ZAP THE SLEEPING GIANT: REVAMPING ORDER 1000 TO FACILITATE DECARBONIZATION ACROSS THE WESTERN UNITED STATES.

AuthorCriswell, Benjamin U.

FORWARD 1302 I. INTRODUCTION 1303 II. THE STATUS QUO OF THE WESTERN INTERCONNECTION 1306 A. Organized and Non-Organized Markets 1308 B. Balkanized Transmission Coordination and Development 1312 C. Uncertainty Regarding Decarbonization Pathways 1314 III. THE SLEEPING GIANT: ORDER 1000 1319 A. Coordinated Regional and Interregional Transmission 1321 Planning B. Transmission Needs Driven by Decarbonization Public 1323 Policy Requirements C. Justifying a Stronger Order 1000 1325 D. Regional Transmission Planning Processes Should Be More 1327 Inclusive, Interregional, and Linked to Decarbonization Public Policy Requirements IV. CONCLUSION 1329 FORWARD

During the editing and publishing of this Comment, the United States enacted legislation and initiated rulemaking processes set to transform the development and management of its electricity transmission facilities. Congress passed the Infrastructure Investment and Jobs Act, which will shape a new era of the U.S. electricity grid. (1) On the administrative law front, the Federal Energy Regulatory Commission (FERC) issued an Advance Notice of Proposed Rulemaking (ANOPR) in July 2021 to revisit its prior rules and consider reforms to improve the regional transmission planning, cost allocation, and generator interconnection processes. (2)

Concurring with the issuance of the ANOPR, FERC Chairman Richard Glick and Commissioner Allison Clements struck a forward-looking and ritical tone:

[W]e believe that the status quo approach to planning and allocating the costs of transmission facilities may lead to an inefficient, piecemeal expansion of the transmission grid that would ultimately be far more expensive for customers than a more forward-looking, holistic approach that proactively plans for the transmission needs of the changing resource mix. A myopic transmission development process that leaves customers paying more than necessary to meet their transmission needs is not just and reasonable. (3) The ANOPR is full of prompts, with FERC asking for input on myriad transmission-related issues. It also invites comment on more specific ideas, such as the potential creation of an "Independent Transmission Monitor" in all regions of the United States to oversee costs and planning of transmission facilities. (4) While much still hangs in the balance, this Comment discusses the history of the electricity grid in the western United States and offers rulemaking suggestions to facilitate a just and equitable transition to a decarbonized electricity grid.

  1. INTRODUCTION

    Many state and local policies require entities to take action to eliminate greenhouse gas emissions by decarbonizing electricity systems in the western United States. (5) Beyond changing the mix of resources generating electricity, meeting these decarbonization targets will require significant yet uncertain changes to transmission systems. (6) FERC is in the process of promulgating rules that could fundamentally change transmission development and management throughout the United States. (7) Western states present unique challenges to this process, but FERC must facilitate these states' decarbonization goals to adhere to its practice of cooperative federalism, (8) obligation to ensure grid reliability, (9) and ultimate responsibility of protecting the "public interest." (10)

    Under the Federal Power Act (FPA), (11) FERC has the authority to facilitate the development of the United States' electricity grid and wholesale electricity markets. (12) In 2011, FERC issued Order lOOO, (13) recognizing the importance of incorporating federal, state, and local "Public Policy Requirements" (14) into regional and interregional transmission planning and coordination. (15) Alas, Order 1000 has failed to live up to its potential. (16) Order l000's shortcomings uniquely shortchange the western electricity grid, which remains a largely balkanized system, (17) and present problems for decarbonization policies (18) and traditional electricity regulation goals alike. (19) By revitalizing Order 1000, FERC could facilitate efficient decarbonization in light of the wide range of potential transmission needs that could result from Public Policy Requirements. (20)

    Part II provides context regarding the varying electricity market, policy, and regulatory dynamics across the western grid, more specifically, the United States portion of the Western Interconnection. (21) The current need for shrewd transmission management is acute--achieving a 100% clean energy grid by 2035 has recently become a mainstream policy ambition. (22) And renewable energy resources are rapidly coming online. (23) The systemic changes necessary to meet deep decarbonization goals will present grid reliability challenges and substantially affect transmission planning and coordination. (24) But, as explained below, the western grid's balkanization complicates decarbonization planning and underscores the importance of Order l000's regional and interregional reach. Part II then discusses some of the major technological changes, specifically around energy storage, that impact decarbonization efforts and will inevitably shape the need for, and optimal use of, transmission capacity in the future. Uncertainty regarding these changes highlights the need for stronger, coordinated transmission planning.

