Bill could revolutionize renewable energy delivery from Nevada and transform state economy
March 5, 2009
Washington, D.C. – Nevada could receive an enormous boost toward becoming the nation’s leading renewable energy exporter under legislation introduced today by Nevada Senator Harry Reid.
Reid believes Nevada can and should lead the country’s clean energy revolution and transform the state economy. Tapping into Nevada’s enormous renewable energy potential and delivering that power safely, reliably and affordably to consumers across the country will require significant reforms to the policies governing the nation’s transmission system.
Mr. President, as John F. Kennedy said about 50 years ago, “The Chinese use two brush strokes to write the word 'crisis.' One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger - but recognize the opportunity.”
America has not one crisis, but at least three crises that loom large before us. The economy is in obvious turmoil, pollution is causing the climate to change, and we are far too dependent on oil, particularly oil from unfriendly places around the world. These challenges hamper our security in profound ways.
Fortunately, with a new President and a bipartisan mandate in Congress, the opportunities to change direction and turn crisis into opportunity have never been more abundant. Now is the time to focus our resources on investments that will create jobs today and sustainable economic growth into the future.
I know that we have the technology to use less oil tomorrow then we used today, and even less the day after. We can move quickly toward greater energy independence, but only if we make major investments now in clean energy, like natural gas and electric vehicles and much more efficient fleets, and all produced right here in America and with American jobs.
President Obama’s economic recovery plan is a giant step in the right direction. It provides $11 billion for smart grid technology and expanding transmission to renewable rich areas, as well as hundreds of millions of dollars to promote greater use of alternative fuel vehicles, including plug-in hybrids and fueling insfrastructure. That plan is a massive infusion to help Americans become more energy efficient, including $300 million for energy efficient appliance rebates.
But even if we stopped wasting nearly one-third of the country’s annual current energy consumption – unnecessarily spending trillions of dollars and sending billions of tons of pollution up into the air – we would still need new supplies of clean energy for sustainable economic growth.
Fortunately, Nevada and other parts of the desert southwest have enough solar energy potential to power our country seven times over. If that potential is combined with the wind energy from the Great Plains and the hundreds of thousands of megawatts of geothermal energy deep beneath the earth, the whole country could have cost-free fuel for many generations to come.
Innovators and entrepreneurs in every state have already begun to harness this power. But the field is in its infancy – and it will only mature with significant and sustained support and attention at the federal level.
But we must also focus our attention and investments on planning and siting new electricity transmission and breaking down barriers to a truly national approach.
Otherwise, the vast clean renewable power in the sun, wind and geothermal resources of Nevada, off the country’s coasts in the oceans, in the biomass on our lands, forests and in our cities, and in the remote and rural areas of the country, will never get to consumers.
Our transmission system and its regulations have been built up over many decades with the main target of assuring reliability and availability. Yet the grid is still fragile and not well equipped to meet the demands of this century’s smart technologies or our environmental or national security challenges.
These issues were the topic of focused discussion last week at a genuinely important event – a National Clean Energy Summit hosted by the Center for American Progress (CAP). This followed up on a similar gathering that I hosted in Las Vegas last August with John Podesta and the CAP Action Fund and the University of Nevada Las Vegas.
Last week’s event was no ordinary meeting. It was admirably moderated by former Senator Tim Wirth and included President William Jefferson Clinton, Vice President Al Gore, Energy Secretary Steven Chu, Interior Secretary Ken Salazar, House Speaker Nancy Pelosi (D-CA), Senator Jeff Bingaman (D-NM), Representative Ed Markey (D-MA), energy executive T. Boone Pickens, and leaders from government, business, labor, and the non-profit communities.
In particular, I’d like to note the very constructive participation of the country’s state regulatory commissions and authorities, ably represented by Fred Butler of New Jersey, President of the National Association of Regulatory Utility Commissioners. They have extremely difficult jobs – maintaining reliability, keeping costs down, and being held responsible for the utilities’ every move.
The outcome of our discussion was clear – reforming our energy policies to build a cleaner, greener national transmission system – an electric superhighway – must be a top national priority. However, equally clear was the sense that it will not be easy and will require everyone to work together with common purpose and through a strong public-private partnership to be effective in addressing our grave national challenges.
Mr. President, the need for reform is very clear. That is why I am introducing a bill today that charts a course to a cleaner, greener and smarter national energy transmission system without sacrificing reliability or affordability. This will ensure a more secure and sustainable energy future for America.
Though this bill is loosely based on my legislation from the last Congress, this new and broader version is the product of input and a shared vision from many important stakeholders. In particular, the Center for American Progress and the Energy Future Coalition must be congratulated for their hard work and leadership in this complicated policy area. They have helped make it understandable to many in Washington, D.C.
But no one can beat T. Boone Pickens in explaining to the American people how critically important it is to transform the nation’s electricity grid to accelerate the use of renewable energy. He is a source of immense renewable energy and really helping to drive this issue home.
