Idea of the Day: FERC's New Rule Will Lead to New Transmission Lines

July 29, 2011

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It takes a special person to fully understand all 620 pages of the Federal Energy Regulatory Commission’s new Order Number 1000, “Final Rule on Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities.” Most likely that special person is a very well-compensated lawyer. Regular people only need to understand that this is likely the most progressive clean energy action the federal government will take this year. Order 1000 will fundamentally improve the way new transmission lines are planned and paid for, resulting in thousands of miles of new lines that will bring renewable energy to your house.

First, a little background on why new transmission lines are important. Renewable energy companies face a challenge that’s universal to businesses that create a product: getting the product from the production site to the customer. Some businesses are able to address this challenge by locating their production site near existing transportation resources. A small factory, for example, can be placed next to a railroad spur or near a highway exit. Other businesses are constrained by location but are served by infrastructure that’s been built over the last century. Indeed, grain farmers in the Great Plains can access an extremely well-developed railroad system.

Renewable energy, though, is unique. You can only build wind farms where the wind blows and solar arrays where the sun shines, but this isn’t necessarily where transmission lines exist. So to power our country with renewable energy, we’ll need to build new transmission lines to get that power to market.

FERC’s new rule does two big things that will lead to new transmission lines: It strengthens regional planning processes and clarifies rules on who will pay for new lines—so-called “cost allocation.”

For more on this topic, please see:

• FERC Helps Line Up Clean Energy Projects with New Rule by Richard W. Caperton