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The country’s chief energy regulator issued major updates to the transmission planning process.
On the two ends of the energy transition, public policy is working to encourage more non-carbon-emitting electricity generation (think wind, solar, and batteries) and convert what was once powered by combustion in electric power (think electric cars and heat pumps). But then that leaves the middle.
The solar arrays and wind farms that the federal tax code and many state policies promote and subsidize can’t serve all that new electric demand from cars and heat pumps (not to mention existing demand for electricity) if they can’t connect to the grid. That’s where the Federal Energy Regulatory Commission steps in — not by funding or mandating the construction of new energy transmission infrastructure, but by laying out the rules for planning it.
On Monday, FERC unveiled and approved a rule overhauling regional transmission planning to take into account the ongoing and planned transformation of the electric grid. Since 2010 at least, energy planning and construction has been motivated almost solely by incremental need, i.e. the only things that got built were those deemed necessary to keep the literal lights on. A Department of Energy report released last year showed that overall transmission investment and construction has slowed down since the second half of the 2010s. That’s led to a “queue” of projects waiting to connect that’s around 90% renewables.
All of this is especially distressing as the energy transition will require a vast expansion of our transmission capacity. Increased demand from electrification, new manufacturing, data centers, state policies that mandate the use of renewable energy, federal policies like the Inflation Reduction Act, and corporate policies that mandate the procurement of non-carbon-emitting power is transforming the grid.
While the 1,300-page rule has not yet been released, FERC commissioners and staff described new requirements that regional transmission organizations adopt the long view, extending their planning horizon over a 20-year period and calling for updates every five years. This means grid planners will have to take into account factors making the grid cleaner, including corporate commitments to purchase clean energy, public policy pushing renewables, the retirement of fossil fuel plants, and utilities’ own designs for the future.
But that’s just the planning process. When it comes to actually building — and paying for — new transmission, FERC is requiring regional transmission planners to consult a specific set of economic and reliability benefits like reducing congestion on the grid and resilience against extreme weather and lower costs when selecting projects.
Many would-be transmission projects founder on how to split up costs between the various regions and utilities any new infrastructure will serve. Transmission planners, therefore, often prefer local projects that serve the existing grid and can thus avoid the tricky business of how to split the bill. Within the PJM Interconnection, the country’s largest regional transmission organization, about six times as much local transmission was approved from 2014 to 2022 compared to regional transmission, according to research by Massachusetts Institute of Technology economists.
It’s easy to see why the regional planning process can be contentious and complex. There’s no one set way to do it because there’s not always agreement on who benefits and to what extent from any given project. This has only gotten more true as some states have passed decarbonization or renewable energy mandates as others have resolutely not. Under the new rule, transmission planners will have to come up with a default method for allocating costs associated with new projects as a fallback in cases of disagreement.
Senate Majority Leader Chuck Schumer, who has pushed FERC to make transmission planning easier, claimed victory in a press conference following the announcement. He described the new rule as a “missing piece to the puzzle” of the IRA that could help jumpstart a transmission buildout. That will be especially key in the absence of Congressional action. Though hopes were once at least moderately elevated that Congress would take steps to accelerate the complex permitting process for large-scale energy projects this session, any sense of possibility seems to have disappeared.
“I’ve told Joe Manchin, it's going to be virtually impossible to get something done,” Schumer told reporters, referring to the barnstorming West Virginia senator and chair of the Senate Committee on Energy and Natural Resources, who’ll be retiring in January, when his current term expires.
While FERC cannot wave a magic wand and fund transmission projects or get agencies to speed up environmental reviews, it can focus and direct transmission planners to figure out what kinds of transmission needs to be built and how it will be paid for. In another corner of the executive branch, the DOE recently designated 10 “corridors” where the need for new transmission is particularly acute. Projects in these areas could be eligible for additional financing and bypass certain permitting hurdles.
Environmental groups like the Sierra Club, the Natural Resources Defense Council, and the Environmental Defense Fund, as well as Senate Democrats almost immediately hailed the FERC decision. Ray Long, president of the trade organization the American Council on Renewable Energy, said in a statement that the rule will “enable the delivery of power from cleaner and more affordable electricity generation that will benefit consumers all across America.”
