And while clean energy industry groups support the bill wholeheartedly, they overlap with the critical environmentalists in their enthusiasm for transmission.
“The transmission provisions in BAAJA are essential to deploying more clean energy, putting more electrons on the grid to lower overall system costs,” a coalition of five clean energy trade groups said in a letter to congressional leaders. Climate philanthropist and investor Tom Steyer wrote that the bill’s expanded transmission siting authority “means more power lines carrying more affordable energy to more people across America … which means lower bills for all of us.”
When New Mexico Senator Martin Heinrich, one of the two Democratic co-authors of the bill, first presented it to the public about a month ago, he opened with a discussion of the SunZia transmission project, a 550-mile transmission line designed to bring a staggering amount of wind power — 3.6 gigawatts, more electricity than the Hoover Dam generates and the largest renewable project in the country — from New Mexico to Arizona and California. “That transmission line,” Heinrich said, “took 17 years to permit and build. That’s why I’m here today, because I was part of that process, which should have taken probably five years … . We need to be able to build big things in this country again.”
“Right now, clean, affordable energy is stuck waiting for transmission lines that take a decade or more to build, leaving Americans to pay sky-high utility bills,” Heinrich added in an emailed statement. “The Bipartisan American Affordability and Jobs Act fixes that by speeding up grid upgrades, strengthening siting for interstate lines, and making sure costs are allocated to only those who benefit.”
For years, climate and energy experts have pointed to transmission as the sine qua non of a renewable buildout, because clean energy generation is sited where the rocks are hot (like Utah), or the sun shines (like Nevada), or the wind blows (like New Mexico), and that’s not necessarily where the people consuming the electricity are (California).
“There’s effectively no way to have a high penetration renewable grid without a lot more regional and interregional transmission,” David Pomerantz, executive director of the Energy and Policy Institute, told me. (He also spoke at length to my colleague Robinson Meyer about the transmission section of the bill on this week’s episode of Shift Key.)
And beyond the specifics of the bill, a bipartisan Congressional vote and presidential signature “would be an expression of the national sentiment that, for a whole variety of reasons, we need a better grid in the U.S.,” Michael Skelly, the co-founder and chief executive of the transmission developer Grid United, told me.
For wind energy especially, which is quite sensitive to siting, transmission investments allow it to be “more competitive compared to some of the other technologies,” said Aaron Bergman of the energy research group RFF, which released modeling showing BAAJA reducing emissions compared to the status quo through 2041. “I confess before we did this, I actually did not expect to see the effect we saw,” Bergman said, referring to the emissions reductions.
That modeling also found overall transmission capacity in the U.S. growing by over 30% by 2041 and that “interregional capacity specifically is projected to grow by 10 to15 gigawatts per year between 2032 and 2041, leading to a rough doubling of capacity over the period modeled.”
But actually building that transmission requires the type of overhaul of transmission planning that’s been attempted for over 25 years with little success.
So what does BAAJA actually do?
First of all, it codifies — and therefore protects from legal challenge — existing orders by the Federal Energy Regulatory Commission around transmission planning and requires regular transmission planning within and among regions.
“If you want a better grid in America, this is a hell of a bill to make that happen because it requires interregional planning,” Skelly said. “Those provisions are very, very helpful, and I think they’ll encourage a lot of activity in the transmission sector,” he added, referring to how the bill puts in place mechanisms for regions to coordinate development of power lines and come up with a consistent way to allocate their costs.
It also gives more power to transmission developers to drive the process for siting and approving lines. FERC would be required to issue permits to interstate high-voltage lines (or lines using advanced conductoring) that meet certain public interest criteria after states get a year to act on a permit application. If BAAJA passed, FERC would also have to issue permits to lines that meet a national interest, reliability, and voltage criteria. For even higher voltage lines, transmission developers can apply for federal permits in parallel with the state permit, shortening the permitting timeline.
The law also puts some muscle behind the perennial critique that utilities are overinvesting in transmission that’s less useful to the whole system. BAAJA would allow states to refer utilities to FERC to be investigated for not picking cost-effective projects.
If FERC determines that a utility’s planning is making it harder for regional transmission to get built, FERC could subsequently dock a utility’s return on equity and remove discretion from the utility for planning or even issue fines.
FERC had tried to coax utilities into building more transmission back in 2011. But when it issued an order to begin a competitive process for building new lines, it added exceptions for immediate reliability needs or building lines in your local territory. This loophole “resulted in what was just mass gaming to the point where around 90% of the transmission built by utilities in the country over the last decade plus has fallen into those two categories,” Daniel Palken, director of infrastructure at Arnold Ventures, told me. “So you’ve avoided building large-scale, efficient, economically driven transmission, and you’ve instead built incremental band-aids.”
