliable electricity.7
Following the Energy Policy Act of 2005 (EPAct 2005),
the Federal Energy Regulatory Commission (FERC)8 des-
ignated the nonprot North American Electric Reliability
Corp. (NERC) as the entity responsible for overseeing
grid reliabilit y and security for the United States.9 NERC
establishes minimum standards for operating the bulk
transmission system, sets contingencies t hat grid owners/
operators must meet to ensure system reliability, and oth-
erwise engages in planning and monitoring activities.10
NERC delegate s many of its reliability responsibil ities to
“regional entities” (REs) that propose reliability standards
to NERC a nd, u ltimately, to FERC for approval.11 ese
reliability standards consist of rules governing power plant
operators and transmission line operators designed to
protect infrastructure, ma intain adequate power supply,
and prevent cyber attacks and other security breaches.12
FERC and NERC have enforcement authority and c an
impose penalties on utilities and other grid pa rticipants
for noncompliance.
Electricity markets consist of wholesale markets—where
utility and non-utility generators sell power to utilities and
other electricity providers for resale—and retail markets—
where utility and non-utility electricity providers sell power
to residential, commercial, and industrial end-users. FERC
regulates wholesale electricity ma rkets under the Federal
Power Act,13 and states, through PUCs, regulate retail
7. Yuri V. M ., P N N L,
A M B A C
H P V G 1.1 (2010) (PNNL-19229),
available at http://www.pnl.gov/main/publications/external/technical_
reports/pnnl-19229.pdf.
8. FERC has congressional authority under the Federal Power Act to regulate a
wide range of energy resources and industries, including wholesale electricity
sales and interstate transmission of electricity. FERC is an independent
regulatory agency with ve commissioners appointed by the president
with the advice and consent of the U.S. Senate. Each commissioner serves
a ve-year term, and no more than three commissioners may belong to
the same political party. Fed. Energy Reg. Comm’n, ,
http://www.ferc.gov/about/ferc-does.asp (last updated May 24, 2016); Fed.
Energy Reg. Comm’n, Commission Members, http://www.ferc.gov/about/
com-mem.asp (last updated Feb. 3, 2017).
9. NERC, H NERC (2013), http://www.nerc.com/AboutNERC/
Documents/History%20AUG13.pdf.
10. NERC, , http://www.nerc.com/AboutNERC/Pages/default.
aspx (last visited June 29, 2017).
11. NERC, , http://www.nerc.com/AboutNERC/keyplayers/Pages/
default.aspx (last visited June 29, 2017); Hari M. Osofsky & Hannah J.
Wiseman, Hybrid Energy Governance, 2014 U. I. L. R. 1, 36, 41-44
(2014).
12. NERC, , http://
www.nerc.c om/pa/stan d/Pages/Reli abilityStan dardsUnitedSt ates.aspx?
jurisdiction=United%20States (last visited June 29, 2017).
13. Under the Federal Power Act, FERC has jurisdiction to regulate wholesale
sales of electric energy in interstate commerce and the transmission of
electric energy in interstate commerce. 16 U.S.C. §824(a) (1935).
Copyright © 2017 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.
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