States Walk the Lin e: Current State Action Towards More Efficient, Secure, and Cost Effective Electricity Transmission

July 2013
By Cassarah Brown

As U.S. electricity demand grows and renewable energy technologies mature, many parts of the electricity transmission system are proving to be outdated and inadequate. States’ energy infrastructure has not kept pace with new energy transmission technologies, creating major inefficiencies and large policy gaps. Power outages—particularly those caused by Superstorm Sandy, which cut power to an estimated 2.19 million households—have exposed major energy infrastructure vulnerabilities. Severe weather-related risks have brought transmission resiliency to the forefront of several federal and state initiatives.

The President’s National Science and Technology Council has reaffirmed a commitment to improving transmission infrastructure and developing smart grid technology. Upgrading the transmission system, however, can be a complicated, challenging and expensive task involving all layers of government. Siting new lines is a perpetual challenge, as landowners fear property devaluation and environmental risks. Further, emerging and less centralized transmission technologies may exacerbate cyber security risks and add to interstate transmission challenges.

State Action

States oversee the construction and siting of new electricity transmission lines and generally regulate both interstate and intrastate transmission, though the federal government can become involved in some instances. In most states, utilities must demonstrate need for new transmission lines, while states regulate how this need is defined. Currently, a number of states are leading action for energy infrastructure and transmission reform. The summaries below address current state legislative action to promote a more efficient, modern, cost-effective, and secure electricity transmission system.

Transmission Line Siting Requirements
Transmission line siting is often a slow and controversial process. Virginia recently enacted legislation (H.B. 587 and S.B. 418) to eliminate the requirement that 138-kilovolt transmission line siting obtain State Corporation Commission approval if findings demonstrate need for a new line and show that the line placement will minimize adverse effects on scenic assets, historic districts and the environment. At least five states—Georgia, Maine, New Jersey, New York, and New Hampshire—have legislation pending that would affect transmission line siting requirements.

Cost Recovery and the Amendments to the Authority of Facility Owners
In July 2011, the Federal Energy Regulatory Commission released Order 1000, affecting transmission line planning. Encouraging regional transmission planning, the order requires regional and local authorities to consider the public policy requirements set forth by state and federal regulations. The order also calls for new interregional transmission facilities to have a common interregional cost allocation, rather than only requiring those who directly benefit from the facility to help pay for it.

Some states have eased regulations by giving more authority to transmission owners with the aim of increasing completion or promoting transmission development. Indiana recently enacted Senate Bill 94 to allow new electric transmission owners to operate as public utilities. In Oklahoma, Senate Bill 1932 was passed to give electric transmission owners the authority to construct, own and maintain local electric transmission facilities approved for construction.

To help utilities secure funds for transmission line construction, New Mexico enacted House Bill 267 and Senate Bill 621 to provide cost recovery options for public utilities that undertake cost effective energy efficiency and load management programs.

Interstate Transmission Coordination
There has been some state action to facilitate interstate transmission line siting. New Mexico passed House Bill 46 to allow specific corporations in adjacent states to extend transmission lines into New Mexico to provide rural areas electricity.

The Energy Policy Act of 2005 enables states to create regional interstate compacts. The Council of State Governments facilitated the drafting of an Interstate Electric Transmission Line Siting Compact to spur multistate consensus on interstate transmission by enhancing the coordination among states for a more cohesive and efficient electricity transmission system. Two states, Kansas and Washington, have pending bills, H.B. 2010 and H.B. 1030, respectively, to join this compact to improve interstate electricity transmission coordination.

Enhancing Line Resiliency
In the aftermath of Superstorm Sandy, New York and New Jersey are trying to increase the resiliency of their electricity systems. New Jersey has three pending bills—S.B. 2358, A.B. 3488, and A.B. 3589—that would require underground transmission lines in severe weather prone areas. Also, to decrease system vulnerabilities, New Jersey has legislation pending to encourage offshore energy infrastructure development. New York has two pending bills—A.B. 6502 and S.B. 4502—aimed at reducing the frequency of power outages and disruptions. Both New Jersey and Washington have put forth legislation to study energy infrastructure resiliency improvements.

Exploring and Encouraging a More Efficient Electricity Grid
As states explore renewable energy possibilities and expand natural gas consumption, electric grid upgrades are increasingly important. At least four states—Massachusetts, North Carolina, New York, and Maine—have pending bills to establish task forces or commissions to identify energy infrastructure improvements to achieve more efficient and reliable electricity transmission. Montana adopted Senate Joint Resolution 6 to evaluate how the state’s renewable portfolio standard has affected its electricity transmission developments.