The Commission’s sole Republican member, former Virginia regulator Mark Christie, was not so effusive. He issued a harsh dissent to his colleagues’ decision, likely previewing a judicial challenge from Republican-governed states. While the Commission’s chair, former District of Columbia public service commissioner Willie Phillips, and its other member, NRDC alum Allison Clements, both Democrats, largely spoke about the rule in terms of reliability and reforming the planning process, Christie made it seem like a climate change policy in disguise that would function as a “transfer of wealth” to wind, solar, and transmission developers.
“This is not about reasonable improvements to regional planning,” Christie said. “This rule is a shell game designed to disguise its true agenda that is about the money. It’s a 1,300-page vehicle to socialize the cost of the rule’s sweeping policy agenda.”
Christie also raised the prospect that consumers in states that have not adopted mandates for renewable energy could end up being forced to pay for transmission projects necessary to connect renewables to the grid, turning consumers into “involuntary beneficiaries.” While this may not sound so bad, a key principle of allocating costs for transmission is that whomever benefits — no matter how those benefits are calculated — should pay. If, as Christie argues, there’s disagreement over what counts as a benefit, being an involuntary beneficiary is no good.
While the details of the rule remain to be seen, it did not list any environmental benefit to new transmission as the type of benefit that transmission needed to tally up when considering a project; instead, it said that transmission planners should consider how public and corporate policies are affecting the mix of generation when making their long-term transmission plans.
Commissioner Clements argued in her remarks that this was a narrow perspective on transmission planning, and that “it is not the Commission’s job to try and force the genie that is the energy transition back into the bottle.” States should avoid the temptation to “get drawn into a lose-lose debate over who, precisely, caused the need for each specific system upgrade as the grid’s inadequacy festers,” she added.
Rob Gramlich, the president of Grid Strategies LLC and a leading transmission advocate, added his voice to Clements’, tweeting that the notion that “beneficiaries should get to opt out of paying for infrastructure … is counter to every lesson about how every type of infrastructure has ever been funded.”
While those celebrating no doubt disagree with Christie’s claim about cost, they agreed that the rule would spur the transition to non-carbon-emitting sources of power. Just to meet the likely increase in energy usage from existing policies like the IRA and the Bipartisan Infrastructure Law, the DOE estimates there would need to be at least 64% increase in transmission within regions — precisely the type of planning today’s FERC decision affects.
Since the beginning of the Biden administration, FERC has been a key battleground for the future of energy policy. In 2022, Manchin blocked the reappointment of Richard Glick to the Commission, even though he had been serving as its chair; another commissioner left at the end of his term last year, and their replacements have not yet been confirmed. The Commission’s number will dwindle yet again when Clements’ term expires in June, assuming the Senate hasn’t acted by the end of its current session, which would leave FERC without a quorum.
The three-member commission is therefore trying to act as quickly as it can. “This rule can not come fast enough,” Phillips said.
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Congressional Democrats will have to trust the administration to allow renewables projects through. That may be too big an ask.
How do you do a bipartisan permitting deal if the Republicans running the government don’t want to permit anything Democrats like?
The typical model for a run at permitting reform is that a handful of Republicans and Democrats come together and draw up a plan that would benefit renewable developers, transmission developers, and the fossil fuel industry by placing some kind of limit on the scope and extent of federally-mandated environmental reviews. Last year’s Energy Permitting Reform Act, for instance, co-sponsored by Republican John Barrasso and Independent Joe Manchin, included time limits on environmental reviews, mandatory oil and gas lease sales, siting authority for interstate transmission, and legal clarity for mining projects. That passed through the Senate Energy and Natural Resources Committee but got no further.
During a House hearing in July, California Representative Scott Peters, a Democrat, bragged that a bill he’d introduced with Republican Dusty Johnson to help digitize permitting had won support from both the Natural Resources Defense Council and the American Petroleum Institute — two advocacy groups not typically speaking in harmony. (He’s not the only one taking a crack at permitting reform, though: Another bipartisan House effort sponsored by House Natural Resources Committee chairman Bruce Westerman and moderate Maine Democrat Jared Golden would limit when National Environmental Policy Act-mandated reviews happen, install time limits for making claims, and restrict judicial oversight of the NEPA process.)
