SREA and Pew Hold Regional Transmission Planning Convening in New Orleans

It’s likely you may have heard by now one way or another - the electric power grid is having a moment. There have been countless stories in the media recently that have pointed out the need to build out a grid that meets the reliability challenges of the 21st Century. There’s good news, but unfortunately there's a lot of bad news too. The most prominent story heard lately is that our grid lacks the ability to deliver power when and where it’s needed during extreme weather conditions. Multi-day heat waves and cold weather storms have challenged both the power plants and the grid that we depend on in recent years. It’s something that SREA has been laser focused on in recent years, because an inadequate power grid, that can’t meet the challenges of extreme weather, is also a grid that cannot provide reliable power from renewable energy or battery storage devices. 

Considering this very weighty topic, our organization recently partnered with The Pew Charitable Trusts to discuss transmission planning with decision makers at a ‘Transmission Luncheon’ held at the Sheraton Hotel in New Orleans, Louisiana on March 4th. Our discussions included meetings with state regulators, staff, renewable energy developers, representatives from the grid planning entity known as the Midcontinent Independent System Operator (MISO), and other stakeholders who follow this issue closely. The discussion centered not only around known challenges, but also, most importantly, solutions to the myriad challenges associated with planning a grid that serves the needs of the 21st century. 

What are these challenges and opportunities? None other than the Federal Energy Regulatory Commission (FERC) has been grappling with this question recently in a landmark proposed rulemaking titled ‘Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection’. FERC is the federal government agency charged with the mission of ensuring ‘just and reasonable’ electric rates for electric utility customers across the country. This entails oversight of the multi-state electric transmission system spanning the country, with exception of most of Texas. In their proposed rule issued in April of 2022, they outlined a host of issues that threaten the affordability and reliability of the electric grid, and proposed remedies. Amongst these are: planning for a grid that is far different from our legacy fossil fueled one, ensuring that planning utilitizes forecasts that assesses power generation and demand far into the future, and acknowledging the full benefits of grid investments so that decision makers charged with approving siting and constructions of the grid are equipped with a clear picture of their value.  

In MISO’s case, they have been at the forefront of implementing the types of reforms described in FERC’s proposed rulemaking since launching an effort called the Long Range Transmission Plan (LRTP) in late 2020. LRTP is an effort that incorporates many of the ‘factors’ in FERC’s proposal like changes in the energy resource mix, retirement of resources driven by federal and state law as well as nonbinding targets, increases in energy demand, fuel and technology costs linked to energy resources, as well as utility and corporate goals. Additionally MISO adopted an assessment of transmission needs incorporating these factors over a 20 year time period for LRTP. While many in the electric industry are awaiting a forthcoming final rule from FERC, which utilities and transmission planning entities across the country will need to comply with, MISO is already hard at work on ‘Tranche 2’, their second portfolio of LRTP transmission solutions in the northern portion of the footprint. 

This second iteration is the prelude to planning an LRTP ‘Tranche 3’ in MISO South. SREA’s work with The Pew Charitable Trusts and other stakeholders this year have focused on supporting moving forward with more proactive transmission planning in our region.Potential changes in the energy resource mix became a major story in 2022, in the MISO South area comprising parts of Arkansas, Louisiana, Mississippi and Southeast Texas. In that year alone 70.1GW’s of solar, wind, energy storage and hybrid solar/energy storage resources entered into MISO’s yearly interconnection queue, requesting study for interconnection to their grid. To put this into perspective, MISO South’s record demand was 32.6GW’s during Winter Storm Heather this past January, less than half that amount. In just one year there was enough clean energy awaiting interconnection to the grid, and there are many renewable energy, energy storage, and high voltage transmission projects from previous queue years awaiting interconnection in MISO.  

On the face of it, this seems like tremendous news for MISO South, but the lack of large-scale regional transmission planning like that undertaken in MISO North has resulted in unequal outcomes and costly grid upgrades of up to $100M per project needed in order to connect these resources. As a result, many of these requests could be withdrawn by renewable energy developers because the cost of upgrading the grid in a piecemeal fashion is much more costly in the absence of large regional transmission supports. While both FERC and MISO have weighed in on interconnection reforms recently, there remains tension between developers and grid planners over costs and their responsibility for proactive grid planning. 

This theme of who pays, and whether developers already struggling to break even on clean energy projects should be in charge of paying for large regional transmission is at the heart of discussions currently underway in MISO South. Since there are many benefits considered in MISO’s LRTP process, singling out developers as a monolithic group, devoid of who specifically may benefit, continues to be a point of contention. Also, whether states or jurisdictions with clean energy goals like the City of New Orleans should have to pay more for regional transmission simply because these upgrades will provide a more stable grid for clean energy resources to connect to. 

Over our discussions, if there was one common theme that rose above all else, it was that it takes a village to plan for the grid of the future. There is a common sentiment amongst stakeholders that open dialogue between grid planners, stakeholders and decision makers was crucial in developing a cost efficient grid plan that incorporates the assessment of the full potential of large transmission investments to solve multi-state energy issues. With not only a final FERC planning rule expected in coming months, but also Tranche 3 of LRTP in MISO South, this kind of dialogue will be crucial in planning a grid for the 21st century.