A Clean, Flexible AND Reliable Grid - How We Get There

The BiPartisan Policy Center released a report today called Capitalizing on the Evolving Power Sector: Polices for a Modern and Reliable U.S. Electric Grid.  I am proud to have served as a Co-Chair of the Advisory Group that put the report’s recommendations together, along with Curt Hébert, the former Chairman of FERC for George W. Bush and former Congressman Rick Boucher from Virginia. 

The BiPartisan Policy Center specializes in bringing together diverse groups of stakeholders to explore potential consensus-driven solutions to major policy issues.  In the case of the Grid Initiative, the BPC brought together energy companies, NGOs, public utility commission representatives, regional transmission organizations, academia, technology manufacturers and others, and charged the group with finding commonly acceptable policies to ensure grid reliability and efficiency while facilitating more comprehensive deployment of clean energy resources.  

The transmission grid, often an arcane and slow-changing system of steel in the ground, is evolving at a rate that was hard to imagine even a decade ago.  Federal and state environmental policies and economic trends are changing the playing field.  What was once a grid designed to deliver power from dispatchable, thermal generation resources is becoming, relatively quickly, a more flexible system involving significant penetrations of intermittent renewable energy resources, as well as clean demand response, energy efficiency, distributed generation and other flexible demand-side resources.

The BPC Grid Report provides a roadmap for facilitating this transformation in a manner that satisfies environmental policies, improves grid reliability and results in the most cost-effective options for customers.  The Report’s recommendations include a menu of policy options intended to (1) encourage efficient transmission and distribution investment, (2) enhance planning and coordination across jurisdictions, (3) enable a more flexible and resilient system, and (4) monitor and enhance operational reliability. 

Some of the recommendations I find particularly important are:

• Asking states and FERC to increase the coordination between state resource planning and regional transmission planning, and asking DOE to continue funding for successful interconnection-wide planning.  Increased coordination will avoid increasing the system costs of achieving our clean energy goals reliably.
• Encouraging utilities and states to offer dynamic retail pricing and price responsive demand programs (where they are not already available) so that customers are paying for the true price of electricity at any time of the day and can take control of their electricity use prices based on cost.
• Suggesting an increase in market opportunities for clean demand response – an important component of a flexible grid, which also offers peak load reductions and therefore avoids some new investments in transmission and generation.
• Proposing an improved federal backstop siting authority for interstate transmission lines to replace the authority provided in EPAct 2005 – the authority is linked to transmission lines chosen through an Order 1000-compliant planning process, ensures states have a more significant role in determining the outcome of proposed transmission lines, and provides adequate protection of federal lands.

Most of the recommendations, in some variation at least, have been conceived before.  Most of the recommendations, individually, will not ensure the reliable and cost-effective integration of renewable energy at the scale necessary to reach critical environmental goals while maintaining reliability.  Not all of the recommendations will apply across all regions of the country or at all levels of the system - transmission operations and business models diverge significantly.  And yes, some important recommendations that environmental groups would have included if writing the report alone (most notably, perhaps, the need to solve the puzzle that will allow cost allocation and cost recovery for non-wires transmission solutions) are not included in the final product. 

But the package of recommendations the Grid Report provides is unique both in the comprehensiveness of its substance, and in the list of varied stakeholders that support the proposed policies.  The Grid Initiative didn’t just require folks to reach across the aisle, but to reach over, around, through and under lots of different aisles to learn others’ perspectives and achieve consensus recommendations.  I don’t think any of the stakeholders think every recommendation in the report is perfect, but none let perfect get in the way of the good – and the critical.  This report represents the art of the critically possible.