The U.S. Department of Energy (DOE) Thursday announced the designation of two draft National Interest Electric Transmission Corridors, where power line projects blocked at the state or local level can appeal to FERC for siting authority. The measure is aimed at addressing critical power supply problems in the heavily populated Mid-Atlantic region and in Southern California.

Siting of the two National Corridors came after a nationwide power congestion study completed by DOE last August and consideration of two rounds of comments from interested parties. The process now calls for a 60-day comment period and public meetings before DOE Secretary Samuel Bodman issues a final decision on the corridors.

DOE identified the two areas “where consumers are currently adversely affected by transmission capacity constraints or congestion” as the Mid-Atlantic area including counties in Ohio, West Virginia, Pennsylvania, New York, Maryland, Virginia, and all of New Jersey, Delaware, and the District of Columbia, mainly the regions served by the Pennsylvania-New Jersey-Maryland Interconnection (PJM) independent system operator and the New York Independent System Operator (NYISO).

Also designated was a Southwestern area including counties in California, Arizona, and Nevada. PJM has supported the national corridor concept on its grid in order to get needed power lines built before there is a major breakdown. California officials, as usual, have opposed federal intervention.

At this point, DOE said the congestion problem mainly means higher electric bills for consumers since higher cost generators must be used while lower cost power plants stand idle for want of transmission lines. But, reliability concerns are also present and if new lines are not built, there could be breakdowns.

The designation of the national corridors, authorized in the Energy Policy Act of 2005, allows the federal government to step in if surrounding states and localities cannot agree on a route for necessary electric power transmission. Within a National Corridor, transmission proposals could potentially be reviewed by the Federal Energy Regulatory Commission, which would have siting authority supplementing existing state authority.

In the event of a FERC siting proceeding, the agency would have to conduct an environmental review, which would include consideration of alternate routes. A federal permit could empower the permit holder to exercise the right of eminent domain to acquire necessary property rights to build a transmission project. That authority could only be exercised if the developer could not acquire the property by negotiation, and even then, the authority would not apply to property owned by the United States or a state, such as national or state parks.

DOE concluded that transmission constraints have been limiting electricity flows on key trunklines in PJM and NYISO since 2004, causing persistent congestion that adversely affects consumers in downstream urban load centers, including those in the metropolitan New York City area, New Jersey, eastern Pennsylvania, Delaware, eastern Maryland, the District of Columbia and northern Virginia. While the congestion problems are in the eastern areas closer to the coast, the national corridor extends to the west where the new transmission lines would have to come from.

Without corrective action, the congestion would continue or worsen, DOE said. The congestion results in the overuse of high-production-cost generators in eastern PJM and southeastern New York State, while generating capacity at lower-production-cost generators in western PJM and western and northern New York State is available but inaccessible.

Congestion increases costs and threatens reliability. DOE cited a PJM report showing total congestion costs within its footprint of $2.09 billion for 2005. And analyses conducted by PJM project that without the addition of new west-to-east transmission capacity, reliability violations will occur in the Baltimore-Washington-northern Virginia area by 2011, in northern New Jersey by 2014, and in central Pennsylvania by 2019. Similarly, NYISO reports that due to the combination of demand growth, retirement of aging generation capacity and transmission constraints, resource adequacy violations are expected in southeastern New York state by 2011 unless corrective actions are taken.

In the draft Southwest Area National Corridor, there have been problems since at least 2004 with key transmission paths into and within southern California. The paths have been constrained, causing persistent congestion that adversely affects consumers in downstream urban load centers. Here again congestion problems are predicted to continue and may threaten reliability.

“In recent years, the electricity supply capability within Southern California, combined with supplies that can be imported from external sources, has been barely enough to meet peak electricity demand. In the summer of 2005, the California Independent System Operator (CAISO) declared two ‘Stage 2 Emergencies’ in Southern California (July 21 and 22) and a transmission emergency occurred on August 25 that resulted in the curtailment of 900 megawatts (MW) of firm load.” In the summer of 2006, rolling blackouts were avoided only through a combination of good fortune and extraordinary efforts by all concerned, DOE pointed out.

CAISO expects that electricity supply resources in Southern California will be very tight again in summer 2007. The region has a load growth rate of approximately 1.5% annually, which translates into a total of approximately 657 MW of new load that needs to be served each year. CAISO notes that this rate of load growth, combined with the threat of extreme weather conditions, such as a one-in-10-year heat wave, could mean that by 2015, the loss of the transmission capacity in a single critical transmission path could necessitate the curtailment of approximately 1,500 MW of load. The California grid agency also noted that the San Diego area is projected to be deficient in overall generation capacity by 2010 due to severe import limits.

Also, there are looming reliability problems on the South of Lugo path, a major CAISO internal path that serves the Los Angeles Basin. Similarly, the Los Angeles Department of Water and Power (LADWP) stated in its comments to the department that: “Zone SP26 is a large load center that is currently experiencing reliability problems because of transmission constraints… Zone SP26 will likely continue its dependence on imports, so transmission improvements are needed to avoid future violations of reliability standards…”

As for the possibility that additional national corridors might be designated, DOE notes that its interpretation of the authority conferred by the Congress includes “not only constraints that cause persistent congestion, but also constraints that hinder the development or delivery of a generation source that is in the public interest.” That means DOE could designate a national corridor based on “a showing of the existence of a constraint, including the total absence of a transmission line, that is hindering the development or delivery of one or more generation sources that is in the public interest, regardless of whether there is congestion and without the need for any additional demonstration of adverse effects on consumers.”

In its study last August DOE identified another four areas as “Congestion Areas of Concern” (i.e., areas where a large-scale congestion problem exists or may be emerging but more information and analysis appear to be needed to determine the magnitude of the problem): New England; the Phoenix-Tucson area; the San Francisco Bay area; and the Seattle-Portland area.

During the comment period on the two draft national corridors, DOE will confer with affected states and will hold three public meetings: DC metro area on May 15; San Diego, CA, on May 17; and New York, NY, on May 23.

Additional information and a copy of the Federal Register notice are available at https://nietc.anl.gov.

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