Why we should care about this FERC rule

For Colorado to get to 100% clean energy it needs transmission. This will help.

by Allen Best

The Federal Energy Regulatory Commission announced a new rule the New York Times described as the “most significant attempt in years to upgrade and expand the country’s creaking electricity network.”

The proposed rule, already two years in the making and not expected to be finalized for two or three more years, would require grid operators around the country to identify needs 20 years into the future, taking into account factors like changes in the energy mix, the growing number of states that require wind and solar power, and the risks of extreme weather.

This new rule comes at a time of growing concern about resource adequacy. The Colorado Energy Office projects an increase of 50% by 2040 in the amount of electricity needed to meet the expanded needs from transportation, building electrification, and other purposes.

But recent winter storms have focused attention on the intermittency of renewables now that they are reaching high levels of penetration.

If Colorado (and the nation) are to achieve their emission-reductions goals, new transmission will be absolutely necessary. But it does take time.

Duane Highley, chief executive of Tri-State Generation and Transmission, applauded the rule.

“I haven’t read the 1,300 pages yet, so I’ll have to say I’m a little bit uninformed, but from what I’ve read of other people who have supposedly read it, it appears to address some of these questions about cost allocation,” he said on a May 28 webinar sponsored by American Clean Power. “I’d say we totally applaud the idea of getting some regional transmission built and have it allocated as broadly as possible.”

Maury Galbraith, director of the Colorado Electric Transmission Authority, similarly admitted to having reading to do but welcomed the FERC ruling as something that will improve interregional transmission planning.

“We didn’t do long-distance inter-regional planning very well” in Western states, Galbraith said. “You couldn’t make it any worse. It was as bad as it could get.”

Xcel Energy, Tri-State, and other utilities do an excellent job of transmission planning within their service territories.

“That’s what you would expect. That is how the industry developed.”

Xcel, a monopoly utility, and Tri-State, which sort of acted like one until recently, had to meet the demand within their footprints. “And if they go beyond their footprints, particularly if they are regulated by state commissioners, the commissioners look at it whether it’s the least-cost resource for their native customers,” said Galbraith.

The utilities lack strong incentives to look at transmission lines that connect multiple service territories or those that are hundreds and of miles apart.

The result? It’s like traveling from Denver to Salt Lake City before interstate highways. It’s a two-lane highway the whole way.

Both Highley and Galbraith emphasized the need for leveraging geographic diversity as we add renewables.

The Great Plains have lots of wind, the Southwest plentiful sunshine.

“When the wind isn’t blowing we can replace it with solar resources from the Southwest, and vice versa,” said Galbraith.

Even within the context of sunshine, geographic diversity matters.

In his American Clean Power presentation, Highley explained the need. “Let’s face it, the more solar you’re building in an area, the less value it has. At some point you eventually hit your peak demand and now you’re building additional solar that has to be paired with storage or it has no value at all. That just increases the cost. If we can instead move that solar east and west to somebody else who needs it, it’s obviously a good solution for everyone. I would favor the cost allocation as broadly as possible.”

Highley predicted the rule will “benefit people across broad, broad geographic areas, not just from the reliability question, but also from affordability and the ability to move some of this power.”

He also emphasized the value of joining a regional transmission organization — and moving power east and west, not just north and south, as existing RTOs do.

“If you look at the experience that Southwest Power Pool had just east of us and the Eastern grid, they’re now integrating in some hours over 80% wind energy into that grid, which covers 14 or so states. We need that in our system in order to integrate the massive amount of renewables we’re building because there’ll be many, many hours when we have more wind and solar than we have appetite for. And by having a regional organization that moves that power across multiple states and multiple regions, we can balance it out better.

“The build-out of the transmission to make all that work takes years, but we need to get started as quickly as possible. And that’s why we’ve been so much of an advocate for promoting the Western expansion of the Southwest Power Pool. And we believe it’ll be starting up the first quarter of 2026 in our area.”

Still an issue is permitting. “If we don’t do something on the permitting side, it will be the next delay and we really won’t have gained much,” said JC Sandberg, chief advocacy officer at the American Clean Power on a webinar about the new FERC rules.