We Don’t Need Another Interregional Transmission Study to Take Action

The value of interregional transmission has been studied for decades. Now we need help building it.

Over the last year, increasingly frequent extreme weather and growing demand have pushed the fragmented US grid to and beyond its limits. While new clean and low-cost energy generation projects could help, they often have to wait four years or more to connect to the grid. Nationwide, more new projects are now waiting in interconnection queues than there is existing generation capacity — the biggest imbalance in decades. One root cause is a lack of long-distance electricity transmission capability. This would both help connect disparate grid regions to keep the system in balance during extreme events and allow remote but low-cost and clean generation to reach demand centers. Unsurprisingly, these grid bottlenecks have now grown beyond the interest of industry wonks and captured the attention of major news outlets, including The New York Times, L.A. Times, NPR, The Economist, and Mother Jones.

Laudably, some members of Congress are proposing urgently needed grid reforms. During the debt ceiling negotiations in May, Congress considered legislative language from the Building Integrated Grids With Inter-Regional Energy Supply (BIG WIRES) Act. These reforms would have required each major US grid region to ensure it can transfer at least 30 percent of its peak electricity demand to and from its neighbors. Such a minimum interregional transfer capability requirement would have significantly increased the amount of high-voltage electric transmission between regions, making the system more resilient to extreme weather. Unfortunately, all that made it into law (the Fiscal Responsibility Act of 2023) was a directive for the North American Electric Reliability Corporation (NERC) to spend three years developing a study on the need for more interregional transmission.

While some in Congress pointed to the new NERC study as necessary to better understand this complex topic, the reality is that the value and need for interregional transmission has been studied and well understood for decades. As far back as 1961, President John F. Kennedy directed an interregional transmission study that ultimately led to the construction of the Pacific Intertie. This vital link between California and the Pacific Northwest has consistently proven its value — for resilience, customer savings, and emissions reductions. Over the years, many academic and government institutions have conducted sophisticated studies with a broad range of assumptions and methodologies. Just this February, the Department of Energy (DOE) conducted a comprehensive meta-analysis of this rich body of research in its National Transmission Needs Study. DOE reviewed over 50 different industry reports and summarized 200 scenarios from six state-of-the-art modeling studies from both government and academic research institutions, reflecting a wide range of possible energy futures. The results overwhelmingly show that the United States will need a lot more transmission, especially between those regions of the country that have high potential for economic clean electricity production and those that have high demand for it.

Using the BIG WIRES legislation as an example, we illustrate the extent to which a minimum interregional transfer capability requirement would help meet future transmission needs (Exhibit 1). We assumed an aggregate requirement of 30 percent of each region’s peak electricity demand, which means if a region’s peak demand is 100 gigawatts (GW), that region would need to be able to transfer, in aggregate to and from its neighbors, at least 30 GW. We contrasted the resulting requirements for each major US grid region with 1) the range of likely future needs from the DOE study and 2) two estimates of their current transfer capabilities — one based on power flow modeling, the other based on recorded historic transfers. The result: across all regions, a 30 percent minimum requirement would be an important first step in yielding significant, critically needed new transmission to boost resilience and to get us closer to the low end of the range of likely future needs. However, it remains a minimum requirement and would therefore, by definition, not address the bulk of future transmission needs for enabling reliable and economic decarbonization. Especially in regions that have vast potential for clean, low-cost energy but comparatively little electricity demand (like the Midwestern grid regions SPP and MISO), a minimum requirement would fall significantly short of what is likely needed.

It is important to note that we provide two estimates of current interregional transfer capabilities across the main US grid regions shown above. The first estimate is based on historical transfers (blue bars) recorded by the Energy Information Agency (EIA). The second estimate is an aggregation of bilateral modeled transfer values (grey bars) from the DOE study. While the first one may somewhat underestimate actual transfer capability, the second likely significantly overestimates it. To illustrate the difference, we compared both of our estimates of transfer capability for a single region: SPP (see Exhibit 2 below).