But unless Democrats trust the Trump administration to actually allow renewables projects to go forward, his proposal could be dead on arrival. Since the signing of the One Big Beautiful Bill Act on July 4, the executive branch has been on the warpath against renewables, especially wind. With the Trump administration’s blessing, OBBBA restricted tax credits for renewable projects, both by accelerating the phaseout timeline for the credits (projects have until July of next year to start construction, or until the end of 2027 to be placed in service) and by imposing harsh new restrictions on developers’ business relationships with China or Chinese companies. Mere days after he signed the final bill into law, Trump directed the Internal Revenue Service to write tougher guidance governing what it means to start construction, potentially narrowing the window to qualify still further.
“I think all of this fuzz coming out of the Trump administration makes trust among Democrats a lot harder to achieve,” Peters told me this week.
In recent weeks, Trump’s Department of the Interior has issued memos calling for political reviews of effectively all new renewables permits and instituting strict new land use requirements that will be all but impossible for wind developments to meet. His Department of Transportation, meanwhile, insinuated that the department under the previous administration had ignored safety concerns related to radio frequencies while instituting onerous new setback requirements for renewables development near roadways.
Peters acknowledged that bipartisan permitting reform may be a heavy lift for his fellow Democrats — “a lot of Democrats didn’t come to Congress to make permitting oil and gas easier,” he told me — but that considering the high proportion of planned projects that are non-emitting, it would still be worth it to make all projects move faster.
That said, he conceded that his argument “loses a lot of force” if none of those planned non-emitting projects that happen to be solar or wind can get their federal permits approved. “How can I even make a deal on energy unless I get some assurance that will be honored by the President?” Peters told me.
Other energy and climate experts broadly supportive of investment-led approaches to combatting climate change still think that Democrats should push on with a permitting deal.
“All of this raises the importance of a bipartisan Congressional permitting reform bill that contains executive branch discretion to deny routine permits for American energy resources,” Princeton professor and Heatmap contributor Jesse Jenkins posted on X. “Seems like there's a lot of reasons for both sides to ensure America's approach to siting energy resources doesn't keep ping-ponging back and forth every four years.”
But permitting reform supporters are aware of the awkward situation the president’s unilateral actions against renewables puts the whole enterprise in.
“The administration’s recent measures are suboptimal policy and no doubt worsen the odds of enacting a technology-neutral permitting reform deal,” Pavan Venkatakrishnan, an infrastructure fellow at the Institute for Progress, told me.
At the same time, he argued that Democrats should still try to seek a deal, pointing to the high demand for electrons of any type. Not even the Trump administration can entirely choke off demand for renewables, so permitting reform could still be worth doing to ensure that as much as can evade the administration’s booby traps can eventually get built.
“Projects remain at the mercy of a burdensome regulatory regime,” Venkatakrishnan said. “Democrats should remain committed to an ambitious permitting deal — the best way to reduce deployment timelines and costs for all technologies, including solar-and-storage.”
Venkatakrishnan also suggested that Democrats could, in a bipartisan deal, seek to roll back some of the executive branch actions, including the Interior memo subjecting wind and solar to heightened review or the executive order on the definition of “begin construction.” There would be a precedent for such an action — the 2024 Manchin-Barrasso permitting reform bill attempted to scrap the pause on liquified natural gas approvals that the Biden administration had implemented. But then of course, that didn’t ever become law. (Manchin and congressional Republicans were able to clear the way to permitting a specific project, the Mountain Valley Pipeline in a larger bipartisan deal.)
What could unlock a deal, Yogin Kothari, a former congressional staffer and the chief strategy officer of the SEMA Coalition, a domestic solar manufacturing group, told me, would be the Trump administration getting actively involved. “The administration is probably going to have to lead,” Kothari said. “It’s going to be up to folks in the administration to go to the Hill and say, We do need this, and this is what it’s going to mean, and we’re going to implement this in good faith.”
This would require a delicate balancing act — the Trump administration would have to think there’s enough in a deal for their favored energy and infrastructure projects to make it worth perhaps rolling back some of their anti-renewables campaign.
“The administration is going to have to convince Democrats that it’s not permitting reform just for a subset of industries,” i.e. oil, gas, and coal, “but it is really technology neutral permanent reform,” Kothari said. “On the Senate side, it comes down to whether seven Senate Democrats feel like they can trust the admin to actually implement things in a way that is helpful across the board for energy dominance.”
One reason the administration itself may have to make commitments is because Congressional Democrats may not trust Republicans to stand behind legislation they support and vote for, Peters told me.
