State Roles in Transmission Planning Projects
Addressing the various issues associated with the modern the electric grid requires the involvement of many government agencies across multiple jurisdictions and a variety of stakeholders. The process of transmission planning typically starts with state legislation that sets energy requirements, such as renewable portfolio standards, that require the development of new transmission infrastructure to accommodate new energy resources.
Most states have enacted legislation or regulations requiring utilities to file integrated resource plans (IRPs) or similar planning documents. IRPs require utilities to review their energy demand and supply to ensure that their customers’ long term energy needs will be met in a cost-effective manner. IRPs review a range of energy resource options including energy conservation, energy efficiency, generation and transmission lines. In addition to IRPs, RTOs use models to identify transmission needs to ensure reliable electricity supply.
Once transmission needs are identified through IRPs or RTO models, utilities may propose their desired transmission project, but they must receive a siting permit from various agencies before they can begin construction. Many state legislatures require their public utility commissions to review and approve the siting of proposed transmission projects within the state. Transmission projects must also receive land-use permits from local governments based on the zoning and planning ordinances of the local areas they occupy. Larger transmission projects may also require special federal permits, such as those addressing wildlife protection.
Additionally, the FERC regulates interstate transmission by issuing orders and establishing rules for transmission providers to follow. After siting is approved, certain proposed projects are reviewed by their RTO before they are permitted to connect to their regional transmission grid. Together these entities at the local, state, regional and federal level interact with utilities, contractors, manufacturers, retailers and other stakeholder groups to plan, site and build transmission projects.
States legislatures have significant influence over electricity transmission planning policy. Legislatures establish and fund energy regulatory entities, such as state public utility commissions (PUCs), that are responsible for overseeing and permitting transmission projects. Regulators implement policy based on statutory authority and guidance provided by legislatures. These entities vary across the country as states may designate regulatory authority over transmission projects to PUCs, siting boards, local entities or other state agencies. In addition to establishing these authorities, states may enact laws to support these agencies in achieving state energy goals, including goals related to the transmission grid.
For example, in 2021, Nevada enacted SB 448 requiring electric utilities to develop a plan to build transmission infrastructure to support the state’s transition to a clean energy economy. These plans must outline how utilities expect to develop high-voltage transmission lines to increase transmission capacity by at least 800 megawatts by the end of 2028. These infrastructure developments are meant to help increase the reliability and resilience of the state’s transmission grid while also expanding transmission access to renewable energy resources. Additionally, the bill requires every transmission provider in the state to join an RTO by 2030 to support the development of regional transmission connections.
State legislatures have also enacted laws specifying who is entitled to build transmission projects. Ten states have enacted right of first refusal (ROFR) laws for transmission development. ROFR offers incumbent utilities the initial opportunity to build transmission projects rather than putting the projects out for competitive solicitation bid among independent transmission developers. States typically implement ROFR laws to help speed up transmission development by avoiding the bidding process. However, ROFR laws are also criticized for limiting competition which may lead to increased costs and construction delays.
In addition to ROFR laws, states may attempt to expedite the siting and permitting processes by requiring by law that all state and local siting and permitting efforts be consolidated into a single process. State legislatures may establish state agencies dedicated to improving transmission access or deployment. Additionally, legislatures may encourage or require state agencies and officials to engage with multi-state, regional, or interregional transmission planning or cost-allocation efforts.
Most state legislatures designate at least one committee in each chamber to be responsible for oversight of state regulatory entities. For example, in Vermont the Energy and Technology Committee is primarily responsible for PUC oversight. These committees typically are the main form of communication between legislatures and regulators, either through committee hearings, reporting from the PUC, or official correspondence between the legislature and PUC. Committees may also have influence over PUCs through budget approvals, commission appointments or reporting requirements.
State Siting Authorities
State legislatures are responsible for designating an entity responsible for authorizing construction and issuing siting permits for transmission projects. In 32 states, PUCs are the entity responsible for approving the siting and construction of transmission facilities. PUCs are broadly responsible for overseeing electric utility service for investor-owned utilities. PUCs generally execute these responsibilities by regulating utility rates and of energy related infrastructure.