My legislation will require the President to designate renewable energy zones with significant clean energy generating potential. Then, a massive planning effort will begin in all the interconnection areas of the country to maximize the use of that renewable potential by building new transmission capacity. The states would the propose cost allocation means to fund the new lines in the green transmission grid plans. If either process falters, then the federal government would be given clear authority to keep things moving and get the new transmission built on schedule and funded equitably.
This bill is not perfect and has ample room for improvement. But as the bill works its way through the legislative process, I am hopeful that people will come together in good faith and propose revisions that will help solve the problems that we tried to identify at the Summit. There has already been a great deal of non-partisan, thoughtful work that Congress can draw upon in legislating and I look forward to the hearing that Chairman Bingaman has scheduled on this topic for next week.
Here are just a few of the organizations that provided valuable input in the drafting process for this bill: The Energy Future Coalition; the Center for American Progress; the Pickens Plan; Energy Foundation; Sierra Club; Natural Resources Defense Council; National Wildlife Federation; Audubon Society; The Wilderness Society; Bonneville Power Administration; Western Area Power Administration; Tennessee Valley Authority; Bureau of Land Management; Federal Energy Regulatory Commission; Department of Energy; North American Electric Reliability Corporation; National Association of Regulatory Utility Commissioners; California PUC; Working Group for Investment in Reliable and Economic Electric Systems; Florida Power & Light; Midwest Independent System Operator; PJM Interconnection; ITC Transmission; Trans-Elect Transmission; Pacific Gas & Electric; American Electric Power; American Public Power Association; Large Public Power Council; Salt River Project; National Rural Electric Cooperative Association; Solar Energy Industries Association; Bright Source Energy; RES-Americas; American Wind Energy Association; Iberdrola Renewables; Colorado River Energy Distributors Association; Electric Power Supply Association; National Electrical Manufacturers Association; and many more.
Mr. President, I ask consent that a short summary of the bill appear in the Record following my remarks.
The Clean Renewable Energy and Economic Development Act of 2009 - Summary
Sec. 402. Renewable Energy Zones: This bill directs the President to designate renewable energy zones, which are areas that can generate in excess of 1 gigawatt of electricity from renewable energy, include rural areas or Federal land, and have insufficient transmission capacity to achieve their renewable energy generation potential. This bill excludes environmentally sensitive and culturally significant areas from renewable energy zones.
Electricity from renewable energy is defined to include solar, wind, geothermal, biomass, biogas, incremental hydroelectric capacity and hydrokinetic resources.
Some areas, especially the Western U.S., already have processes in place to identify renewable energy zones. Recognizing the ongoing efforts in the Western U.S., this bill allows the President to use zones designated through existing processes, and sets deadlines on designating renewable energy zones for the Western Interconnection of 90 days after enactment of the bill and 270 days after enactment of the bill for the Eastern Interconnection.
Sec. 403. Interconnection-Wide Green Transmission Grid Planning: Transmission planning today is a geographically fragmented, lengthy process that does not address the types of projects needed to integrate renewable energy into the transmission grid. The U.S. electric transmission network is divided into three interconnections, the West, the East, and Texas. This bill requires participatory and transparent transmission planning on an interconnection-wide basis for green transmission projects to integrate renewable electricity resources from renewable energy zones into the transmission grid. The objective of the planning process is to enhance transmission access for electricity from renewable energy in renewable energy zones, while recognizing national economic, reliability, and security goals. The planning process established in this bill must be based on established and projected Federal and State renewable energy policies and targets. This bill requires the planning process to solicit input from all stakeholders, including transmission owners, regional transmission organizations, independent system operators, State commissions, electricity generators, prospective developers of new transmission and generation resources, regional reliability organizations, and environmental protection and land, water, and wildlife conservation groups.
This bill requires the plan to consider alternatives to new transmission, including energy efficiency, demand response, distributed generation, and cost-effective energy storage.
To expedite building transmission to meet the President’s renewable energy goal, this bill requires the interconnection-wide green transmission plans to be submitted to the Commission within 1 year of the deadline for designation of renewable energy zones.
If a regional planning entity does not organize a planning process, or does not complete a plan by the deadlines established by FERC, this bill gives FERC backstop planning authority to establish a planning process and conduct planning, in consultation with DOE, federal power marketing authorities, the electric reliability organization and regional reliability organizations. This bill also gives FERC backstop planning authority for any state that does not participate in an interconnection-wide planning process.
To cover costs of regional planning entities and states participating in interconnection-wide planning, this bill establishes a surcharge on all transmission customers. The funds from the surcharge will be distributed to regional planning entities and to states whose governors certify that they are participating in green transmission planning for the first year, and subject to timely submission of a green transmission grid plan in subsequent years. State Governors are also required to demonstrate that planning entities are able to effectively represent a wide spectrum of stakeholders, including the protection and conservation of land, consumer protection, and fish and wildlife protection.