The scale and urgency of today’s transmission needs, underscored by both the existing interconnection queue and numerous forward-looking studies, means that we cannot afford and do not need to wait any longer — let alone three years — for another study to take action. According to some estimates, the United States needs to at least double its overall transmission capacity in the next two decades. Yet, building transmission infrastructure is a notoriously time-consuming process. The major (inter)regional transmission projects under construction today have taken an average of 10 years from project proposal to construction start, according to a new Grid Strategies report. All active major projects today (including those that have not started construction yet) would add only 15 percent to the US transmission system’s overall capacity, according to the report.

Ambitious action is urgently needed to turn the US transmission grid from a bottleneck into an enabler of a clean, reliable, and affordable energy transition. This should include:

1. Implementing a minimum interregional transfer capability requirement. We do not need and cannot afford to wait three years for another study, as others have noted. Congress should provide clear guidance and support for transmission expansion, starting with an interregional transfer capability requirement. One option is to mandate the Federal Energy Regulatory Commission (FERC) to set a minimum requirement, such as the BIG WIRES bill proposes. By doing this quickly, Congress would provide a critical first step and create an insurance policy against increasingly frequent extreme weather.
2. Mandating strong interregional transmission planning and cost allocation standards. FERC currently does not require interregional transmission planning, only interregional coordination, which has not resulted in any significant projects. Building on its Notice of Proposed Rulemaking (NOPR) on improved regional transmission planning, FERC should likewise mandate interregional proactive, forward-looking, scenario-based, long-term transmission planning processes across the country with clear cost allocation principles based on a standard, comprehensive list of benefits. Notably, several bills recently introduced in Congress would require FERC to mandate interregional planning and clarify cost allocation (e.g., Senator Ed Markey’s (D-MA) CHARGE Act, the CETA Act, put forward by Representatives Sean Casten (D-Ill.) and Mike Levin (D-CA), and the PEER Act, championed by Senators Tom Carper (D-DE) and Brian Schatz (D-HI).
3. Clarifying and streamlining federal and state permitting of transmission lines. As noted earlier, long-distance, high-voltage transmission lines currently take 10 years on average to get built, much longer than what is required to build out the grid of the future. Several legislative proposals (CHARGE Act, CETA Act, PEER Act, SITE Act, FASTER Act) introduced in Congress over the past few months include key provisions that could expedite this permitting process while enhancing proactive and equitable community engagement. Congress should build on the Fiscal Responsibility Act to continue to streamline permitting for transmission lines while prioritizing proactive community engagement.

Technical Note

We calculated both the modeled transfer aggregate of current interregional transfer capability (grey bars in the first exhibit, grey line in the second exhibit) and the range of likely future needs (yellow bars in the first exhibit) for each region as the simple sum of that region’s bilateral transfer values reported by the DOE study. For example, DOE provides the modeled bilateral transfer values between SPP and each of its neighbors, so our transfer aggregate for SPP is simply the sum of those bilateral values. This approach likely overestimates the amount of power that can actually be moved between regions for three main reasons. First, it does not consider the coincidence of interregional flows and effectively assumes each of the links between a region and its neighbors can be utilized at its full capacity simultaneously. In the real world, we would expect both economic and physical constraints on this assumption. Second, it does not consider potential grid bottlenecks within each region that may pose additional constraints on flows through the links between the regions. Third, the numbers we use are based on simplified network capacity expansion models, which do not capture the full range of real-world network dynamics that may limit interregional transfers. Therefore, we contrasted our aggregated model numbers from the DOE study (grey and yellow bars in the first exhibit, grey line in the second exhibit) with historically recorded peak transfers (blue bars in the first exhibit, blue lines in the second exhibit) provided by the Energy Information Agency (EIA). Importantly, these EIA numbers could in turn be somewhat of an underestimate of actual transfer capability. This is because the limited available historical record, tracing back to 2016, may not show the full range of possible grid conditions or fully capture operational and economic considerations that could further limit use of available transfer capabilities. In the end, we included both estimates of current transfer capabilities to provide as complete a picture of the system as possible.