The ongoing discourse surrounding the Federal Energy Regulatory Commission’s (FERC) pending transmission rule demands a robust response to misconceptions that threaten promising solutions to regional transmission planning and cost allocation. For consumers, policymakers, and stakeholders across the country, it is critical to confront these misguided narratives directly.
Commissioner Mark Christie’s recent letter contains a concerning parochial and outdated perspective that undermines the very essence of effective federal regulation. It’s important to address the flaws in his arguments and champion a more meaningful approach to transmission planning for the 21st century.
The first short-sighted claim in Christie’s letter is that FERC should defer to individual states on regional and national transmission planning. While some states do have their own transmission planning organizations, the interconnected nature of the energy grid necessitates a broader perspective. The Commission’s role is to ensure the efficiency and reliability of the entire grid, and the surest pathway to these goals is for states to engage with their neighbors on infrastructure planning, which FERC can and should support.
Moreover, the notion that costs should not be allocated to consumers outside of a specific state’s jurisdiction is fundamentally flawed. FERC’s existing cost allocation rules incorporate six principles, including the consumer protection and language included in RM21-17-000, “those that receive no benefit from transmission facilities, either at present or in a likely future scenario, must not be involuntarily allocated any of the costs of those transmission facilities.” At the same time, the “beneficiary pays” principle is also sound: costs should be shared among those who benefit. Transmission is a shared resource that benefits multiple states and regions via increased reliability and access to all forms of lower-cost energy. To suggest that consumers in neighboring states should not contribute to projects that serve the collective good (including themselves) invites free ridership and is both narrow-minded and contrary to the principles of interstate cooperation.
Commissioner Christie’s emphasis on the need for consent from all affected states for specifying cost allocation needs to be more practical and include the reality of interstate transmission. Such a proposition has the potential to empower unreceptive states to even engage in good faith in transmission planning processes. A single state can, and in some cases has, unilaterally imposed gridlock and inefficiency, thus hindering the development of critical infrastructure projects and foregoing valuable economic development. That is not to say that states have not or do not engage in good faith planning, but rather allowing a single state to exercise an effective veto will ensure transmission does not get built in an effective manner. A more pragmatic approach is to establish fair and transparent cost allocation mechanisms that are guided by best-practice planning and consider the broader benefits of transmission projects.
Furthermore, Commissioner Christie’s threat of prolonged litigation over FERC’s proposed rule perpetuates uncertainty and delays much-needed investment in transmission infrastructure. His comments almost serve as a “call to action” to bring litigation against FERC over the ongoing rulemaking. Rather than obstructing progress with legal battles, Christie should focus on crafting regulations that balance the interests of stakeholders, encourage good-faith engagement, and promote the grid’s long-term stability.
The pending transmission rule is about correcting a deeply entrenched pattern of investing in small, localized projects at the expense of more extensive, cost-effective solutions. It’s not about, as is being suggested, burdening consumers in states that have not consented to bear such costs. FERC’s existing cost allocation rules are actually designed to prevent such unfair impositions, and any insinuation otherwise is misleading.
To that end, the Republican members from New York, Congressmen Andrew Garbarino, Anthony D’Esposito, Nick Langworthy, and Brandon Williams, should be commended for their proactive advocacy on this issue. Their own letter stated, “It is time to unlock America’s energy potential and create regulatory certainty for our nation’s utility sector. A strong, meaningful, and final rule on transmission must be issued as soon as possible.” Their dedication to representing the interests of New Yorkers while advocating for reasonable reforms to the transmission planning process deserves recognition and support. Their leadership is vital to ensuring a collaborative, bipartisan approach to transmission permitting and buildout.
Ultimately, the path forward for FERC lies in adopting a collaborative approach to transmission planning. One that respects the diverse interests of stakeholders and ensures that those who benefit from transmission pay their fair share of the costs. It’s time to move beyond parochial concerns and work together to build a more resilient and secure grid for all Americans.