“It’s not really clear” what impact a review of the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan – as called for under a recently signed presidential executive order – will have on electric transmission development in the United States, a Duke-American Transmission Co. (DATC) spokesperson told TransmissionHub on March 29.
“There are several drivers of the changing generation fleet such as economics and new technology,” the spokesperson added. “There also are other need drivers for transmission development including maintaining reliability and addressing aging transmission infrastructure.”
The spokesperson said that review of energy regulations should be done with an eye toward promoting development of electric transmission, such as ensuring that FERC’s methodology for establishing returns on equity (ROEs) produces ROEs that are stable and reflect the risk associated with owning/developing transmission; that FERC evaluate interregional planning processes put in place under FERC Order No. 1000 and remove obstacles to developing interregional transmission projects; and improve the process for issuing federal permits for transmission, including the U.S. Department of Energy’s (DOE) coordination role (e.g., requiring the development of a firm process timeline for project reviews) and environmental review procedures.
The executive order – which President Donald Trump signed on March 28 – calls for, among other things, the heads of agencies to review all existing regulations, orders, guidance documents, policies, and any other similar agency actions that potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources. For purposes of the order, “burden” means to unnecessarily obstruct, delay, curtail, or otherwise impose significant costs on the siting, permitting, production, utilization, transmission, or delivery of energy resources, according to the executive order.
Regarding the Clean Power Plan, the executive order calls for the EPA administrator to immediately take all steps necessary to review:
- The final rule entitled, “Carbon pollution emission guidelines for existing stationary sources: Electric utility generating units”
- The final rule entitled, “Standards of performance for greenhouse gas emissions from new, modified, and reconstructed stationary sources: Electric utility generating units”
- The proposed rule entitled, “Federal plan requirements for greenhouse gas emissions from electric utility generating units constructed on or before January 8, 2014; model trading rules; amendments to framework regulations; proposed rule”
In terms of what the executive order means for electric transmission development in the United States, an ITC Holdings spokesperson on March 29 told TransmissionHub: “We see merit in infrastructure investment plans that carry provisions for modernizing perhaps the most critical national infrastructure of all – our interstate high-voltage transmission system. We look forward to working with the new administration to remove impediments to private investment in electric infrastructure development.”
Discussing what the executive order means for the Clean Power Plan going forward, as well as for the future of electric transmission projects designed to transport renewable energy, the spokesperson said: “Regardless the direction of energy policy, market forces are already moving the utility industry toward a cleaner future mix of energy generation. A modernized transmission grid is needed to promote continued resiliency of the bulk power system during this transition to a more diverse national energy portfolio.”
In response to how the executive order affects ITC’s plans in terms of electric transmission projects, the spokesperson said: “From a transmission infrastructure point of view, we look forward to a more collaborative planning environment balanced between national and state needs, all in the best interests of energy consumers. As the backbone of our modern economy and society, electric infrastructure is one sector that can accelerate economic advancement, create jobs and save consumers money, if given due attention.”
ITC is a Fortis (NYSE:FTS) company.
An American Electric Power (NYSE:AEP) spokesperson on March 29 noted that from 2000 through 2016, AEP cut its carbon dioxide emissions by 44%.
“AEP had concerns about the basis for EPA’s standards for new coal plants and the legality and complexity of the Clean Power Plan from the beginning, and we worked with the U.S. EPA to try to make improvements to the rules,” the spokesperson told TransmissionHub. “However, some of the fundamental legal flaws remain, and we think it makes good sense for the EPA to revisit the rules and see if there are more effective ways to address greenhouse gas emissions. Due to the stay issued by the U.S. Supreme Court, we hope that the EPA and states can take the time to develop appropriate standards and implement a program with a sound legal and technical basis.”
The spokesperson also noted that over the next three years, AEP plans to invest $9bn in transmission and $4bn in its distribution system to make the grid smarter, more resilient and more responsive to renewable resources and new technologies. “President Trump’s support for infrastructure investment, including transmission, is positive as it will stimulate job growth and enable technological advances and a cleaner energy economy,” the spokesperson said.
AEP also plans to invest $1.5bn in renewables to help make renewable energy resources available to all of its customers, the spokesperson said.
“Our remaining coal plants are well-equipped to meet other environmental requirements, and they are an important element of a secure, reliable and balanced generation fleet that is capable of powering the American economy 24/7,” the spokesperson said.
In a statement provided to TransmissionHub on March 29, Clean Line Energy Partners President Michael Skelly noted that over the last decade, demand for low-cost energy has driven investment in the electric transmission grid.
“Texas leaders oversaw a $7 billion buildout of the state’s electric grid to connect the best wind energy production sites with growing load centers,” he said. “The Clean Power Plan represented another source of growth for the electric transmission sector, but ultimately the economics of electric transmission line projects are driving demand. We are confident that the transmission industry will continue to grow based on demand for access to the lowest-cost energy resources in the country. We are also hopeful that President Trump will continue to use the bully pulpit to move infrastructure projects along.”
An Entergy (NYSE:ETR) spokesperson on March 29 told TransmissionHub that the company is still reviewing the terms of the executive order and that it is too early to comment on specific impacts at this time.
Entergy continues to be focused on its long-term plans, which include “enhancing our generation assets with investments such as our St. Charles Power Station and working closely with our regulators on additional generation and transmission projects to improve reliability and efficiency,” the spokesperson said. “The executive order does not change Entergy’s commitment and obligation to deliver safe, reliable and sustainable energy to our customers.”
Similarly, a Westar Energy (NYSE:WR) spokesperson on March 29 told TransmissionHub that the company is still reviewing the order.
“In Kansas, we have been very successful in developing the transmission grid in a safe, timely and cost effective manner while being a good environmental steward for the past decade,” the spokesperson said. “This is largely the result of state and federal regulatory agencies taking a supportive and constructive role. It is also the result of Westar collaborating with landowners, local organizations and cities on project development.”