A new rule promulgated by the Federal Energy Regulatory Commission (FERC), Order 1000, will change the face of America when it comes to moving energy to our homes and businesses. While most people may not know about it or fully understand it, this rule is critical to increasing transmission reliability and security, and reducing greenhouse gas emissions – while pushing us closer to a cleaner energy future.
In fact, as two other observers of this Federal Energy Regulatory Commission rule recently described it, FERC Order 1000 is “the most exciting energy regulation you’ve never heard of.”
Simply put, Order 1000 represents a revolutionary new planning and cost-allocation approach that: opens regional transmission planning to diverse stakeholders; considers non-wire alternatives to transmission to meet electricity demand; incorporates compliance with federal and state policy goals as a major factor in choosing which interstate transmission lines to build and allocate costs for; and identifies beneficiaries to ensure that costs are fairly spread among customers.
This rule creates an entirely new planning process. Previously, the goals and choices of utility and transmission companies were the ones most likely to pass planning and regulatory muster. Now a wide range of stakeholders, including environmental and consumer interests, have an important say over which transmission lines are chosen through regional plans that are combined into a broader, interconnection-wide transmission plan. Regions present a formula to allocate costs for the new lines to those who benefit, and once FERC approves it, they will implement it.
This, in turn, enables rate-making authorities like public utilities commissions to recover construction and possibly other related costs from consumers who benefit from more reliable transmission. This wider range of voices should make for better choices, selecting only the lines we really need to meet consumer demand and considering alternatives to transmission that might otherwise have been downplayed or even ignored.
For example, “non-transmission alternatives” must be considered equally as part of the process, and this includes demand-side management (DSM) that encourages customers to use less energy during peak demand periods through measures like energy efficiency, storage of energy at large scale, and automated controls that enable utilities to distribute real-time energy information directly to homes and businesses and/or control electric usage during peak demand periods. These techniques fall under the heading of “Smart Grid” because they rely on Web-based communications to regulate how much energy is needed to serve customers.
Considering energy efficiency and DSM fully means that less generation of any kind will be needed to meet electricity loads, and that only transmission we really need gets the green light, saving people money and preventing unnecessary impacts on the environment.
Important to Increasing Renewable Energy Resources
FERC Order 1000 also breaks new ground by requiring complying with state and federal energy policies be included when selecting transmission alternatives in the plans. Transmission required to comply with laws promoting renewable energy – such as renewable portfolio standards or California’s landmark clean energy law AB32 – must meet the Order 1000 for “need” in selecting alternatives in the regional transmission plans. This “public policy” approach is a boon for renewable energy because most of the proposed new transmission lines would move power from clean resources like wind and solar from remote generation areas to urban areas.
The rule also is integral to implementing the clean energy vision we described in “Western Grid 2050,” a report issued last year describing a roadmap for reducing carbon pollution in the West’s economy and environment. If fully implemented, an 80 percent reduction in greenhouse gases from the West’s electricity sector is achievable by 2050 (in keeping with the Intergovernmental Panel on Climate Change’s recommendations), according to the report. Order 1000 provides an avenue to pursue many of the report’s clean energy grid-related recommendations.
Finally, Order 1000 opens the way for environmentally friendly planning innovations that have emerged in just the last few years. NRDC was actively involved in the work done in advance of Order 1000 to identify solutions to avoid potential cultural and environmental conflicts (such as Native American archaeological and burial sites and historical districts, and important landscapes and imperiled wildlife) related to transmission planning and solar energy development, particularly in the West in coordination with the Western Electricity Coordinating Council, the Western Governors Association and the Department of Energy.
NRDC will continue participating in this effort going forward, advocating for the selection of transmission alternatives that serve renewable generation and avoid environmental and cultural risks and conflicts while making the best use of existing infrastructure and transmission corridors. We expect that incorporating this approach into the Order 1000 planning process will help protect sensitive resources as we ramp up renewable energy to combat climate change.
Order 1000 is critical in helping our nation increase transmission reliability and security, and reduce greenhouse gas emissions but also revolutionary because of its new perspective on what must be included – and valued – in building transmission lines in the United States. Getting more renewable energy onto the grid while increasing sensitivity to the cultural and environmental impacts as we modernize and expand our transmission system will benefit all of us long into the future.