Grid transmission changes could power better rates

Sara Freund
Alexandra Klass discusses policy needs to support regional transmission of renewable energy. The Searle Center Conference on energy regulation Thursday.  Photo by Sara Freund/MEDILL

By Sara Freund

A federal order that mandates inter-regional coordination on cost allocation for large-scale electricity transmission projects could mean better rates for consumers.

The order also requires all transmission providers to participate in the regional planning process. The contracts to build new facilities will be open to all companies, instead of project awards based on service territory of existing companies.

“Customers could see better rates, according to the D.C. circuit, but how Order 1000 will be implemented is a little suspect,” said Matt McGuire, an associate attorney focused on electric and gas regulatory issues at Jones Day law firm in Washington, D.C.

The Federal Energy Regulatory Commission passed Order No. 1000, which deals with some regulatory and legal issues of renewable energy.

Issues surrounding the Order No. 1000 anchored the first panel discussion at annual Searle Center Conference on Energy Regulation hosted by the Northwestern University School of Law. The conference, which met Thursday and Friday, debated other energy regulation issues such as modernization of the marketplace.

Climate change is a growing concern for the United States, which is why the Obama Administration has focused on initiatives that reduce greenhouse gas emissions through clean energy policies. One of the issues is how renewable energy will be transported to other regions in the United States.

Trucks and pipelines transport traditional energy, such as coal and gas, across the United States. Wind and solar energy cannot be moved like this, so new infrastructure and transmission lines must be built.

“Several of my proposals to change Order 1000 are things that Congress needs to do. And Congress is not doing much of anything. Making major changes that would diminish state authority and favor federal or regional authority is not something you see coming,” said Alexandra Klass, an attorney and professor of law at University of Minnesota.

“Federal authority is used when there is a national view that the state process is broken down and because we are not wholly dependent on renewables right now we don’t see that, we can still use our traditional energy resources. But for renewables to be a bigger component we are going to need a more extensive interstate power grid,” Klass said.

In theory, competition in the marketplace is good for the consumer, but it is too soon to tell whether the Order 1000 can be implemented successfully.

ComEd provides Chicago and the northeast area of Illinois with electricity. ComEd is part of a larger regional transmission company, PJM, which mainly covers Pennsylvania, Ohio, New Jersey, Maryland West Virginia, and Virginia. The rest of Illinois is covered by MISO, a different electricity provider that covers most of the Midwest.