Effective and Empowered Collaborative Institutions for Multi-State Decisions on Transmission Planning and Cost Allocation

March 26, 2010

By Malcolm McLellan and Lou Ann Westerfield

Today, energy policy in the United State and in many states encourages the development of new renewable power resources over carbon based resources, with wind being the primary resource of choice.  However, generation facilities using wind as their fuel must be constructed in specific geographic locations where the wind blows with sufficient intensity to make power production commercially viable.  In most cases, these locations are far from load centers and the existing infrastructure used to move energy to load.  The challenge, therefore, becomes the construction of the transmission facilities necessary to deliver power from these remote wind resources to load.  Solving this challenge requires a clear understanding of who pays for the construction, operation, and eventual removal of the new transmission infrastructure.  The crucial element in this dynamic is the line’s route, as the line’s route affects who is impacted (both positively and negatively).

Adding to the complexity of this problem is the reality that most transmission lines span multiple states with each being affected differently. For example, it is common for a generation facility to be located in one state, with another hosting the transmission line that merely moves power across the state, while a third state contains the load that will consume the energy. Then add to this mix the fact that the electrical effects of the new transmission lines are very difficult to isolate. Since the laws of physics control the flow of energy, a new transmission line may impact other existing or proposed lines and/or systems. Thus, many people have legitimate interests in new transmission lines. In this situation, the reality is that the greater the number of people involved in the decision making process the greater the probability of divergent interests, thereby reducing the probability of finding a sufficiently sized group that is capable of making the decisions necessary to build the line.

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Written as a companion article to a paper titled "The Public Interest Jurisdictionally and Extra-Jurisdictionally: Toward Effective and Empowered Collaborative Institutions for Multistate Decisions on Transmission Planning and Cost Allocation" (August 11, 2009).