Bar News - October 21, 2015
Building a 21st Century Power Grid: The Case for Burying High-Voltage Transmission Lines
By: Maureen D. Smith
Recent debate over siting high-voltage transmission lines in New Hampshire highlights the clash that often occurs between energy and environmental interests, especially when burying the lines can substitute for above-ground transmission towers.
Arguments in support of burial, such as environmental protection, property rights and aesthetic concerns, are countered by those favoring traditional methods of installing transmission to meet the wider, regional need for reliable power at lower cost.
The two sides may well be aligned, however, on the issue of modernizing our energy transmission system over the long term as one strategy in adapting to climate change. Aside from siting concerns about overhead transmission lines, developers, policymakers and ratepayers will need to confront shared challenges in finding long-term solutions to the problems of an aging power system infrastructure and the potentially large-scale power outages associated with increasingly severe and frequent weather events.
A Storm to Remember
A critique of existing transmission infrastructure resiliency in the Northeast after the infamous October 2011 winter storm that crippled the region sheds some light on the issue. A report prepared by the Federal Energy Regulatory Commission (FERC) and North American Electric Reliability Corporation noted that more than 3.2 million homes and businesses were without power near the end of the storm, resulting in estimated storm costs of between $1 billion and $3 billion.
Although most customer outages were caused by damage to electric distribution lines (i.e., the state-regulated, lower-voltage wires that carry power from the interstate transmission system to retail customers), there was also significant damage to Bulk Power System (BPS) elements necessary for operating an interconnected electric energy transmission network. Outages occurred in 74 high-voltage transmission lines and 44 substations, resulting in a “significant transmission event” that affected 130,000 businesses and residences.
Although the outages did not impair the stability of the BPS and New England’s transmission systems operated by ISO-New England (ISO-NE), the entity responsible for keeping electricity flowing across the six-state region, FERC noted that this was largely due to the dramatic drop in power usage from simultaneous damage to the distribution system.
According to FERC, future storms could cause even greater harm to the BPS. This is because protecting distribution lines to allow for normal demand or “load” conditions during transmission-related outages can actually result in cascading, widespread outages like those experienced during the 2003 “blackout,” requiring emergency action by system operators.
The need to modernize and to increase the resiliency of aging energy infrastructure has been emphasized in the first installment of the US Department of Energy’s (DOE’s) Quadrennial Energy Review released in April 2015. According to DOE, the trend towards more frequent and extreme weather events due to climate change will continue, putting aging transmission infrastructure at risk.
New Hampshire’s State Energy Strategy, released in September 2014, echoes this observation, acknowledging that much of the New England region’s grid is at or near the end of its useful life and that it is essential to build a modern and resilient grid. Because DOE believes that even high deployment of very low-cost distributed energy resources will not eliminate the need for additional transmission capacity, its recommendations for increasing resiliency while addressing transmission siting issues include application of new, long-distance transmission options like high-voltage underground lines and superconducting, underground cables.
The Cost of Undergrounding
Despite the availability of undergrounding technology, the generally higher cost of construction has deterred policymakers and regulators from moving quickly to require its application to either transmission or distribution systems, relying instead on the traditional notion of tree removal/trimming to avoid outages. According to the US Energy Information Administration, cost ranges for undergrounding vary widely because the location and geological condition of each construction project is unique and, depending on the circumstances, increased costs may or may not flow directly to consumers.
In New England, merchant developers’ proposals to increase transmission of hydroelectric power into the region vary widely when it comes to burial. For example, the Northern Pass proposal for a high-voltage electric transmission line from Canada through New Hampshire would construct overhead towers for all but 60 miles of the 192-mile power line, while TDI New England proposes a different, underground route for a similar transmission project called the New England Clean Power Link.
For transmission projects that ISO-NE has found are necessary to address regional reliability needs, like the upcoming transmission upgrade for Boston and southern New Hampshire, ISO-NE has generally favored as more cost-effective the less capital-intensive above-ground transmission upgrades over competing, underground options. Because the costs of transmission projects required to satisfy a reliability need are shared by consumers across New England, ISO-NE typically leaves to state or local ratepayers the incremental costs of undergrounding, if needed to satisfy local siting concerns.
For the Boston reliability project, ISO-NE chose a primarily overhead transmission option as being more cost-effective than a competing proposal that would have been almost entirely buried under land and along the ocean floor. Evidence of higher net costs for overhead lines, when taking into account storm and outage-related damages, is apparently not a persuasive factor in assessing reliability upgrades.
How to account for the resiliency factor and related evidence of higher net-cost impacts from storm-related damages can present a unique challenge to developers who are interested in demonstrating the merits of underground transmission projects, as well as to regulators charged with assessing project costs and benefits. For example, federal regulators conducting a National Environmental Policy Act review to assess the environmental impacts of the Northern Pass proposal have drafted an Environmental Impact Statement (EIS) that accounts for the increased costs of burial, based on estimated construction costs. At the same time, the July 2015 draft EIS offers little quantitative assessment of avoided costs and potential savings from “the decreased risk for operational hazards such as damage from extreme weather or intentional destructive acts” related to burial.
In response to the notion that vegetative controls, such as additional tree removal, could improve the resiliency of new, overhead transmission, FERC’s 2011 report raises some doubt in that “the reliability benefits of removing all danger trees from outside utilities’ rights of way often would not outweigh the costs of doing so” in heavily forested areas like New England.
Reverting to Local Review
To the extent that long-term resiliency is merely a general policy consideration in federal and regional planning contexts, rather than part of the balance sheet, with quantitative assessment for each transmission project proposal, there is little clarity on regulatory mechanisms and signals to developers regarding the need to significantly improve grid resiliency in light of federal warnings of “increasingly powerful storms from global climate change.” In the absence of federal and regional technology-related decision-making, the issue may necessarily revert to state and local review of specific projects.
For example, the New Hampshire Site Evaluation Committee established under RSA 162-H may be asked to consider the potential impacts of jurisdictional projects on grid resiliency, among other things, as well as the potential short- and long-term costs associated with various construction options that could either avoid or result in severe economic damage. By statute, the committee is required to assess proposed projects under the still-new and untested RSA 162-H:16 “public interest” standard before a “certificate of site and facility” is issued, arguably providing the committee with discretion to apply a broad evaluation of costs and benefits.
The site evaluation committee could also be asked to consider whether burying transmission lines would better serve the purposes of the siting law after “due consideration of all relevant information regarding the potential siting or routes” and to impose conditions consistent with its authority to “regulate any aspect of the construction or operation of the proposed facility.” RSA 162-H:16, I.
In the absence of clear policy direction, New Hampshire’s siting authorities may provide an opportunity for the state to ensure construction of robust and resilient transmission infrastructure for the 21st century.
|Maureen D. Smith
Maureen D. Smith is shareholder and member of Orr & Reno’s Energy & Environmental Practice Group. She represents business clients in environmental, energy and public utilities matters and can be reached by email.