[Scott] Coming up on "Energy Switch," we'll look at the challenging prospect of building new power lines.

- But a lot of states have also made a decision to have more competition in generation.

And right now, resources like wind and solar often are least cost.

I think it's really hard to separate transmission lines into this very like narrow category.

Like, this is only a reliability line or this is only a line for clean generation.

You serve all of those purposes.

- I disagree on that because I think you absolutely can determine what's the optimum reliability line.

They are very objective criteria.

If the line is gonna serve one or two or three state's renewable portfolio standard, you shouldn't be cost allocating that to other states.

It's just not fair.

- Interesting.

[Scott] Next on "Energy Switch," how to build power lines.

[Narrator] Funding for "Energy Switch" was provided in part by, The University of Texas at Austin, leading research in energy and the environment for a better tomorrow.

What starts here changes the world.

[upbeat music] - I'm Scott Tinker, and I'm an energy scientist.

I work in the field, lead research, speak around the world, write articles, and make films about energy.

This show brings together leading experts on vital topics in energy and climate.

They may have different perspectives, but my goal is to learn, and illuminate, and bring diverging views together towards solutions.

Welcome to the "Energy Switch."

Everyone loves electricity and no one loves power lines, but we need more of them, especially if we want more solar and wind, which is often built far from the places it's used.

New transmission lines face many challenges in planning, and permitting, siting, right of way, and imminent domain, allocating cost among stakeholders, and working with property owners and environmental groups who oppose new lines.

We'll dig into these difficulties with Mark Christie.

He's a member of FERC, the Federal Energy Regulatory Commission, and was chairman of Virginia's regulatory body over utilities, insurance, and banking.

Emily Fisher is executive vice president and general counsel of the Edison Electric Institute, and was a foreign service officer with the U.S. Department of State.

Next on "Energy Switch," we'll hear differing opinions on how to build new power lines.

Well, welcome.

Glad to have you both here.

Let's just dive right into this important topic of power lines.

We all love electricity but we sure don't like the power lines that bring it to us.

Why do we have resistance to power lines?

- You know, human nature is everybody wants to go to heaven and nobody wants to die.

We want power, we want power 24/7 365 and we should, and that's the goal.

But no one wants to look out their kitchen window and see a 765 kV power line because it's hanging on towers that are four or five stories high, often painted with silver metallic paint that you can see 20 miles away.

And so it's gonna be very difficult to site.

- Why don't we bury 'em?

- You can bury some.

A local distribution line that comes down your street, that comes down into your neighborhood can be buried and frequently building codes now even require them to be buried.

But really it's a matter of scale.

At what point do you reach a volume, a voltage level, that you simply can't bury?

- Right, there's technical and economic reasons- - It is technical.

- For both.

- Well, it's technical and the economics are driven by the technical.

- I think one of my favorite fun facts about the sort of transmission and distribution system as a whole is that it was actually deemed the most important invention of the 20th century was the interconnected power grid in the United States.

And if you think about all the other things that we invented and developed, that says a lot about how important it is.

- Worked together to do it too to build this accomplishment.

- But people still don't like looking at it.

[Scott] No.

How does it work?

I mean, the just high level transmission system, how does it work?

- So we generate electricity, we increase its voltage, we transmit it across some fairly relatively large distances and then we step it down and we distribute it to people so they can use it.

- Step it down so it comes out of a power plant at pretty high voltage transmission.

And then we've gotta start getting it down to something that won't zap us in our own homes, right?

- Exactly.

- So that's stepping it down?

- Yeah, making it a little bit less voltage so that it's more usable so we don't, you know, blow up your microwave or your toaster, make it so that you can charge your phone at a, at a reasonable voltage, but to transmit it long distances, it's better to have it at higher voltage.

So we need the system.

- Do we need more power lines in the U.S.?

- I think that we do, and I think that's one of our current challenges.

If you look at, you know, most of the credible studies that examine how we would get to a net zero economy in 2050, they all say that we would need to double or triple the existing transmission system, you know, before 2050 and probably have a significant amount of expansion this decade.

- Well, let's look at the purpose of the electric system in America and I think that the purpose of the electric system is actually quite simple.

And that is to provide reliable power to consumers at the least cost.

- Reliable being here?

- Reliable meaning power that's on 24 hours a day, 7 days a week, 365 days a year.

We need power lines that serve that goal.

If you want a different purpose, such as the Biden administration's goals on carbon reduction, then we start with the fact that Congress has to pass a bill that says we're gonna change the purpose of the power system to do this.

And if Congress passes that, then that becomes a federal law.

It hasn't done it.

Now states have the authority to pass mandatory renewable laws and about half of them have.