    Part III discusses Order l000's objectives, implementation, and potential to facilitate decarbonization. Unfortunately, Order 1000 has been largely unsuccessful. (25) FERC stopped short of creating more structured processes for one of Order l000's core purposes--facilitating coordinated regional planning to meet the transmission needs of federal, state, and local Public Policy Requirements. (26) Part III continues by discussing why and how FERC should strategically revamp Order 1000. Ultimately, this Comment argues that Order 1000 and future FERC rules hold tremendous, albeit dormant, potential to facilitate decarbonization across the Western Interconnection.

  2. THE STATUS QUO OF THE WESTERN INTERCONNECTION

    The Western Interconnection currently serves over eighty million people with approximately 136,000 miles of transmission lines. (27) As the Western Interconnection has developed, "it has functioned with remarkable reliability." (28) But the Western Interconnection's physical infrastructure, like the United States as a whole, is in dire need of upgrades. (29) The West will likely invest more than $200 billion in its electricity grid by 2030--the question is not whether this money will be spent, but how. (30)

    The West needs to improve its transmission systems to accommodate the necessary and optimal growth in technologies that will enable deep decarbonization. (31) The state policy landscape is promising, with nine out of the eleven states in the Western Interconnection footprint having enacted a renewable portfolio standard or goal. (32) California, Nevada, New Mexico, Oregon, and Washington have committed to 100% carbon-free energy by or before 2050. (33) These state policies represent over fifty-six million people served by the Western Interconnection. (34) Adding to this momentum, at least eighty municipalities within the Western Interconnection have 100% clean energy commitments of their own. (35) These goals are achievable because, with the plummeting costs of solar, wind, and battery technologies, (36) the United States as a whole can achieve 90% carbon-free electricity by 2035 at no extra cost to consumers. (37) Progress toward decarbonization goals is already underway, with the vast majority of proposed electricity generation in the West coming from renewable energy technologies. (38)

    Strategic development of renewable energy facilities and transmission infrastructure will be important to meet decarbonization goals cost-efficiently. In addition, more fluid energy markets could help the West decarbonize its energy systems more efficiently. (39) But no West-wide transmission manager or electricity market exists yet, and the relationship among participants in the Western Interconnection has been historically more physical than financial. (40) Further, institutional inertia and strong incumbency dynamics in the Western Interconnection have influenced the planning, development, and operation of the western grid, in places creating an outdated, inflexible system. (41)

    Ultimately, well-coordinated transmission planning is critically important to decarbonization efforts because of the significant uncertainty and risks associated with decarbonization. (42) Robust transmission planning and coordination can protect consumers against price volatility by allowing greater competition, regional flows of power, and responsiveness to price signals. (43) By contrast, poor planning can saddle ratepayers with upwards of hundreds of billions of dollars without providing any additional value to the grid. (44) The Western Interconnection is particularly vulnerable to cost overruns and inefficiencies because of its balkanization. (45) As explained below, transmission planning occurs with varying degrees of organization and obstruction in the West. And because transmission projects have long lead times relative to generation infrastructure, the importance of effective and efficient transmission planning done in a timely manner that fully embraces decarbonization policies is hard to overstate. (46)

    1. Organized and Non-Organized Markets

      In most of the Western Interconnection, electricity customers and providers do not have access to a regional transmission organization (RTO) or independent system operator (ISO) to purchase and sell power. (47) RTO/ISOs are independent entities that administer transmission grids and wholesale power markets on a regional basis. (48) The California Independent System Operator (CAISO) is the only RTO/ISO fully within the Western Interconnection footprint. However, the easternmost portion (or "seam") of the interconnection abuts two RTO/ISOs: the Midwest...

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