The Scene
The U.S. clean energy transition is stalled at a small Mississippi River wildlife refuge on the border between Wisconsin and Iowa.
At the end of March, a federal judge temporarily blocked the construction of the last two miles of a 102-mile, $649 million interstate electricity transmission line, siding with a coalition of environmental groups that had sued over its proposed route through the refuge. The energy companies behind the project say they painstakingly selected a course with minimal environmental disruption, following the path of an existing road which will also allow a smaller transmission line that already crosses the refuge to be dismantled. Last week, the companies appealed the injunction, leaving the line’s fate uncertain.
The Cardinal-Hickory Creek line is the latest example of a key obstacle to decarbonizing the U.S. electric grid: The long, high-voltage transmission lines needed to carry power from windy and sunny places into cities and factories are being built at a drastically slower pace than what is needed for the country’s clean power goals, in part because of a counterintuitive alignment of interests between some environmental and Indigenous groups, alongside the utilities they often despise.
“This line is just the tip of the iceberg,” Kerri Johannsen, energy program director at the Iowa Environmental Council, a nonprofit that has supported the project.
Tim’s view
Several barriers are holding up transmissions projects across the United States, and environmental litigation, as in the CHC case, is but one: The grinding pace of federal permitting, structural disincentives for utilities to invest in transmission, and in some cases concerted lobbying efforts by utility companies to weaken policy changes that could streamline the process are all also to blame.
Federal regulators are expected to issue a new set of rules soon that could address some of these obstacles, potentially amounting to one of the most impactful climate policy reforms of the Biden administration — if it can placate both the community and environmental groups that are blocking transmission projects on cultural or conservation grounds, as well as utilities disinclined to cede control of their local monopolies.
There have been some recent notable successes in transmission, including the launch of construction on a line to bring wind power from Wyoming to California, and the close of an $11 billion financing round for a massive wind-and-transmission project across the southwest. CHC itself is the only incomplete line from a batch of 17 regional transmission lines around the midwest that were initially approved in 2011.
But in general, the pace is moving much too slow, especially as EVs and data centers add far more demand. The incomplete CHC line is holding back 25 gigawatts worth of clean power projects across the Midwest — about the capacity of 2.5 million rooftop solar arrays. Add up all the high-voltage transmission systems currently planned or under construction in the U.S. and you get about 10,000 miles, with a capacity to carry 132 gigawatts of new power, according to the consulting firm Grid Strategies. That’s no more than 10% of what the country needs to add by 2035 to have a grid capable of delivering the much greater volume of power that will be required for net zero emissions, according to the firm. If the current rate of growth of high-voltage transmissions persists, a Princeton study warned, 80% of the emissions benefit of the Inflation Reduction Act could be lost.
The frustrations of local communities and environmental groups are well known. But a bigger — and less remarked upon — part of this problem is the fact that transmission often represents a threat to utilities, said Ari Peskoe, director of Harvard Law School’s Electricity Law Initiative. Utilities in regulated power markets make a lower profit margin on transmission projects than they do on new power plants. They don’t like the idea of cheaper power sneaking into their service area, and if transmission lines do have to get built, they don’t like relinquishing control and profits to another company.
“The biggest obstacles to developing the network are a lack of planning, and deciding who should pay for new large-scale transmission projects,” he said. “And legislative efforts to resolve those questions have been unsuccessful because of the role utilities have played in blocking them.”
Peskoe is referring to the Big Wires Act, introduced last year by Rep. Scott Peters (D-Calif.) and Sen. John Hickenlooper (D-Colo.), which would have given regional grid operators more authority to make planning and cost allocation decisions, and also required them to be able to move the equivalent of 30% of their peak power demand between regions. But after lobbying against the bill by utilities including Duke Energy and Southern Company, the only part of the bill that passed into law was a requirement for a three-year federal study on the benefits of transmission that experts say is redundant. A spokesperson for Peters said he is still working to fit those transfer requirements into other permitting legislation.
Know More
New laws aren’t the only solution. This month, Peskoe said, the Federal Energy Regulatory Commission is expected to finalize new rules for any utility or company that operates transmission infrastructure. The rules are likely to delegate more authority to state regulators about the need for and siting of transmission lines. And they require the companies to plan their future transmission earlier, and to consider a broader range of potential benefits of those projects. Today, utilities are able to downplay the need for transmission lines if they aren’t critical for relatively near-term power reliability — even if bringing in solar from across state lines would be cheaper for consumers.
Phil Moeller, a former FERC commissioner and now executive vice president at the Edison Electric Institute utility trade group, which counts Duke and Southern as members, said EEI’s members are generally satisfied with the anticipated shape of the FERC rules, and called long-distance transmission “the ultimate enabler” for a more reliable and lower-carbon grid.
But if utilities are going to be made to plan, they want first dibs at the profits. Moeller said EEI is urging FERC, in its upcoming rule, to reinstate a federal “right of first refusal” policy that grants utilities the exclusive rights to build new transmission projects in their territory (and use the capital spending to justify higher rates), provided they bring in at least one other company as a partner. This right was suspended in 2011, and utilities have been fighting to get it back ever since. Right of first refusal will prevent litigation and save time and cost, Moeller said. But many analysts see the policy as anti-competitive and say it will raise costs without unlocking a significant boost in transmission investment.
Room for Disagreement
Terrell McCollum, a spokesperson for Southern Company, said the company has already spent $1 billion on transmission upgrades, and “would support interregional transmission lines upon a demonstration of need and a direct economic and reliability benefit for all our electric utilities’ customers.” And to some extent, building out transmission infrastructure can also be somewhat curtailed by more distributed solar, software to manage supply and demand, large energy storage systems, and energy efficiency upgrades. “We want to build the right amount of transmission — not any more than we really need,” Johannsen said.
The View From Wisconsin
Howard Learner, executive director of the Environmental Law & Policy Center, a nonprofit legal group representing the Wisconsin wildlife organizations suing to stop the CHC line, rejected the suggestion that his clients are NIMBYs, and pointed to a 2022 district court ruling in which the judge warned the transmission company that continuing to build the line up to the refuge before a final decision was reached on its path amounted to “an orchestrated trainwreck.” Learner said he is broadly supportive of transmission lines, but that more thoughtful high-level planning is needed. “We believe in climate change solutions and we want to support renewable energy,” he said. “But you don’t have to sacrifice our national wildlife refuges to achieve our renewable energy buildout in this country.”