The Debate: FERC and Building the Clean Grid

The transmission grid is the critical superhighway that connects energy supply and demand. But our grid was designed for the power plants of the past—not for the diverse range of resources and technologies of our clean energy future. Over 70 percent of the nation’s transmission infrastructure is more than 25 years old, and in many areas of the country constraints have already been an impediment to renewable power. To meet greenhouse gas reduction goals, we will need to expand electric transmission systems by 60 percent by 2030 and possibly triple the capacity of these systems by 2050. The Inflation Reduction Act has large loan guarantees to spur grid investment, but hundreds of billions more will be eventually needed.

Grid modernization will require the Federal Energy Regulatory Commission, which oversees the interstate transmission of electricity, to take a leadership role in coordinating with industry investors and other agencies as we balance the reliability, cost allocation, and environmental concerns associated with transmission grid expansion. Last summer, FERC adopted new policies that remove many barriers for new solar and wind power suppliers interconnecting with the grid. Meanwhile, a proposed Department of Energy rule would speed upgrades by having DOE manage environmental reviews, which must be completed within two years.

Still, many critical policy issues within FERC’s wheelhouse remain unresolved. These include improving the transmission planning process, coordinating with utilities and with states so new lines can be placed where they are needed. But how should environmental and land impacts be considered and balanced in this process? Who should build new transmission lines, and can expansion of the grid balance the needs of the regional power markets and states? How will the costs of expanding transmission be allocated in a manner that is cost effective and fair? As the transmission grid faces more physical interruptions due to extreme weather events, what is the role of FERC in safeguarding reliability and resilience?