The Federal Energy Regulatory Commission ruled that the Iowa Utilities Board's decision to implement an Iowa statute, which obligates electric utilities to purchase power from qualified facilities...
Blackouts? never Again! (But...)
where DOE can say, 'Here is our transmission policy, and here is where the next $100 billion is going,'" Krapels says. "That is a recipe for disaster. You need federal oversight on the one hand, but you need regional plans on the other hand."
Energy Secretary Spencer Abraham has made it clear that he believes the nation needs to build transmission lines. As a result, electric rates will go up.
Krapels agrees. "We have to pay more for transmission, and the reliability part of it is going to be paid for by everybody equally-a socialized investment."
Farney says the August blackout will help raise the visibility of the long-awaited federal energy bill. "I'm kind of cynical about the political process, and I'm not sure the energy bill will have any effect on whether we have blackouts in the future that are similar to this," he says. "I really believe that what we need is something more practical, more down to earth, as simple as the ownership of these assets getting some certainty about the future of these assets."
NIMBY and Regulators
The industry currently must deal with the AC grid it now has, but recent events show even coordinated planning can run into trouble. Just look at the experience of two merchant transmission projects that aimed to fix highly congested electric paths, places where everyone agreed help was needed.
It is common industry knowledge that highly constrained southwestern Connecticut is in dire need of more transmission. But a line already built to ease that congestion has been sitting dark. That led to Secretary Abraham's issuing an unusual DOE emergency order on Aug. 15, in response to the blackout, directing the New York and New England ISOs to activate, if necessary, the 330-MW Cross Sound Cable connecting Shoreham, Long Island, and New Haven, Conn.
The direct-current buried submarine cable, owned by merchant transmission company TransEnergie U.S. and stymied by Connecticut politics as well as environmental politics, presents a microcosm of the difficulties in getting new transmission on line. The cable, which can send power in either direction, is considered by many to be part of the solution to Connecticut's expensive congestion problems. ISO New England estimates the congestion costs for 2003 in southwestern Connecticut to be between $50 million and $300 million.
But Cross Sound Cable's use is being held up because the 24-mile cable does not meet the depth requirement of its permits in a few short sections, mostly due to bedrock that was not known to exist when the permitting was done. The Connecticut legislature has enacted a moratorium on its use, but the cable's recent activation in response to the blackout could change that, as it helped to stabilize the grid. Both New York senators have written letters to Abraham encouraging him to extend the emergency order to allow continued operation of the cable past Sept. 1.
A different situation arose for Trans-Elect, chosen to upgrade the notoriously constrained Path 15 in northern California. That project had come under some difficulty back in March, when a California PUC law judge