The bill both writes down these planning provisions into statute and provides real backstops for FERC to approve lines and exercise oversight over utilities.
“You’re talking about lines that can stretch across electricity markets, across utility jurisdictions. The sense among pretty much all electric system advocates is our current legal structure, for one reason or another, is totally insufficient to the task,” Chirag Lala, vice president of research and chief economist at the Center for Public Enterprise, told me.
There is also the actual permitting reform part of the permitting reform bill, which may have some of the most outsize effects on transmission lines, which are notoriously hard to permit due to the number of territories they run through. In the West, where transmission is often the most needed to connect far-flung resources like wind, solar, and geothermal to large urban areas, transmission lines almost inevitably trip up the National Environmental Policy Act and the National Historic Preservation Act as they traverse public lands.
Transmission projects would see the largest time savings from the bill, according to an analysis by Jack Andreasen Cavanaugh for Columbia University’s Center on Global Energy Policy. Some of the biggest time savers come from FERC’s expanded ability to approve lines and in running National Historic Preservation Act reviews concurrently with the Environmental Impact Statement required by the National Environmental Policy Act.
SunZia especially had an extremely drawn-out NHPA process that continued past the completion of construction of the line.
So where would these highly planned and permitted lines actually go?
“Interregional planning has worked nowhere in the country in the last 15 years,” said Palken, and while there has been some regional planning, the Intermountain West could be a prime candidate going forward.
Two of the bill’s authors, Republican Senator Mike Lee and Democratic Senator Martin Heinrich, represent the energy-rich adjacent states of Utah and New Mexico, respectively. The governors of Nevada and Utah, both Republicans, have endorsed the bill, while the governor of New Mexico, a Democrat, has not.
“The Intermountain West is both a growth region and a growth region that has seen virtually no transmission come out of FERC's existing processes,” Palken said.
One potential beneficiary of transmission investments in the West would be geothermal developers like Fervo. A recent short seller report identified transmission access as one of the reasons to doubt the company’s prospects, as it will require it to connect to customers in California. Jefferies analysts described transmission as an “execution item” for the company and noted that Fervo is “still working to secure roughly 100 MW” to serve Google as part of an offtake deal.
More generally, for there to be any hope that new load (i.e. data centers) could be served by a clean grid, more transmission investment will be needed. “A lot of what we’re building now is wind and solar and, inherently, whatever you’re building more of needs the new transmission,” Pomerantz said.
While experts have been criticizing the existing transmission planning system for as long as it’s been cobbled together, it took increased demand on the entire grid to spur at least the potential of bipartisan agreement on transmission planning reform.
Transmission has long been tagged in energy policy circles as a Democratic priority because more long-range transmission could threaten utilities’ existing business models (and utilities were seen as quite influential among Republicans) and because transmission investments are needed to fully unlock wind and solar potential across the country, which Democrats tend to want to favor (and subsidize).
Two things changed: load growth and rising electricity rates. “People are growing frustrated with utilities,” Travis Fisher, director of energy and environmental policy studies at the libertarian Cato Institute, citing both rising costs and data-center-related investments leaking onto residential ratepayers’ bills.
“There’s a lot of scrutiny on returns on investment. There’s this local transmission issue where there has really been a bipartisan sense among state and federal regulators that utilities have maybe gotten away with a lot of spending with almost no oversight from the state or federal government, and that, at a minimum, deserves looking into,” Palken said.
And with higher electricity demand, new transmission isn’t just about reallocating demand towards new resources, but letting everyone connect to the grid. “It’s very clear that load growth is here to stay. So there’s a pro-industry argument for expanded transmission now that we didn’t necessarily have before,” Fisher told me.
Fisher also cited the sunsetting of Inflation Reduction Act subsidies for wind and solar as another reason why Republicans could sign on to the transmission title — there was less fear that the new transmission projects would supercharge the IRA’s subsidies.
“If you make it significantly easier to build long-range, high-voltage transmission lines, that is going to make it easier to put renewables on the grid,” Fisher told me. “I don't think that's inherently bad, and you shouldn't oppose that if you’re a technology-neutral advocate like I am. But it does change the calculus when there’s significant subsidies on the table.”
And even if, say, wind power isn’t getting subsidies, new transmission investments could make them more economically viable.
“Even absent further policies, transmission is very valuable for wind and it could lead to greater deployment and reductions in emissions,” Bergman said.
A lot of Chinese solar panels.CN-STR / AFP via Getty Images
Former Secretary of the Interior Deb Haaland. Justin Sullivan/Getty Images