Opinion

THE POWER GRID AMERICA NEEDS

IMAGINE if the nation’s transportation infrastructure had been designed to serve only small regions, with wheat from Iowa easily reaching bakeries in Des Moines but not New York or computer products from the Silicon Valley easily reaching stores in Los Angeles but not Chicago. Costs of goods would vary widely among regions, and the economy would suffer.

Welcome to the world of electricity, where separate transmission systems – the “transportation” infrastructure of electricity – built by local utilities for local customers now serve as a national network.

While not a “third-world transmission system,” as some said after the huge East Coast blackout in 2003, the US transmission network is far from being an efficient national-delivery system. It hasn’t seen significant investment for more than 30 years, wasn’t designed to support today’s electricity markets and isn’t adequate to meet the expected growth in demand.

The lack of sufficient transmission capacity makes it harder to bring online renewable electricity sources like wind and solar. The best sites for utility-scale wind or solar farms typically are in regions with few population centers and not enough transmission access to move the energy to areas of demand. To supply 20 percent of America’s electricity needs with wind by 2030 (a target often mentioned by legislators) and deliver that electricity to areas of demand, America needs 19,000 more circuit miles of extra-high-voltage transmission.

The Department of Energy projects that US electricity sales will rise between 18 percent (with low growth) to 39 percent (with high growth) from 2006 to 2030, even with current efficiency efforts. Much of the growth will come from the commercial sector. Residential use will also grow, as the population shifts to warmer regions needing air-conditioning.

The DOE anticipates the need for 263 gigawatts of new generating capacity by 2030 to meet rising demand and offset the loss of existing generation through retirement; 263 gigawatts equal about a quarter of what America generates now.

Today’s transmission grid can’t meet tomorrow’s needs. Obviously, we must build more capacity.

American Electric Power is partnering with several utilities on much-needed transmission projects in different regions. But it isn’t a simple process.

Unlike interstate natural-gas pipelines, which require only federal approval for siting and construction, federal and state governments share jurisdiction over electricity-transmission lines. This creates significant regulatory hurdles and the likelihood of lengthy litigation.

An interstate natural-gas pipeline often can be proposed, sited, approved and built in two years or less. Most new electricity transmission lines need at least six years, but many projects take much longer.

American Electric Power needed 16 years to finish a 90-mile transmission project in West Virginia and Virginia. It took more than 13 years to gain regulatory approvals and complete litigation, followed by less than three years of construction to bring the line into service in 2006.

After the 2003 blackout, Congress attempted to address the nation’s need for transmission investment. The Energy Policy Act of 2005 kept the shared federal-state jurisdiction for transmission but lets the feds step in should a needed project get bogged down at state level. This was a good start, but more is needed.

Different types of transmission lines lend themselves to differing federal and state responsibility for determining regulation, planning and cost allocation.

Extra-high-voltage transmission lines (300 kilovolt and above) are similar to interstate natural-gas pipelines. They move huge quantities of energy hundreds of miles and benefit large, multistate areas, facilitating interstate commerce. This is a federal responsibility; the Federal Energy Regulatory Commission should have jurisdiction, including siting, for all extra-high-voltage transmission projects.

Transmission lines below 300 kilovolts make up the majority of transmission in America and primarily benefit smaller regions, so shared federal-state jurisdiction over these lines should continue.

Like highways, pipelines and sewer systems, transmission is critical infrastructure – but it gains attention only when it isn’t working. Today’s transmission network won’t meet tomorrow’s needs without significant new investment.

But our regulatory environment discourages that investment, a situation that Congress must address. It doesn’t require federal funding, just clear federal oversight for siting of interstate transmission.

Michael G. Morris is chairman, president and CEO of American Electric Power.