Sec. 404. Federal Siting of Green Transmission Grid Project Facilities: Transmission line siting is currently conducted through a separate process in each state, which can cause lengthy delays for multi-state transmission lines. This bill allows transmission project developers to apply to FERC for federal backstop siting for green transmission projects that are part of the green transmission grid plan and integrate renewable energy resources from renewable energy zones, or for transmission projects that FERC determines are needed to integrate renewable generation resources. For states that participate in interconnection-wide planning, this bill requires FERC to consider state recommendations in siting the line, and to work with states to resolve differences. This bill gives FERC the authority to issue a construction permit, including the right of eminent domain, for green transmission projects that meet specific conditions, including a minimum renewable requirement, optimizing transmission capacity, and providing transmission access to states the project passes through. To coordinate the process of siting transmission on Federal lands, this bill sets FERC as the lead agency for environmental reviews, with a single environmental review document, and directs affected agencies to develop a memorandum of understanding, including a schedule for environmental review and a budget necessary to carry out the schedule.
This bill ensures that green transmission projects are truly green by requiring transmission line siting to consider and use alternative routes where possible to avoid environmentally sensitive or culturally significant areas. In addition, this bill requires transmission projects that use federal siting authority to ensure that at least 75% of the capacity of transmission project is available to renewable generation, or the maximum possible amount of renewable generation that can be reliably interconnected. In addition, to ensure that renewable generation resources have access to transmission, transmission providers for green transmission projects that use federal siting must give priority to load-serving entities contracting with renewable generators, or to renewable generation developers, when offering firm transmission rights.
As a condition for federal siting, each transmission project developer must demonstrate that it has sufficient capacity to connect multiple renewable generation resources in the renewable energy zone(s) to which it connects, based on reliability criteria, land use limitations, economic considerations and the potential generation capacity of the renewable energy zones interconnected to the project. This will allow future renewable generators to connect to the transmission system without building multiple transmission lines through an area.
Large transmission lines may pass through states without providing any benefit to the state. This bill requires green transmission projects that use federal siting authority to provide transmission access to load or generation in each state they pass through. If a project cannot provide interconnection to a state, that state will be eligible for additional funds through DOE grants.
Sec. 405. Grants for green transmission grid project plans: This bill authorizes the DOE, in consultation with FERC, to make grants to states and planning entities to implement the planning and siting described in this bill, for transmission improvements including smart grid investments, for training for state public utility commission staff, for mitigation of landowner concerns, for habitat and wildlife conservation, for security upgrades to the transmission system, for energy storage, for reliability projects, transmission business development, and for distributed generation projects. These grants are funded through the American Recovery and Reinvestment Act of 2009, and in the future through sale of carbon allowances if a carbon allowance system is implemented.
These grants are available only to states that participate in green transmission grid planning and implement green transmission grid projects in a timely fashion.
Sec. 406. Cost Allocation: This bill encourages the States and participants in a green transmission plan to agree on and propose a cost allocation to FERC. If no cost allocation is filed, this bill allows FERC to determine a just and reasonable cost allocation that takes account of the widely distributed impacts of the transmission project. This bill allows FERC to allocate costs to all users, owners, and operators of the bulk power system in a region of an interconnection or throughout an interconnection.
This bill provides that costs of a green transmission project initially built with extra transmission capacity to multiple renewable generators can initially be allocated with the cost allocation. As new generation projects interconnect, they will pay their share of the transmission grid project, reducing the effect on rates of the transmission provider’s customers.
Sec. 407. Encouraging Clean Energy Development in Renewable Energy Zones: To ensure that transmission projects needed to integrate renewable energy resources get built in a timely manner, this bill allows federal transmitting utilities to construct projects if no privately-funded entity commits to financing them within 3 years. This bill extends bonding authority of federal transmitting utilities to finance construction of transmission.
Sec. 408. Federal power marketing agencies: This bill directs federal power marketing agencies to promote renewable energy and energy efficiency, by developing wind, solar and geothermal integration programs, and directs the federal transmitting utilities to undertake renewable electricity and energy security projects. It also directs WAPA to study reregulating hydroelectric dams and allows WAPA to fund a wind-hydro or solar-hydro integration demonstration project.
Sec. 409. Solar Energy Reserve Pilot Project: This bill establishes a pilot program on Federal land for commercial utility-scale solar electric energy systems on lands identified by the Secretary of Interior and the Secretary of Energy.
Sec. 410. Investment incentives: To encourage investment in green transmission projects, this bill extends infrastructure investment incentives from the Energy Policy Act of 2005 to include transmission projects that integrate renewable energy resources into the transmission system. The limit on third-party financing of transmission investments in the Western Area and Southwestern Area Power Administration territories is raised to $2.5 billion.
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