Transmission planning must be holistic, account for regional differences – NARUC panel

A panel of regulators, government representatives and transmission developers speaking at the 125th Annual Meeting of the National Association of Regulatory Utility Commissioners (NARUC) in Orlando, Fla., agreed that future transmission planning needs to consider all the demands on the transmission system, yet allow for requirements that will vary from region to region.

“The future grid is going to be far more complex than the one that we have now,” David Meyer, senior advisor with the U.S. Department of Energy (DOE), said Nov. 19. “This is because [of] all of the existing design requirements that we have been striving for in terms of reliability, cost control [and] compliance with environmental requirements. We’re going to carry those forward and add several new requirements.”

Those future requirements will include resiliency, cybersecurity and the ability to manage multi-directional flows of energy and information, resulting in a grid more complex than it is today. Despite the increasing complexity, however, Meyer said it is essential to think of the system as a whole.

“This is a system that must work,” he said. “But it isn’t enough that it work in a rudimentary way; it has to work well. In order to achieve the potential benefits associated with transformation and modernization of the grid, it means making this vast and complex system function well.”

Industry representatives agreed.

“We are asking the transmission system to do things it was never originally designed for,” John Flynn, executive vice president of strategic planning and project development for American Transmission Company (ATC) said, noting that additional demands are placed on the system in areas where RTOs and competitive energy and capacity markets exist.

“The transmission that existed, and to some extent still exists today, isn’t capable of achieving the goals that the competitive markets demand,” he said.

Accordingly, because ISOs and RTOs don’t exist in all areas of the country, the needs in each region are going to drive different transmission solutions for different parts of the country.

“We do need to look holistically in thinking about solutions,” he said, adding that such an overarching view must take the increased level of demand on the system into account. Further, Flynn said, any analysis should consider the overall value of large transmission projects, and not just the cost. 

Another industry executive favored processes that considered all possible solutions to arrive at an answer that best served the end-use customer.

“If the best way to solve a particular issue is through a transmission project, or a distribution project or a generation project, [it is important that it] all gets vetted out through the integrated resource planning process,” Billy Ball, executive vice president and chief transmission officer of Southern Company (NYSE:SO) said. “Integrated resource planning is vital; it will identify the best solutions, whether transmission or otherwise.”

Ball also agreed that transmission planning needs to consider needs that are specific to each region.

“We are unique in different parts of this country, and I think we have to be careful not to try to make everything look the same because I think we’re going to leave value on the table that we could take to the customer if we stop looking at things as regionally unique,” he said. “In the end, it’s all about serving the end-use customers’ needs.”

Although it is not yet clear specifically how the balance of tomorrow’s critical attributes will be met, it is clear that the balance will be dynamic.

“That balance is going to vary over time, and it’s going to vary from region to region; we need to recognize that,” Meyer said, adding that “the balance aspect is what is essential.”

Most of the transmission planning decisions will be made by state, local and corporate decision-makers, Meyer said. DOE’s role is “to provide light-handed, non-prescriptive, conceptual and technical assistance to those with decision responsibilities,” he added.

FERC Commissioner Tony Clark noted that such an approach aligns well with the government’s authority in planning and implementing change in transmission planning.

“Barring any major federal legislative change in the electricity policy area, … what you’re probably dealing with is a transmission planning policy that has to be, by its very nature, a bottom-up process,” Clark said, noting that any federal process “has to take the individual legal realities that each [utility faces] and use that to facilitate planning as opposed to imposing it from the top down.”

That view seemed to resonate with at least one industry panel member.

“We view [our customers] as our stakeholders and having the federal government involved could be counterproductive,” Flynn said.