But if your state hasn't passed that, that means the people haven't demanded it because this is the way democracy works, right?

[Scott] Interesting.

- So a lot of states have also made a decision to have more competition in generation.

And right now when generators compete, resources like wind and solar often are least cost.

The cost of both of those technologies have come down dramatically in the last 10 years.

And they are often competitive with traditional resources like coal and natural gas, and often they can be less expensive, right?

I think it's really hard to separate transmission lines into this very like narrow category.

Like, this is only a reliability line or this is only a line for clean generation.

Once you're connected to that huge system we talked about, you serve all of those purposes.

- I disagree on that because I think you absolutely can determine what's the optimum reliability line.

They aren't just sort of like sort of reliability or sort of not reliability.

They are very objective criteria.

Now local projects are within one load serving utility and those costs are allocated strictly within that load serving utility.

They don't even get regionally cost-allocated.

So the only projects that get regionally cost-allocated across multiple states are these reliability projects.

The real question is not whether it should be built, it's fine if you want to plan it.

The question is who is going to pay?

You know, people quibble about the formula, but everybody buys into the idea that if the line is to serve reliability, fine, we will pay for it on a regional basis.

But if the line is gonna serve one or two or three state's renewable portfolio standard, no, you shouldn't be cost-allocating that to other states, it's just not fair.

- Interesting.

- Focusing really narrowly on the transmission or the reliability problem that we have today, when we know that the system is evolving, it's a little bit shortsighted, right?

Like, the power sector is the most capital-intensive industry in America.

We spend about 130 or $140 billion annually on the generation transmission and distribution, which is why a lot of the conversation has been should we expand the planning criteria to do things that we know are actively happening?

It doesn't seem sensible to me to not think about the future uses of that infrastructure when we know it's gonna be around for a long time.

- That makes a lot of sense by the way, thank you.

Setting aside whether or not it makes sense to reduce emissions and who should pay for that- - Well, first of all, I think personally reducing emissions is a compelling policy goal.

- Well, setting it aside- - But setting it aside- - Would we need more power lines?

- Yes.

- Yes.

- Because as load grows, which it is, there's going to be a need for more generation resources by several orders of magnitude.

- It's going up, not orders of magnitude like 30%, 40%, 50%, not orders of magnitude.

- ISO New England, which is the system operator for New England estimated they would have to triple load if you electrify everything.

Just starting with the transportation system and the home heating.

- Okay.

- We're going to be spending a lot of money on transmission in America.

There's no question about that.

No one's debating.

The question is, what are we gonna spend it on?

What kind of projects are we gonna spend it on?

- And so that introduces the conflicts too.

So just in real simple terms, how does power line planning happen?

- It depends whether you're in an RTO or you're not in an RTO.

If you are in a state that's not in an RTO, the planning is gonna start with the transmission owning utility and it's gonna be part of a integrated resource plan that's submitted to a state regulator.

And if it's approved by the state regulator, then it's gonna become part of a regional plan because that's sort of a bottom up planning process.

In an RTO, it's sort of top down if it's regional because the states have given the authority to plan transmission lines to this RTO.

And so the RTO is doing the planning.

[Scott] And that's a federally regulated- - Federally regulated RTO.

And so I would add one caveat to the RTO is that they're planning regional projects.

And what do I mean by a regional project?

A regional project at its most basic is a transmission line that goes from one transmission owning utility zone to another.

They're not doing local planning, which is still being done by the utility itself.

- Anything to add to that or- - I mean the one thing I guess I would add is that the Federal Energy Regulatory Commission has criteria.

Like, you don't just do whatever you want.

Like, they've created requirements about how you plan and what you're supposed to look at.

And we're kind of involved in a conversation right now about are those the right criteria?

And then of course there's the physics of the system also dictates what we do here.

- And what's the biggest driver there?

- You know, it really look depends on what problem are you trying to solve.

Like, what is this line gonna do?

You know, so often it starts with, there's some sort of problem on the system, there's a lot of congestion, the lines just don't have the capacity.

So you're like, "Oh, I need more capacity here so I can get more power from this place over to this place."

And that can have real impacts on pricing, right?

- How do we permit these and how long does it take?

Why does that seem to go fast some places and not others?

- I don't think it goes fast anywhere.

For big transmission lines, probably takes about 10 years right now.

[Scott] Oof.

- Um, so there's a lot of process.

I mentioned stakeholders before, they're important, but they're part of the reason why it can take a long time.

So, initially when you go to the state commission, you'll say, this is the power line I wanna build.

And there'll be a process where people get to say, "I don't know that I really like that," Or "Could you maybe make it go around here?"

