The Electric Grid at a Crossroads: A Regional Approach to Siting Transmission Lines
61 Pages Posted: 29 Sep 2014 Last revised: 9 Jun 2015
Date Written: September 27, 2014
The current regulatory framework for approving long-distance, interstate electric transmission lines does not match the physical aspects of the interstate electric grid, regional electricity markets, or the growing but dispersed renewable energy sources increasingly used to power the grid. Despite the interstate nature of the electric grid and electricity markets, the states have virtually complete authority over the siting and permitting of interstate transmission lines. Continuing state authority over the development of the interstate transmission grid is puzzling when compared to the nation’s network of interstate natural gas pipelines, for which regulatory authority was transferred to the federal government in the 1940s. The question for this article is whether the history surrounding the transfer of regulatory authority over interstate natural gas pipelines can be instructive in planning for the future of the electric grid. This article shows that that there was a moment in time in the 1940s when natural gas, which for a century had been limited in its commercial use because of lack of transportation from well sites to cities, became a critical energy resource for the entire nation. At that time, Congress responded by creating a federal regulatory process to build the interstate pipeline network necessary to transport this resource after state regulatory authorities had blocked such pipelines. This article then suggests that the electric grid is nearing a crossroads that justifies a similar shift in regulatory authority over the grid, although not necessarily using the same framework Congress created for siting interstate natural gas pipelines. Instead, this article proposes a regional model for siting interstate transmission lines rather than the purely federal approach used for interstate natural gas pipelines. It sets forth various options for regional siting approaches, including granting Regional Transmission Organizations (RTOs) siting authority over interstate transmission lines within their footprints; interstate compacts under the Energy Policy Act of 2005 to create separate, regional siting authorities; and federal mandates on state public utility commissions and courts to consider regional benefits and needs in making siting and eminent domain determinations.
Keywords: electric transmission lines, preemption, natural gas, electricity, energy policy act, regional transmission organizations, RTOs, ISOs, energy, energy transportation, natural gas pipelines, electric transmission lines, natural gas act
JEL Classification: K32, K23, K11, L94, L91, L95
Suggested Citation: Suggested Citation