Massachusetts, aiming to reduce greenhouse gas emissions 100 percent by 2020, has several pending bills to assess and plan infrastructure upgrades and promote wind energy development. Pending House Bill 2935 would require the Department of Energy Resources to adopt a plan by 2020 that retires all coal-fired electric generating facilities and replaces them with clean energy alternatives. House Bill 2980, also pending, would establish an Energy Facilities Siting Board to review the cost, need, and environmental impacts of transmission lines, natural gas pipelines, and facilities for the manufacture and storage or gas and oil facilities. It provides wind energy with expedited permitting procedures. Maine and Minnesota also have pending legislation to create more energy efficient electric transmission and to encourage the development of networks that can better support renewable energy. In North Carolina, Senate Bill 652 (pending) aims to encourage modern grid technology research through tax credits.

New Hampshire has several pending bills to establish a moratorium on new electric transmission grid projects. House Bill 580 would establish the moratorium until the state issues a comprehensive energy plan.

Incentivizing Smart Grid Development
Smart grid technology takes advantage of digital utility-consumer communication to enable a more cost effective and efficient energy grid. Despite cyber-security related concerns, advocates hope the technology will reduce power outages and increase power restoration time. NSCL is currently developing an extensive legislative update on legislation related to smart grid technology. At least two states, Missouri and New York, have introduced smart grid legislation this session that may affect electric transmission or incentivize smart grid development.

Conclusion

In the face of a rapidly changing energy market, states are being challenged to make electric transmission reliable, efficient, modern, and secure. As smart grid, distributed generation, and renewable energy technologies expand, lawmakers are continuing their search for policies that will meet these goals.

A detailed summary of legislation discussed in this report may be found in Table 1.