Or "Maybe you could do it over this way."

Like, so there's a whole process to say is this the right spot?

Like, the engineers will come up with the optimal spot and then there's like reality.

And then a commission has to say, "Yes, you should build that," the state commission 'cause they have some citing authority for over the land in their state.

So you can have one set of rules in one state and another set of rules, I mean, this is the joy of our 50-state laboratory democracies.

Sometimes they just do things differently and not just different policy priorities, but just different priorities for how they build stuff.

[Scott] Yeah, yeah.

- Yeah.

- Then there might be environmental processes at the state level.

So there's some basic stuff like that.

For bigger lines and for lines that might have some sort of federal overlay, particularly if you're touching federal land, you might need federal environmental permissions.

So there's a lot of process.

- That's interesting.

- Well, and then I have to say, 'cause we're all lawyers, I said that before.

Everyone sues on these processes.

They always say that the process wasn't done right or it wasn't robust enough or it wasn't complete enough.

So like maybe it takes a couple years to actually build the thing.

Like, the construction isn't hard, but the siting and permitting and the, like, attendant litigation, 10 years.

- Yeah, I mean, no, I would agree with Emily.

The bigger, the longer, the more expensive it's gonna be, and the bigger, the longer, the more challenging it's gonna get to be permitted and sited.

- Bigger in terms of- - Length.

You know, a 20-mile line in an existing right of way is gonna be a lot easier to permit and build than a 250-mile line that goes across two state lines, and requires a substantial amount of eminent domain, which is seizing land.

- We pay people for the inconvenience.

- Yes.

- Well, fifth amendment to the constitution guarantees that you get just compensation, so yes, you do under the fifth amendment.

- And I think that's why we're seeing a real interest right now in technologies that might help us expand the capacity of existing lines within existing rights of way.

We do more with what we got because new like brand new rights of way, that's pretty painful.

- That's tough.

- What does it cost?

I mean, what's the metric for cost?

- That's another thing that's super- - Fact specific.

- Super fact specific.

I mean generally speaking, like I said, we're the most capital-intensive industry in America.

These are multimillion dollar if not 10 or 100 million dollar projects, So the costs are big, but that doesn't necessarily mean that they're immediately reflected in the prices that customers pay.

The company building the transmission does all the capital expenditure up front and then they recover it over time through electricity rates.

And that's a way of sort of like ensuring this kind of like intergenerational equity, but also making sure you don't see like huge spikes in bills because we had to spend 100 million dollars last year on a new transmission line.

And they are cost-based, right?

Transmission costs in the United States, it's not the value of transmission, it's what did it cost you to do this plus a reasonable rate of return.

- And that's regulated?

- And that's regulated.

He is a regulator of that.

But the seminal issue isn't necessarily like the magnitude of the cost.

It is really about who is paying.

If you're taking, you know, a new generating source from, you know, one state and you're moving it like two states over and you're just gonna cross to other states, they're not getting the jobs related to the new generation, and they're probably not the consumers of the electricity, you know, our current system does allocate some of those costs to everybody in that space.

And some people are like, "Wait, why should I pay for that?"

And we keep coming back to this concept of stakeholders.

There's a lot of people who need to be involved in those conversations so that it feels fair and that's hard.

- Given these challenges, are we gonna build new power lines and at anything close to the pace that would be needed?

- Let me say this, we're building power lines.

I think there's a sort of a narrative being pushed by a lot of groups that we're not spending any money on power lines.

We're under investing in the grid, you know, the grid's falling down, and a lot of money is being spent on transmission.

Now, we're not starving the transmission grid.

The question is, okay, and this is the big...

I would call this the $2.5 trillion question.

To fulfill certain political and ideological agendas, we've been given a number by Princeton, which the Biden administration endorses that we need to build 2.5 trillion.

That's trillion with a T, not even a billion dollars worth of new additional transmission to meet quote unquote "Our climate goals."

Well, let's be absolutely blunt.

Two-and-a-half trillion dollars in new additional transmission is going to slam consumers hard in the pocketbook.

Seriously, and by the way, that's only about one-fourth of the ultimate cost.

When you spread it over 30 years with financing, the actual cost is about four to five times the sticker price going in.

That's a policy decision that should be made by people who are elected by the people who are going to pay the bills.

- How do you respond to that?

- I'll take the question a little bit more at face value which is if you wanted to do these things, could you do them?

[Scott] Right.

- The answer is you probably can't do it on the timelines that people have theorized or necessary.

One, the processes themselves are complicated.

Two, we don't agree on how to figure out who should pay for these costs.

And then, three, our environmental laws are really aimed at slowing down projects, right?