“Obviously we’d have to get some face-to-face understanding that if we make a deal, they’re going to live by the deal,” he said.
Peters pointed to the handful of Republicans who successfully negotiated for a longer runway for renewable tax credits, only to see Trump move almost immediately to tighten up eligibility for those tax credits as reason enough for skepticism. He also cited the cuts to previously agreed-upon spending that the Trump administration pushed through Congress on a party line vote as evidence that existing law and deals aren’t necessarily stable in Trump’s Washington.“If we do a deal — Republicans and Democrats in Congress, the House and Senate, get together and make an agreement — we have to have assurance that the President will back us,” Peters told me.
No bipartisan deal is ever easy to come by, but then historically, “everybody lives by it,” he said. “I think that may be changing under this administration, and I think it makes everything tougher.”
And more of the week’s most important conflicts around renewable energy.
1. Sussex County, Delaware – The Trump administration has confirmed it will revisit permitting decisions for the MarWin offshore wind project off the coast of Maryland, potentially putting the proposal in jeopardy unless blue states and the courts intervene.
2. Northwest Iowa – Locals fighting a wind project spanning multiple counties in northern Iowa are opposing legislation that purports to make renewable development easier in the state.
3. Pima County, Arizona – Down goes another solar-powered data center, this time in Arizona.
4. San Diego County, California – A battery storage developer has withdrawn plans to build in the southern California city of La Mesa amidst a broadening post-Moss Landing backlash over fire concerns.
5. Logan and McIntosh Counties, North Dakota – These days, it’s worth noting when a wind project even gets approved.
6. Hamilton County, Indiana – This county is now denying an Aypa battery storage facility north of Indianapolis despite growing power concerns in the region.
They don’t have much to lose, Heiko Burow, an attorney at Baker & Mackenzie, tells me.
This week, since this edition of The Fight was so heavy, I tried something a little different: I interviewed one of my readers, Heiko Burow, an attorney with Baker & Mackenzie based in Dallas, Texas. Burow doesn’t work in energy specifically – he’s an intellectual property lawyer – but he’s read many of my scoops over the past few weeks about attacks on renewable energy and had legitimate criticism! Namely, as a lawyer who is passionate about the rule of law, he wanted to send a message to any developers and energy wonks reading me to use the legal system more often as a tool against attacks on their field.
The following conversation has been abridged for clarity. Let’s dive in.
So Heiko, you reached out to me after my latest scoop about how the Trump administration is now trying to create national land use restrictions on wind projects through the Department of Transportation. In your email, you said the Trump administration “cannot invent a setback requirement by executive fiat.” What does this mean?
Something you need to understand from my point of view is, there’s all these things coming out of the White House, the executive. Like the setback requirement: If the law says they have the right to do that, then okay. But the viewpoints of the administration do not replace the law.
There’s no requirement in the law that the Secretary of Transportation can require a setback. He can’t just come in and say here’s a required setback. The government can only do what the law allows a government to do.
For example, a CEO can’t come into a company and say all the contracts are null and void. The president, in the same way, can’t say everything that’s legally binding is no longer legally binding. There are two ways that creates a problem: one is that it is a breach of contract, and the courts will say there’s a different remedy for that. But there’s also a constitutional problem with that.
Why did you reach out to me about this story, in particular?
I’m just concerned about the environment, and our country, and our democracy.
As someone who works with corporations navigating the legal system under Trump, why do you think companies – like renewable developers – aren’t suing left and right in this moment?
I think they’re timid.
It’s not just companies – it’s stakeholders in general. In 2017, there was pushback on Trump. That is missing. Look at the tech industry – and a lot of investments in renewable energy come from the tech area – and how they lined up with Trump on Inauguration Day.
That is fear. I’d say other stakeholders too are now ruled by fear.
As someone who advises companies in other areas of law, what posture do you think renewable energy companies should take?
Band together. Renewable energy companies, you don’t have much to lose. He’s persecuting you.
I know people stay under the radar, like community solar entities that he could have forgotten about. But he didn’t forget about them. So they need to band together and fight.
Everybody’s just lying low and being afraid. But how much more can renewable energy companies lose? Right now they’re still surviving, because the business case for renewable energy works and states are supporting it. But they’re quiet about it on the national level.
If people start believing what Trump says is the force of law, then it’ll just be that way. And I don’t see a coordinated response to that.