Prior to the construction of any transmission facilities, utilities in these 32 states must first apply for approval with the state’s PUC. The application includes the utility’s proposed route and projected costs for the project. The majority of transmission developments are large-scale projects that compete with other land uses, such as agriculture, forests, parks, historic sites, transportation and housing. PUCs consider these interests by soliciting input from affected parties, including local residents, during the review process. Based on their findings, PUCs may approve or deny a permit for a transmission project. The PUC may also conditionally approve a project requiring certain modifications, such as altering the proposed route.
Legislatures and PUCs are often collaborative in the formation of policies. Legislative committees may reach out to their commission to conduct research studies or help draft legislative language. Oregon O.R.S. § 756.037 specifies that the PUC must provide information, resources and advice when required by the Legislative Assembly. On the other hand, the PUCs may also request statutory changes. Some PUCs, like in Pennsylvania and Vermont, have legislative liaisons who monitor legislative activity relevant to the commission.
State legislatures can also enact laws authorizing the actions of PUCs. For example, North Carolina enacted HB 951 in 2021 authorizing the utilities commission to take all reasonable steps to reduce emissions in the state by 70% by 2030 and achieve carbon neutrality by 2050. The bill also requires the commission to develop a plan with generation, transmission, distribution, storage and efficiency measures necessary for achieving these goals.
Furthermore, legislatures can encourage commissions or other siting entities to act at an interstate level. Ohio R.C. § 4928.12 requires the commission to hold joint hearings and enter into agreements with agencies of other states to cooperate on regulatory efforts and the enforcement of state laws for transmission entities.
Outside of PUCs, states may incorporate other entities into the transmission planning process. Eight states have designated siting boards responsible for the both transmission lines and generating facilities. Siting boards concentrate the efforts of multiple agencies. While membership of siting boards varies by state, members mostly include directors of other state agencies relevant to the siting process, such as state departments of natural resources or energy. Siting boards may also include legislators or even members of the public. As with PUCs, the composition and actions of siting boards are largely dictated by state legislation. Washington enacted HB 1812 in 2021 to expand the powers of the Energy Facility Site Evaluation Council to facilitate the development of a clean energy system.
Montana, Nebraska, Oregon, Florida and Alaska all designate siting and permitting responsibilities to other state agencies. For example, in Florida the Department of Environmental Protection is primarily responsible for transmission planning and makes a recommendation to the governor, who is responsible for the final decision.
Finally, five states do not have a centralized authority responsible for approving transmission projects. For example, local governments in Colorado are responsible for approving or denying transmission projects within their jurisdiction.
State Designated Transmission Siting Authorities
Source: National Council on Electricity Policy
Transmission Infrastructure Authorities
As noted earlier, legislatures also can establish other types of state agencies with authority to advance transmission, such as dedicated transmission authorities. Seven state legislatures have established transmission infrastructure authorities to facilitate the development of new transmission systems. These authorities are not responsible for the siting process itself but may be authorized to support state economic, reliability and clean energy goals by establishing preferred siting corridors where transmission lines can be readily located. Examples of siting corridors may be near optimal renewable generation sites, in desired economic development zones, or in areas where transmission can easily connect to neighboring states.
Alternatively, such authorities can be authorized by the state legislature to engage in regional transmission planning processes, issue bonds or use grants and loans to finance transmission projects, enter into lease arrangements or sales contracts, or participate in state siting processes as a third party. Some infrastructure authorities are even authorized to own and operate lines when private investment is not available, and to set rates for the use of facilities.
In 2021, Colorado SB 72 created the Colorado Electric Transmission Authority (CETA). The CETA is responsible for identifying and establishing transmission corridors within the state, but the plans are still subject to siting and permit approval by local governments. The bill requires the public purpose of proposed transmission lines to be evaluated for the system as a whole, so the public use and benefits of the transmission line must be considered for both Colorado and any other states that will be affected by the line. To facilitate this consideration, the CETA is required to participate in regional transmission forums to negotiate and plan interstate transmission corridors with entities outside of the state. The legislation further leaned into the regional benefits of increased transmission capacity by requiring the state’s utilities to join an RTO by 2030.