So when I say it takes 10 years to build stuff, that's a really long time from an infrastructure perspective and if you're trying to have a certain amount of transmission expansion by the end of this decade, you're already behind.

[Scott] That makes sense.

So where would the new ones go?

Where are they most needed to connect, you know, what to what?

- The most simplistic answer to that is if you look at where a lot of renewable resources are just located in the United States, wind is generally in the center of the country.

Solar tends to be in the south and in the, you know, the west southwest, generally people look at that and they say, "We're gonna need transmission lines are gonna take resources from those areas, which might not often be, you know, coterminous with where lots of people live and get it to people.

And then there are some questions about, you know, Texas being such an interesting question, it's not really interconnected to the rest of the United States so do we need to interconnect folks who aren't as well interconnected to the rest of the country so we could move that power around?

- That makes sense.

How does it overcome some of these things?

Are we stuck with what we got?

Are there new things on the horizon that could help us do this better?

- You know, instead of going to a community and saying, "I'm gonna build this thing here, you're welcome," we should involve them in the conversation and try to accommodate their needs and that could actually speed up the process.

I think there's a really important conversation right now happening in Washington about whether or not federal environmental reviews can happen in a more timely fashion.

And I do think we need to come to some sort of national consensus on costs and who pays.

And I think that might require Congress to have some sort of rubric that could be applied that people feel is fair.

But I think having to negotiate out each individual project and who's gonna pay what costs is really time consuming, and it's acrimonious, right?

I think we started the conversation with why don't people like infrastructure?

We do a bad job of telling them what the infrastructure does for them, to your point.

- That's critically important.

- We do a bad job of that and then we just focus a lot on fights about cost.

That's not gonna help us with community acceptance.

So I think if we could streamline that process, get some high level agreement, but there is gonna be some payment by some people who are not gonna see as many direct benefits as others.

We just need figure that part out and then say this is the agreement we've made.

- Let me toss something out that, I mean, climate is a very controversial topic.

It just is and it's gotten quite passionate.

But everything you all have described to me today, what I've heard, says we're gonna need electricity more and we're gonna need more power lines.

And so is there a way in policy to kind of extricate climate and just set it over there?

I mean, is there a way?

- I think there is, I mean, you know, focusing on the broad-based benefits of infrastructure is important.

And you know, we are living in a time where extreme weather, for whatever reason, is on the rise, right?

And if you're the person who's suffering like a multi-day or worse outage because of a fire or a hurricane or some other like weather event, what you want is a reliable system.

And so some of the investments are really about hardening the system and climate adaptation.

And that should be appealing to a broader base of folks.

[Scott] You could call it weather adaptation.

- Whether it's, it's climate-caused or extreme weather, whatever words you want, people understand that we need to harden the distribution grid against weather events.

And people will generally pay if they know, "Okay, I know it's making my bill go up, but I'm getting more reliable power."

Same with transmission.

They'll be controversial if you're there 'cause you don't wanna look at a 765 kV line.

But if you can convince them that it's really about providing reliable power, people will support that.

I don't think there's any disagreement on that.

The disagreement about building and paying for lines comes when you introduce extraneous policy elements.

If this country's gonna spend two-and-a-half trillion dollars to support basically a climate agenda, it's gonna serve ultimately the cause of reducing emissions, which is an important cause, I agree with it, but it's a policy decision.

Congress needs to make that decision.

That is for Congress to do.

- I do wish Congress would step in and help us solve some of these problems and provide more clear direction.

But practically speaking, I don't see them doing that.

So, we are gonna have to navigate our way through some of these things without what would be the perfect sort of like overlay, right?

If what resonates with the community is this has a resilience benefit, but it also brings more clean generation onto the system, that's good, let's do that.

Like, let's talk to people about what matters to them.

But it does matter that we do these things.

- But ultimately what you're saying is if Congress doesn't do what I want it to do, and if half the states don't do what I want them to do, well, we need to do it anyway because everybody, meaning people who agree with me, think we ought to do it.

We don't have at FERC a national transmission planning authority.

Congress hasn't given us that much less how to do cost allocation.

And you can't say, "Well, FERC should do it anyway because Congress is deadlocked."

We don't have the authority to do it.

Congress needs- - I think your consumption - To make that decision.

- Of your authority is actually a little bit narrow.

Just and reasonable is a pretty squishy term and you've defined it to mean least-cost, but it doesn't mean that, and it doesn't have to mean that.

And I'm not saying that we should put $2.5 trillion worth of costs on customers without thinking about it.

But you actually do have some authority, Commissioner, to think about this a little bit more holistically.

