Letter to FERC on Advanced Transmission Technologies

04 Dec 2018

As you think about wildfires caused by sagging lines and other severe weather impacts, doesn’t it seem beneficial to monitor line status and be able to change ratings and re-direct flow? There are also major consumer savings from reducing costly and growing grid congestion. Plus, the job of incentives to deploy these technologies was required by Congress and FERC hasn’t done it yet. The following letter was sent to FERC on November 26th, 2018.

“Dear Chairman and Commissioners:

The WATT Coalition, Americans for a Clean Energy Grid, and AWEA are encouraged by the interest you have recently expressed in reviewing transmission incentives. We request that you open a proceeding to hold a Technical Conference on these topics. Specifically, we request that you address an uncompleted aspect of the Energy Policy Act of 2005: encouraging the deployment of advanced transmission technologies.

Congress passed and President George W. Bush signed the Energy Policy Act of 2005 (EPAct), one provision of which is Section 219(b)(3), whose purpose is to, “encourage deployment oftransmission technologies and other measures to increase the capacity and efficiency of existing transmission facilities and improve the operation of the facilities.” In 2018 – 13 years after its signing – this provision has yet to be addressed.

When the Commission implemented the rate incentives provisions of EPAct in Order No. 679, very little guidance was provided on the operational aspect of transmission relative to the incentives for grid expansion. In part that was because the relevant technologies were undeveloped at that time and few commenters raised the issue in the docket. In 2011 after five years of experience with Order No. 679 the Commission observed, “To date, the vast majorityof applications for transmission incentives filed with the Commission have focused on the enlargement of facilities, including construction of new transmission facilities. Few applications have focused on the improvement, maintenance, and operations of transmission facilities or onincreasing their capacity or efficiency... For example, this could include software improvementsthat enhance scheduling and dispatch or investment in tools to enhance self-healing gridcapabilities or improved situational awareness.”1

In the subsequent policy statement the Commission once again acknowledged the issue but did not establish any implementing regulations: “Investments in the following types of transmissionprojects may face the types of risks and challenges that may warrant an incentive ROE based onthe project’s risks and challenges that are not either already accounted for in the applicant’sbase ROE or could be addressed through risk-reducing incentives: ...3. projects that apply newtechnologies to facilitate more efficient and reliable usage and operation of existing or newfacilities...Examples of projects that meet this description include those that create additional incremental capacity without significant construction (e.g., through the use of dynamic line rating), that allow for more efficient balancing of variable energy resources, and/or that provide increased grid stability. In addition, the Commission is concerned that its current practice of granting incentive ROEs and risk-reducing incentives may not be effectively encouraging the deployment of new technologies or the employment of practices that provide demonstrated benefits to consumers. Accordingly, the Commission remains open to alternative incentiveproposals aimed at supporting projects that achieve these ends.” Thus, there continues to be no policy implementing Section 219(b)(3) of EPAct 2005.

In the years since EPAct 2005, transmission operations technologies have improved dramatically. Dynamic line ratings, power flow control, and topology optimization in particular have advanced to commercial status, have been deployed in pilots in the US, and on larger scales in other countries.

We are ready to offer policy ideas. A rich source of ideas comes from other countries where grid operations technologies are being more widely deployed because the regulatory policies differ. For example, in Australia there is a process whereby grid operations technologies deployed by transmission owners receive an incentive return after the independent grid operator verifies that benefits to customers exceed the costs, and the regulator approves them. These and other options could be considered at a Technical Conference.

We look forward to your response.” 

Sincerely,

Rob Gramlich
Executive Director, WATT Coalition

John W. Jimison
Executive Director, Americans for a Clean Energy Grid

Amy Farrell
SVP, Government and Public Affairs, American Wind Energy Association

Todd Foley
SVP, Policy and Government Affairs, American Council on Renewable Energy

http://www.watt-transmission.org

cleanenergygrid.org

http://www.awea.org

http://www.acore.org