Table 1: Enacted and Pending 2013 Transmission Legislation

State	Bill	Status	Description
Georgia	H.B. 76	Pending	Requires utilities, before exercising right of eminent domain for the construction or expansion of an electric transmission line, to look for a practical and feasible route. Utilities should first consider existing land uses in the geographic area where the line is to be located, existing corridors, and existing environmental conditions in the area before considering engineering practices related to the construction and operation of the line, and costs related to the construction, operation, and maintenance of the line.
Indiana	S.B. 94	Enacted	Allows the Utility Regulatory Commission to grant new electric transmission owners the authority to operate as a public utilities. Authorizes the Utility Regulatory Commission to resolve certain disputes between new and incumbent electric transmission owners.
Kansas	H.B. 2101	Pending	Signs onto the Interstate Transmission Line Siting Compact.
Massachusetts	H.B. 792	Pending	Assembles the RePower Massachusetts Emergency Task Force to make recommendations to the Secretary and the legislature for meeting the target of 100% emission reductions by January 1, 2020. The Task Force will evaluate issues including amendments to participation in the Regional Greenhouse Gas Initiative, amendments to the renewable energy portfolio standard, options for phasing out the use of alternative renewable energy sources that have positive net greenhouse gas emissions by January 1, 2022, amendments to reinstate authority to the executive that was removed during utility deregulation, wind-siting reform, creating a state or regional mechanism to price carbon, smart grid implementation, and deep energy efficiency investments.
	H.B. 2935	Pending	Requires the commissioner of the Department of Energy resources to adopt a plan to replace coal by 2020. This plan should include a plan for the orderly retirement of all baseload coal-fired electric generating facilities and replacement with clean energy alternatives such as electric transmission upgrades, energy efficiency, demand response, and renewable energy alternatives having low or no emissions of greenhouse gases and other regulated air pollutants.
	H.B. 2980	Pending	Establishes an energy facilities siting board to review the need for, cost of, and environmental impacts of transmission lines, natural gas pipelines, and facilities for the manufacture and storage of gas and oil facilities. Establishes an expedited permitting procedure for wind energy with a minimum 2MW capacity.
	S.B. 1607	Pending	Assembles the RePower Massachusetts Emergency Task Force to make recommendations to the Secretary and the legislature for meeting the target of 100% emission reductions by Jan. 1, 2020. The Task Force will evaluate issues including siting reform, the challenge of intermittency & smart grid, battery storage and other solutions, accurate carbon pricing, the needs of low income and minority communities, the health, job creation, and other benefits of eliminating carbon emissions from electricity generation, the opportunity to eliminate further emissions from the transportation sector through electric vehicles, and through electric heating.
Maine	H.B. 547	Pending	Establishes a stakeholder group to identify barriers to and incentives for the direct purchase of electricity by businesses adjacent to electricity-generating facilities, with the intent that the direct purchase of the electricity will decrease total electricity costs to the businesses.
	H.B. 753	Pending	Requires the Public Utilities Commission not issue a certificate of public convenience and necessity for the construction of a transmission line unless a description of the need for the proposed transmission line is provided. An analysis of non-transmission alternatives should be conducted by an independent 3rd party selected by the Public Utilities Commission. The projected cost of the proposed transmission line is compared to the projected cost of feasible non-transmission alternatives based on total projected costs. Regardless of who pays, preference is given to lower-cost alternatives, and cleaner alternatives are given preference over alternatives that rely on fossil fuels.
	H.B. 901	Pending	Establishes the Energy Cost Reduction Oversight Board and gives the director of the Governor's Energy Office the authority to submit energy cost-reduction contract proposals to procure natural gas pipeline capacity or to lease the use of state property, lands or waters for gas, water or electricity transmission corridors to the Energy Cost Reduction Oversight Board. It establishes the Energy Cost Reduction Trust Fund, to be administered by the Public Utilities Commission, to receive the revenue or profits generated from energy cost-reduction contracts and directs those funds towards initiatives to reduce energy costs for ratepayers.
	H.B. 1041	Pending	Requires that electric transmission and distribution utilities have neutral wires with the capacity to return 150% of excess power to the grid and that the wires return existing power at a rate that is greater than 95%. The Public Utilities Commission is required to certify that transmission and distribution utilities meet this standard for neutral wires. Directs the Public Utilities Commission to develop a set of recommendations, including tax and regulatory incentives, to encourage the development of decentralized microgrids or community-based or neighborhood-based clean energy generation facilities using solar, wind and geothermal energy as non-transmission alternatives.
	H.B. 106	Enacted	Directs the Public Utilities Commission to conduct an examination of the vulnerabilities of the state's transmission infrastructure to the potential negative impacts of a geomagnetic disturbance or electromagnetic pulse capable of disabling, disrupting or destroying a transmission and distribution system and to identify potential mitigation measures.
Minnesota	H.B. 439 S.B. 674	Pending	Allows people near but not in a transmission line route to qualify for property value loss compensation if property will lose 50 percent or more of its value.
	H.B. 729	Enacted	Orders all Minnesota electric utilities and all transmission companies to study and develop plans for the transmission network enhancements necessary to support increasing the renewable energy standard, while maintaining system reliability. Allows utility cost-recovery time for transmission lines. Requires certificate of need and evidence for the construction or expansion of a transmission line.
	H.B. 956	Pending-Carryover	Orders all Minnesota electric utilities and all transmission companies to study and develop plans for the transmission network enhancements necessary to support increasing the renewable energy standard, while maintaining system reliability. Allows utility cost-recovery time for transmission lines. Requires certificate of need and evidence for the construction or expansion of a transmission line.
Missouri	S.B. 6	Pending	To promote, encourage, and facilitate the deployment of electrical smart grid technologies, broadband communications, and other similar advanced technologies to benefit citizens in rural areas of the state of Missouri. Where a rural electric cooperative allows attachments on its distribution system poles, any telecommunications or broadband service provider shall have the right to attach, maintain, and operate its equipment on such poles in order to provide its services.
Montana	S.J.R. 6	Adopted	Requests interim committee to examine how the (RPS) standard has been used to leverage Montana's competitive advantages in developing new electric transmission.
