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Virginia electric utilities and co-ops weigh in on possible transmission reforms

Virginia Mercury
Virginia Mercury
 2021-10-22
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With renewables poised to flood the electric grid and a rising push for electrification of everything from vehicles to appliances, federal regulators and electricity companies are zeroing in on what they say is a weak link in the system: transmission.

Transmission is often called the backbone of the electric grid. It’s how large quantities of electricity get from the places where power is generated to the places where it’s needed. (The third component of the grid, distribution, deals with transporting those electrons into actual homes and businesses.)

But while building transmission has never been a simple job, it historically was much more straightforward. Electricity flowed one way, from power plants outward. Fewer, more centralized plants supplied everyone. And those plants were typically sited near the places of greatest need, like cities and industrial centers.

Today all that is changing. According to an examination by Dominion Energy of projects pending federal approval for interconnection to the PJM grid — of which Virginia is a part — 562 of 568 projects proposed for the utility’s zone are for renewables. Increased “distributed” generation like rooftop solar means that electricity now flows not just from the grid to the customer, but also from the customer to the grid. Instead of a few large plants, electricity will also now flow from a growing number of sites that produce power intermittently. And renewables, which depend on geographical and climatic conditions to produce electricity, are less likely to be sited near load centers.

Consequently, the Federal Energy Regulatory Commission is looking at whether decades-old systems for planning and building out transmission need to be overhauled “and, if so, which changes are necessary to ensure that transmission rates remain just and reasonable and not unduly discriminatory or preferential and that reliability is maintained.”

Several Virginia utilities and electric co-ops have weighed in on that debate in comments filed with FERC this month. Old Dominion Electric Cooperative, which supplies power to nine of the state’s 13 electric co-ops, did not file any comments, but Dominion Energy, Appalachian Power’s parent company American Electric Power and Northern Virginia Electric Cooperative did.

Here’s just a few of the takeaways from their many thoughts on what does — and doesn’t — need to change.

Dominion Energy

Dominion, Virginia’s largest utility, is clear that reforms are needed: “The current transmission planning and generator interconnection processes are antiquated for today’s energy objectives and have grown increasingly unworkable,” the utility told FERC.

One of the problems Dominion says is plaguing the system? “Speculative projects” that developers start down the federal approval process before they’re sure they can be built.

In the PJM grid, any new generation proposed triggers a study of how its interconnection to the system would affect the broader network. But if a project drops out of the study queue, “new studies of the power flows, etc., must be made, with a ripple effect to all the other projects in the queue,” says Dominion.

“Fundamentally, the underlying problem with the current structure is that it is reactive and sequential, thereby resulting in endless studies that overwhelm the process and result in delays in building new transmission and interconnecting new generation,” the utility wrote.

Instead, said the company, “the ideal collaborative planning process” should aim to “identify the generation needed to serve native load for an identified time frame and the associated transmission upgrades needed to achieve this projected need, rather than to allow unfettered development and interconnection of generation that is not tied to what is actually needed to ensure reliable service to customers.”

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American Electric Power

American Electric Power, the parent company of Appalachian Power and the owner of the nation’s largest electric transmission system, also is firm that reforms are needed in the face of increasing renewables development and “increasingly frequent extreme weather events and other risks posed by the changing climate.”

In particular, AEP says the federal government should start requiring long-term (defined as 20-year) evaluations of transmission needs every three years. These evaluations should take into account “the impact of electrification and extreme weather events” and should also shift away from a project-by-project approach to planning to one centered on a portfolio of projects that work together.

“By looking at regional planning on a portfolio, rather than individual project basis, regions will be able to take advantage of the efficiencies of a number of transmission projects that provide greater overall benefit to the grid as a portfolio than they provide on an individual basis,” AEP wrote.

But more even than regional planning may be required, in AEP’s view, due to the vagaries of climate change. Toward that end, it proposes “a minimum interregional transfer capability” that FERC could require to ensure that different regions can supply power to each other in the event of issues.

Among its many suggestions, AEP also takes a swing at the speculative project problem, suggesting that fees for the interconnection studies or the requirement of a bond that would be forfeited if deadlines aren’t met could discourage such projects from jumping into the queue too early.

Northern Virginia Electric Cooperative

The nonprofit NOVEC takes a totally different tack from the investor-owned utilities: “Existing processes, while not perfect, have functioned to provide for ever-increasing investment in new transmission,” the co-op wrote. “The commission is not confronted with a broken, non-functioning set of processes. Improvement is possible, but care should be taken to avoid ‘surgery with a sledge hammer’ when more modest and more precise measures may be all that are needed.”

Most of concern to NOVEC is that changes to the current system could “promote or permit heavy investment in transmission to accommodate anticipated generation that may or may not actually materialize.”

The co-op points out that while state policies like those in Virginia support solar development, major concerns exist over issues like “the conversion of prime agricultural land to non-food producing land,” changes in landscape aesthetics and watershed impacts, all of which “must be carefully considered in the context of how to design the grid of the future.”

“The challenge is to promote efficient and transparent planning for a new world to enable grid investment on pace with electric demand without promoting or permitting costly investment that does little more than to burden customer rates,” NOVEC wrote. “There must be a demonstrated benefit to customers that justifies an investment. ‘Build it and they will come’ borrows from an iconic catchphrase for a mystical baseball field, but is not an appropriate or responsible basis for long-term transmission planning or cost allocation.”

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