The impact of expanding renewable-energy development in the Southwest is changing laws, regulatory policy and the economy in many states. But building the transmission infrastructure needed to deliver wind and solar power generated in rural parts of the region to its load centers and to California remains a challenge—one that experts speaking at Law Seminar International’s annual Electric Power in the Southwest conference hope will become easier to meet.
The prospect of storage and microgrids to address the perennial issues of grid reliability and security were also favorite topics at the conference, held in Santa Fe, New Mexico July 14 and 15.
Panelists at the conference agreed that distributed resources, storage and improved technology are evolving rapidly, but will not likely diminish the need for more and better transmission in the near term. Transmission will also be essential for bringing distributed resources to regional markets, which are themselves rapidly expanding and evolving as new resources come on line, panelists said.
Alan Statman, a Santa Fe energy attorney and founder of Trans-Elect, an independent transmission company in Reston, Virginia, cited a report from the nonprofit trade association WIRES that estimates a need for increased transmission investment from the present $15 billion a year to $22 billion by 2030 and $40 billion from 2031 to 2050 as increased electrification and electric-vehicle use spur demand.
Bureaucratic hurdles transmission projects face at the state and local levels will likely eclipse investment challenges on the path to this clean-energy future, and may even thwart the ambitious goals that emerged from state legislative sessions across the West this year (see CEM Nos. 1531 , 1536 [16.1] and 1538 ).
Noah Long, legal director for the Western Energy Project of the Natural Resources Defense Council, told conference attendees during his presentation that this year’s state legislative sessions represent the “fastest revolution I’ve seen in a single year from a state policy perspective.”
Federal policy regarding transmission is likely to affect renewable-energy goals throughout the region, speakers at the conference agreed. The Federal Energy Regulatory Commission modified its transmission incentive policy and eliminated a technology incentive in 2012. FERC is currently reviewing comments on a March 21 inquiry regarding potential improvements to that policy (see CEM No. 1531 ). The aim of the inquiry is to examine whether incentives should continue to be based on a project’s risks and challenges or instead on the benefits it would provide. Reply comments are due July 26.
The U.S. Environmental Protection Agency is also considering changes that could affect federal transmission and land-use policy. Judicial rulings, including decisions in the Pacific Gas & Electric bankruptcy proceeding, also stand to affect energy policy at the national level, speakers said.
“Building transmission isn’t hard,” Bob Busch, an engineer by training and chairman of the New Mexico Renewable Energy Transmission Authority, told the conference audience. Financing for transmission projects does not present a major hurdle either, he said. “We could easily build 10 GW of wind in New Mexico.”
Siting the lines across vast swaths of open desert and plains—and the regulatory and political burdens associated with that siting—is where transmission projects run into trouble, Busch told the audience. As an example, he pointed to NMRETA’s 140-mile, 345-kV Western Spirit transmission line, co-developed with Pattern Development of San Francisco and purchased by Public Service Company of New Mexico for $285 million May 1 (see CEM No. 1537 [19.1]).
Western Spirit runs through land owned by 430 individual property owners, Busch said during his presentation. In some cases, it is all but impossible to figure out who owns a given parcel and equally difficult to get rights of way through the parcel without that knowledge.
These challenges—along with landowner opposition and a tendency by the news media to promote a “David versus Goliath” narrative lead to permitting that takes years and costs millions. “Ten years is not an unrealistic estimate for a brand-new transmission project.”
Statman summarized 10 transmission projects, including Western Spirit, in varying states of development that, taken as a whole, would reach from western Texas as far north as Wyoming, crossing all the states in between to deliver power to load centers in Arizona, Nevada and California. Together, these projects will comprise around 2,000 combined miles of 345-kV and 500-kV line to help Western states meet ambitious renewable and carbon-free energy goals while delivering some of the lowest-cost power anywhere.
Joseph Taylor, manager of transmission access for Xcel Energy subsidiary Colorado Public Service in Denver, said the company has had recent success building transmission in the Southwest through its Power for the Plains project. Taylor said Xcel has built about 1,300 miles of transmission in its Southwest Public Service territory that serves eastern New Mexico and western Texas, and has 200 miles to go to complete the project. SPS is part of the Southwest Power Pool regional transmission organization that connects to the Eastern rather than the Western Interconnection. The new transmission will help deliver power from SPP’s best wind resources in New Mexico, Texas and Oklahoma to load centers in the East.
Taylor conceded that developing transmission on or near land that has already been permitted for oil rigs and is owned by people familiar with that permitting process has been a tremendous advantage in the area. Many of the projects were also developed in Texas-designated Competitive Renewable Energy Zones, he said, prompting some in the audience to speculate about the possibility of developing similar policies that could fast-track projects in other states or even at the federal level.
Statman hopes FERC will use the March inquiry and review of its transmission incentives as an opportunity to make the technology adder more user-friendly. “Technology is constantly changing while the business of building transmission is long and arduous,” he said.