North Carolina	S.B. 76	Pending	Creates Energy Jobs Council to develop and recommend to the governor and the General Assembly a comprehensive long-range state energy policy that addresses requirements in the short term (10 years), in the midterm (25 years), and in the long term (50 years) to achieve maximum effective management and use of present and future sources of energy. Such policy should include, but not be limited to, energy efficiency, renewable and alternative sources of energy, research and development into alternative energy technologies, and improvements to the State's energy infrastructure and energy economy, including smart grid and domestic energy resources that shall include at least natural gas, coal, hydroelectric power, solar, wind, nuclear energy and biomass.
	S.B. 652	Pending	Provides a tax credit for research regarding modern electric grid technologies.
New Hampshire	H.B. 166	Pending	Requires the public utilities commission to make specific findings as to the public need for proposed electric transmission lines, and requires transmission lines that are not for the public good to be placed underground.
	H.B. 580	Pending	Establishes moratoria on the construction of wind turbine plants and electric transmission line projects until the state issues a comprehensive energy plan.
	H.B. 586	Pending	Establishes a one-year moratorium on new and pending applications for certificates for electric transmission facilities.
New Mexico	H.B. 46	Enacted	Allows nonprofit or cooperative corporations located in adjacent states to extend transmission lines into the state to supply electric energy in rural areas.
	H.B. 267 S.B. 621	Enacted	Provides public utilities that undertake cost-effective energy efficiency and load management programs the option of recovering its prudent and reasonable costs along with commission-approved incentives for demand-side resources and load management programs implemented. Program costs and incentives may be deferred for future recovery through the creation of a regulatory asset.
New Jersey	A.B. 3535 S.B. 2625	Pending	Establishes “Energy Infrastructure Study Commission” to study methods for the prevention of electric transmission and distribution line damage caused by fallen trees and excessive winds, feasibility concerning the implementation of new technologies to improve electric utility service reliability and alternative methods for the transmission and distribution of electricity, and recommendations for legislation to facilitate improvements to electric utility transmission and distribution reliability, including recommendations for legislation concerning the installation of underground electric distribution lines and the utilization of new technologies to improve reliability.
	A.B. 3488 A.B. 3589	Pending	Requires electric distribution lines to be located underground in areas affected by severe weather or natural disasters.
	A.B. 3654	Pending	Creates the Vegetation Management Response Act. Authorizes electric public utilities to utilize all available methods to remove, replace, or maintain dangerous vegetation to ensure continued reliable supply of electricity in the state. Provides for the authority of shade tree commissions and the authority of certain other utilities and cable television companies.
	A.B. 3985 S.B. 2611	Pending	Establishes New Jersey Transmission Infrastructure, Development of Employment, and Electric Security Act. Develops offshore transmission infrastructure to address New Jersey's reliability and market efficiency transmission needs and to facilitate New Jersey's planned offshore wind energy developments. Directs Board of Public Utilities to coordinate with PJM Interconnection L.L.C. concerning development of offshore transmission infrastructure.
	A.B. 4096	Pending	Establishes "New Jersey Electromagnetic Infrastructure Advisory Commission" to advise the governor and the Legislature on potential measures to protect the State's infrastructure from an EMP attack.
	S.B. 2358	Pending	Requires electric distribution lines to be located underground in areas affected by severe weather or natural disasters.
New York	A.B. 126	Pending	Includes smarts grid among considerations for any transportation infrastructure project.
	A.B. 1038 S.B. 1645	Pending	Mandates a study of energy-efficient and sustainable forms of power to replace power generated by Indian Point units 2 and 3. In addition, requires the board to undertake a separate study to evaluate the potential impact of the closure and discontinuation of operations by IPEC 2 and IPEC 3. Study shall include, at a minimum, an assessment of each of the following: an examination of strategies to replace energy otherwise produced by Indian Point Energy Center; additional installed electric generating capacity; distributed electric generation, especially generation using renewable or innovative energy resources; intrastate electric transmission system upgrades; demand response, energy conservation and efficiency; and energy storage technologies energy efficiency measures.
	A.B. 1932	Pending	Enacts the "New York Grid Modernization Act" to address the aging infrastructure. Establishes the grid modernization program, and creates the smart grid advisory council.
	A.B. 2521 S.B. 5417	Pending	Amends the Public Service Law and incorporates environmental justice considerations into major utility transmission facility siting.
	A.B. 6502 S.B. 4502	Pending	Enacts the utility preparedness act of 2013 and requires the commission to issue an order establishing and requiring compliance with power restoration performance standards for certain electric companies to reduce the duration of outages and disruptions and to facilitate restoration of power after outages and disruptions.
	A.B. 6508	Pending	Establishes a smart grid system.
	S.B. 3206	Pending	Amends the public authorities law, in relation to emerging technology industrial classifications for clean environment and energy technologies, including smart grid technologies
	A.B. 3477	Pending	Establishes the NYS Electromagnetic Critical Infrastructure Protection Commission to study and investigate EMP threats to NYS infrastructures, gather information, make recommendations and inform local governments and agencies about the hazards of natural and man-made EMP events.
Oklahoma	H.B. 1932	Enacted	Gives an incumbent electric transmission owner the right to construct, own and maintain a local electric transmission facility that has been approved for construction in a Southwest Power Pool transmission plan and will interconnect to facilities owned by that incumbent electric transmission owner.
Virginia	H.B. 587 S.B. 418	Enacted	Eliminates the requirement that an electric transmission line of 138 kilovolts obtain State Corporation Commission approval, based on findings that the line is needed and that its corridor or route will reasonably minimize adverse impact on the scenic assets, historic districts, and environment of the area concerned, if a certificate of public convenience and necessity for the line is not required.
Washington	H.B. 1030	Pending	Adopts the Electric Transmission Line Siting Compact.
	H.B. 1374	Pending-Carryover	Establishes an energy facility site evaluation council to ensure the safe and reliable operations of electrical generation and energy transmission systems in the state and the region.

States Walk the Lin e: Current State Action Towards More Efficient, Secure, and Cost Effective Electricity Transmission

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Conclusion

Table 1: Enacted and Pending 2013 Transmission Legislation