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    Infrastructure Investment And Jobs Act Part 2: Investing In Transmission


    November 18, 2021 - By Mr Aaron Lang

     

      This is the second post in our series on the recently enacted Infrastructure Investment and Jobs Act, covering how the Act invests in strengthening our electric grid, which could better prepare us for the shift from fossil fuel generated electricity to renewable power.

      To decarbonize our energy system, electrify transportation and buildings, and drastically reduce our contribution to climate change, we'll need to develop and deploy significant wind, solar, and other renewable energy generating facilities as quickly as possible. Yet many hurdles stand between us and deploying more renewable energy. One in particular is the state of our electric grid.

      The grid (technically, the various regional grids) generally was not designed for renewable energy facilities that often must be sited in remote areas where the wind blows strongest or the sun shines brightest. Those areas aren't usually reached by the web of existing transmission lines and substations that bring power over long distances to our homes and businesses.

      The Infrastructure Investment and Jobs Act includes several investment programs to begin to address these issues with our power grid:

      • Program Upgrading our Electric Grid and Ensuring Reliability and Resiliency. This flagship program authorizes $5 billion in grant funding for states, tribes, municipal and local governments, and public utility commissions to work with electric sector owners and operators in developing transmission, storage, and distribution projects. The program authorizes another $1 billion in funds geared specifically to projects in rural and remote areas. The Act also directs the Secretary of Energy to work with the Secretary of Homeland Security, FERC and NERC to develop a common set of tools to assess grid resilience and reliability, with an eye toward securing our existing and future energy infrastructure.
      • Transmission Facilitation Program. The Act establishes this $2.5 billion federal loan program for constructing or replacing certain transmission lines and increasing capacity of existing lines. It directs the Secretary to prioritize projects that, among other things, "contribute to national or subnational goals to lower electricity sector greenhouse gas emissions" and empowers the Department of Energy to enter into capacity contracts with project developers for up to 50 percent of projects' total proposed capacity, which the Department will then sell once it determines that enough capacity has been secured by other entities to "ensure the [project's] long-term financial viability."
      • Smart Grid Investment Matching Grant Program. The Act prioritizes deploying "technologies to enhance grid flexibility" by appropriating $3 billion to a grant program for smart grid technology development, including for things such as dynamic line rating, flow control devices, advanced conductors, and network topology optimization.
      • State Energy Program. The Act appropriates $500 million for this program geared toward state-level planning for transmission and distribution infrastructure. The Act also requires states to develop Energy Conservation Plans that may include programs to help reduce carbon emissions in the transportation sector by promoting the use of alternative fuels and electrifying state government vehicle fleets, public transit, and ridesharing and other passenger vehicles.
      • Siting Interstate Electric Transmission Facilities. The Act amends an existing grant of authority to the Department of Energy to designate "National Interest Electric Transmission Corridors"-certain areas lacking in transmission capacity-for more rapid development and deployment of new transmission resources. The Act directs the Secretary to consider capacity and congestion, among other things, when developing and designating these national interest corridors.

      These programs are a good start, but sooner or later, we'll likely need to invest even more in enhancing our electric grid. Those of us who regularly represent clients in transmission-related proceedings before state public utility commissions also know that federal funding is only part of the larger picture. The complex siting rules and regulations in many states and lengthy permitting proceedings for transmission projects could mean that developing these new facilities, regardless of federal backing, could take significant time.

      Expanding electric transmission and distribution systems is not only an important step in decarbonizing the electric generation sector, but will also be important in expanding electrification of transportation and buildings. The above provisions and others in the Act begin to address these other sources. The Infrastructure Investment and Jobs Act is a good beginning to efforts to reform the way we build and maintain this country's energy infrastructure and to press for broader changes to electrify other sectors that generate emissions.

      To view Foley Hoag's Energy & Cleantech Counsel blog please click here

      The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

      Mr Aaron Lang

      Foley Hoag LLP

      Seaport West

      155 Seaport Boulevard

      Boston

      MA US 02210-2600

      UNITED STATES

      Tel: 6178321000

      Fax: 617 8327000

      E-mail: ACallanan@foleyhoag.com

      URL: www.foleyhoag.com

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