DOE should not lean on EIPC study for congestion analysis – industry sources

The U.S. Department of Energy’s 2012 transmission congestion study should not rely on findings from the Eastern Interconnection Planning Collaborative’s transmission study, industry sources said. 

Rather, the DOE should focus on transmission congestion that is occurring today, regulators and ISO executives said at DOE’s first transmission congestion study workshop in Philadelphia Dec 6. 

The EIPC, with input from the Eastern Interconnection States Planning Council, is conducting a two-phase study to determine what transmission would be needed over a 20- to 30-year time frame to satisfy a variety of energy policy scenarios in the event that one or several of them are implemented. The first phase, which focuses on generation, is scheduled to wrap up by the end of this year, and the second phase, which focuses on transmission, will conclude by the end of 2012.

“What we’ve done so far in analyzing the macroeconomic resource mix for a variety of futures and doing production cost modeling and buildouts for a few of those isn’t going to identify anything about transmission congestion now or in a few years to come,” said Doug Nazarian, president of EISPC and chairman of the Maryland Public Service Commission.

What the study may show is how the world changes in terms of certain resource mixes if certain policies are enacted on certain scales.

“Although I think it may be helpful directionally to understand where the world could go, I don’t know how helpful it’d be to the process DOE has undertaken,” Nazarian said.  

Incorporating findings from the study into DOE’s national electric transmission congestion study could also be used as a platform for triggering FERC backstop siting authority, North Carolina Utilities Commission Chairman Edward Finley argued. Citing statutory language authorizing the DOE to conduct the study and identify transmission corridors, Finley noted that use of the present tense seems to indicate the DOE should not anticipate congestion that might occur down the road.  

Section 216 of the Federal Power Act requires the DOE to complete a study of electric transmission congestion every three years. DOE has issued two studies, one in 2006 and the other in 2009. 

“It would appear Congress intended that the designation of a national interest electric transmission corridor and a related FERC backstop siting authority be used only to address actually occurring congestion,” Finley said. “EISPC has been working to define three scenarios of what the electric grid might be or what might be needed over a 20-year horizon. The DOE congestion study is looking at congestion right now. In our opinion, they are very different.”

This sentiment was echoed by several panelists at the workshop, including Betty Ann Kane, chair for the District of Columbia Public Service Commission, and John Buechler, executive regulatory policy advisor for the New York Independent System Operator. 

Garry Brown, chairman for the New York Public Service Commission, said the DOE congestion study should focus not only on where congestion currently exists, but where there would be a net benefit to relieve it. 

The DOE may only designate a national corridor if a geographic area is experiencing electric transmission capacity constraints that adversely affects consumers, Brown noted. 

“I believe that’s an acknowledgement that there’s such a thing as economic congestion – that it exists but the cost of remediating the congestion will cost the consumer more than paying the ongoing congestion costs,” Brown said. “The presence of congestion doesn’t have to equal the absence of reliability.” 

Bob Bradish, American Electric Power’s (NYSE:AEP) managing director of transmission planning and development, offered the only dissenting view, saying that as a transmission planner, a DOE study that does not anticipate future congestion will be unhelpful. 

“It doesn’t do me much good to look at the grid today and plan for a line that will come online in 10 years,” Bradish said. “I don’t want to build a transmission line where in 10 years ultimately the need isn’t there. A study that’s going to help us and identify corridors has to be forward-looking.”

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.