Why are some members of Congress fighting to prevent modernization of the Power Marketing Administrations' grid?
“America’s continued global competiveness in the 21st century will be significantly affected by whether we can efficiently produce and distribute electricity to our businesses and consumers, seamlessly integrating new technologies and new sources of power” – Secretary of Energy Steven Chu.
Recently 166 members of the House and Senate from around the country wrote to Energy Secretary Steven Chu chastising him for directing the federal Power Marketing Administrations (PMAs) to make their operations more efficient and coordinate their activities better with the other parts of the transmission grid in which they are located. PMAs deliver low cost power to “preference” customers from federal hydroelectric facilities. Most own and operate their own transmission lines while one, Southeastern, contracts for transmission services.
The changes are needed, Secretary Chu wrote, to help reduce costs for PMA customers, make the grid more reliable, secure and hospitable to large injections of renewable resources. But many of the letter's signatories are Democrats with a strong record of support for transmission improvements and renewable energy development. So what gives?
It appears the letter was spearheaded by members of the Pacific Northwest delegation who feared that the proposed changes would increase electricity costs for the so-called “preference customers” in regions served by the PMAs. These customers have benefitted mightily from taxpayer subsidies that have resulted in very low energy costs for decades. Though a part of the Department of Energy, PMAs and their congressional allies have often bristled at the idea that DOE should direct their activities. It looks like many of the signatories to the letter did not fully appreciate the value of the improvements directed by Secretary Chu. After all, in a struggling economy, who wants higher energy costs?
But a closer look at the direction from Secretary Chu reveals that opponents’ fears are unfounded and in fact with regard to costs the reverse is true. Failing to modernize the grid and make it more interactive could increase costs to customers and consumers, make the grid less reliable and more vulnerable, and make integrating the renewable energy resources we need to slow climate change much more expensive. Moreover an uncoordinated grid means duplicative infrastructure will be built and a larger impact felt on the landscape to accommodate unneeded transmission and reserve generation.
Here is a look at the issue:
The grid of the future will not be the grid we have today. Evolving a more flexible and resilient interconnected grid is in the interest of all Americans. The electricity grid has been called the largest machine ever developed, yet it is a machine operated by dozens of utilities and “balancing authorities” in an inefficient, expensive and wasteful way. We can do better, integrating renewable resources while improving system reliability and lowering transmission customer, and ratepayer costs. Environmental organizations, transmission operators, technology advocates and present and former utility regulators support making the grid more coordinated, flexible and reliable by adopting improvements to the way the grid is operated. New FERC rules require many of the same changes from the nation’s utility and transmission operators that Secretary Chu is directing the PMAs adopt. The provisions of Secretary Chu’s recent memo to PMAs are needed to keep service rates low for PMA customers while increasing grid reliability and security and ushering in the new array of home-grown generation resources that are being developed across the nation.
PMAs are a key part of the grid. To keep America competitive, wasteful operational practices on the nation’s electrical grid have to change and PMAs need to be a part of the transition. The PMAs are part of the Energy Department, and are responsible for more than 33,000 miles of transmission that connect with utilities in 20 states, which represents about 42% of the continental United States. They provide service to over 1500 large-scale customers. In the West, home to a vast supply of renewable power from wind, solar and geothermal energy, the Western Area Power Administration (WAPA) infrastructure extends over 15 states, and is crucial for development of efficient, clean, secure and inexhaustible resources. As the rest of the grid modernizes it is imperative that all of its components keep pace. A failure to do so will make the grid—and the PMA’S operations – inefficient, insecure, less reliable and more costly.
Proposed improvements are common sense and inevitable and not a departure from the PMA missions. As the entire grid has aged, so too has the PMA system. Upgrading and replacing aging electricity infrastructure and utilizing new tools and technology would better take advantage of our existing infrastructure. Moreover, all grid operators have to make similar changes. Crucial investments to protect our infrastructure from cyber security threats; the adoption of synchrophasors; the upgrading and consolidation of control centers; the exchange of real time data with neighbors for situational awareness (something that may have prevented the great southwest blackout last fall) ; and the exchange of scenarios and models for operational planning are now unavoidable. Leveraging all available resources and tools avoids the construction of unneeded and duplicative infrastructure, and allows for the sharing of reserve resources, saving everyone money and avoiding environmental impacts related to avoided construction and air pollution. Developing new rate structures save consumers money by promoting energy efficiency and demand response programs that will reduce costs. In an improved and updated system, everybody wins.
Public resources created PMAs and public benefits are part of their mission. The PMA system and grid is a public asset, built with public money. Current customers are benefitting from legacy investments that have built industries and provided services to rural consumers. Payments made by current customers can be seen as investments in the system that will enable it to pay dividends to future generations. The fundamental mission of the PMAs to provide electricity at cost-based rates -- equal to the cost of generation and transmission -- will not change. PMA customers will continue to have access to affordable reliable hydroelectric power for decades to come. However, this fundamental mission will be at risk if we fail to make sensible investments to ensure the long-term security of our electrical system.
Updating the PMA system and making it more interactive with the rest of the grid helps accomplish other national goals. Modernizing the grid and grid operations supports the integration of renewable resources and is the most cost-effective way of adding these resources to the nation’s energy supply. Federal efforts to slow climate change and minimize the impacts for global warming will benefit from these operational changes, which makes the integration of America’s vast supply of renewable energy resources less expensive. Similarly, these resources, because they are produced here, enhance our nation’s energy security and provide zero fuel-cost sources of energy for present and future generations. Because the development jobs they create cannot be outsourced, investing in the grid of the future helps bolster our fragile economic recovery. The grid of the future will be one that supports increasing amounts of variable renewable power – across our nation – emphasizing flexible and coordinated operation of one of America’s greatest assets: the largest machine ever built by man, the electrical grid.