I'm not saying you have to, you know, force policies onto states, but- - I think that's exactly what you're saying.

You're saying in a multi-state RTO, FERC should say, "Here's how costs are gonna be allocated for lines that are not reliability-driven lines.

They're policy-driven lines.

- But the system itself is totally interconnected.

And as we talked about, the electrons go where they go.

And so the benefits of a system that is gonna have lesser cost resources interconnected to it and is gonna have the broad based resilience benefits because all transmission provides multiple values.

So that's a free writer problem then, right?

- No, no, no, no, no, no.

Here we go again.

The states that are choosing to make different generation choices than you like are not free ri- - But there has to be some middle ground for a system that's fundamentally interconnected.

- Let's get very specific.

A policy project is a project that wouldn't be put into a regional plan, which means it's eligible for cost allocation.

- I don't think these projects exist.

MISO, when it does this planning, by definition, calls those projects multi-value projects.

- Right, right.

- I think it's overly simplistic to say that this line is only for reliability and this line is only for a policy.

That's not how it works.

- Every line will have different benefits, but the optimum solution to a reliability problem is a reliability line.

Yes, there are ancillary benefits.

It may be a spinoff on, on reducing congestion, it may be a spinoff even serving some state's mandatory renewable standard.

That's fine as ancillary benefits, but that's not why they plan the projects.

- Refusing to acknowledge that the resource mix is changing and that the electric system is planned for multiple decades isn't helpful to us.

And it actually could cost customers more money in the long term.

We could take some steps today that actually would allow us, I think, to be more thoughtful about the planning of the system that might actually have long-term benefits.

There's some value to some of the FERC conversation about extending the planning process out beyond the three-year horizon which seems crazy narrow to me, and thinking more about 10 or 20 years down the road.

- What I'm hearing you both say, I think, I'm hearing you both say, if I can bring some convergence to it, is that it is a democracy, we do get voices in this.

Is it a federal or a state issue?

And this is the challenge, I think the dialogue that we're gonna have of any infrastructure.

You've both done a good job of describing where those holdups are.

I'm gonna ask you both and give you opportunity to just kind of clear your heads and, you know, final thoughts.

What should our next steps be?

- I think you just raised a really good point about different kinds of infrastructure and we do need to have a little bit of a national conversation about the fact that we need infrastructure to basically serve the economy.

And so we've gotta find a path forward on that and that's gonna require people giving on all sides, right?

Like, there's gonna have to be some reckoning with cost allocation.

Who pays and who decides who pays?

But I think it has to get built.

- Right.

- I think it has to get built.

- Right.

- And I think that we are in the middle of a clean energy transition and it is gonna happen.

I don't know why we wouldn't wanna take advantage of evolving technology if we could provide electricity in a more sustainable way that ultimately could be less expensive for customers.

And in order to do that, we're gonna need the infrastructure.

- Yep.

- You know, last year, U.S. Supreme Court came out with a case called West Virginia versus EPA.

And in that decision, Supreme Court said major questions of public policy are not hidden in statutes.

They're explicit, and federal agencies don't have authority to address major questions of public policy unless Congress has said, "You shall do that.

Here's your authority, go do it."

Spending two-and-a-half trillion dollars on building transmission to pursue decarbonization goals may be a good policy.

It's a policy decision for Congress to make.

So as we look forward on building transmission, we're gonna be building transmission.

We're gonna be building a lot of transmission because we need to build it.

It's gonna hit consumers, it's gonna hit 'em hard.

Making sure that consumers are not paying too much.

Making consumers are treated fairly, I think is absolutely the challenge that we face.

- I think I take away from this that it's not simple, but we gotta continue to have good dialogues and listen.

And I appreciate you both having that here with us today.

So, Scott Tinker, a great discussion on power lines on "Energy Switch."

My guests agreed that we need a lot more new transmission and they agreed it will be a challenge to build it.

Operators that design and control power lines often encounter resistance from local regulatory boards, and property owners, and lawsuits especially if the power lines cross state lines and need new right of way.

Together, these can make permitting take a decade.

They agreed that Congress has not clarified the process or given the Federal Energy Regulatory Commission the authority to remove some of these hurdles.

They disagreed on whether FERC should or could act anyway and about building transmission to grow wind and solar at the rate-payer's expense, especially if it crosses states that don't agree with this policy.

We'll need to resolve many of these issues soon if we are to build enough new power lines to meet the country's growing electricity needs.

♪ ♪ ♪ ♪ ♪ ♪ [Narrator] Funding for "Energy Switch" was provided in part by The University of Texas at Austin, leading research in energy and the environment for a better tomorrow.

What starts here changes the world.