Background

Changes in the power industry have set the stage for increases in long-distance power sales. Pennsylvania, being situated between high cost energy markets to our east and low cost energy suppliers to our west, is about to see an unprecedented push to site new high voltage transmission lines across the state.

The 2005 amendments to the federal Energy Policy Act created a process for expediting approvals of new long distance transmission routes. Federal "backstop siting authority" takes siting authority away from the states, greatly decreases the time allotted for public input on impacts and the concerns of affected parties, and enables the use of eminent domain for right-of-way acquisition.

In its October 2007 ruling, the Department of Energy included, 52 of the Commonwealth’s counties in the Mid-Atlantic Corridor.

Pennsylvania faces forceful and multiple challenges to the integrity of our natural, scenic and historic landscapes. This newly designated corridor and the process by which it was created will dramatically change the faces of our communities and open spaces.

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What is a NIETC?

A National Interest Electric Transmission Corridor (NIETC) is a geographic area in which new oversight processes and the power of eminent domain can be employed to facilitate the construction of high voltage, interstate transmission lines. The new processes override traditional state siting authority, supplanting long-standing state regulation with new federal oversight. A NIETC is created when so designated by the US Department of Energy (DOE) in response to a request from an entity such as a power company or a regional transmission operator.

Within areas designated as NIETCs, the Federal Energy Regulatory Commission(FERC) is granted backstop siting authority, an unprecedented mechanism for overriding state approval processes. Backstop siting authority can be invoked one year after a transmission application has been filed by a transmission company. Many, in particular organizations dedicated to the protection of parks, wild lands, scenic rivers, and historic monuments, are concerned with the threats posed by the design of the backstop siting process and the manner in which the new law is being implemented. The gravity of the situation has been manifested in our neighboring states where critical resources such as the Wild and Scenic Upper Delaware River and the historic monuments and conservation easements of Northern Virginia became targets for transmission rights of way battles.

Within Pennsylvania, five NIETC designations were requested. American Electric Power (AEP) requested one corridor, Allegheny Power (AP) requested another, and our regional grid operator PJM requested a total of three corridors which together affect fifty-two counties across the Commonwealth.

On April 2, DOE responded by issuing a draft NIETC designation for a large swath encompassing all of the above requests as well as much of New York State, all of New Jersey and Delaware, sections of Northern Virginia, Ohio and West Virginia, and nearly all of the state of Maryland. This Mid-Atlantic Corridor covers, in total, 202 counties across an 8 state region.

In October 2007, the Department of Energy issued its designation confirming the inclusion of these 52 counties. Learn more.

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The Bigger Picture

Major changes in the power industry in the last decade created the new push for interstate transmission lines. Competition among providers is now fostered; in addition, new generation and transmission companies have replaced the vertically integrated utilities which served only those customers within their bounded service area. Power providers scouting for new markets to serve are now looking at customers remotely located from their generation plants.

The ‘congestion’, which is now cited as the justification for constructing interstate transmission lines, reflects the fact that the grid was not built to handle the new volume of long distance bulk power transactions. Power suppliers to our west are thus constrained in their ability to deliver power to consumer markets to our east. The economic costs ascribed to congestion reflect the grid’s limitations to move the power offered by these generation companies to the markets in NY and NJ where they desire to sell their power. The estimates of congestion costs reflect the fact that higher priced power is being consumed regionally than what these power companies would offer to the market.

Other Alternatives
Alternatives to transmission exist which can serve, or reduce, local demand and thereby mitigate the high peak power costs which underlie the arguments offered for new transmission corridors. Giving serious scrutiny to these options is not only sensible planning, it is also required by law. The Energy Policy Act of 2005 states that alternatives to transmission lines will be considered prior to NIETC corridors being designated. To date, these alternatives have not been evaluated fully and in a manner consistent with the recommendations of the Federal Energy Regulatory Commission (FERC) itself:

At minimum, transmission expansion planning procedures would allow demand response resources to be proposed and considered as solutions at congested interfaces or in load pockets, along with local generation or transmission enhancements.’[1]

Before any land in Pennsylvania is designated for a National Interest Electric Transmission Corridor, it is important that the EPAct provision to thoroughly assess other options be carried out. Especially given that recent industry analyses estimate that the costs of peak power (which are the basis of estimated congestion costs) can be reduced by as much as $200,000,000 annually in the PJM system if customer demand is reduced using ‘demand response’ programs to foster conservation during periods of peak demand.

In the Shadow of Project Mountaineer
Our entire mid-Atlantic region is encompassed by an overarching PJM transmission plan known by the name Project Mountaineer. Testimony from the President of PJM before the Federal Energy Regulatory Commission in 2005 shows that:

• the thrust of PJM’s regional transmission planning and expansion for Project Mountaineer is to support the “expanded use of coal-fired resources,” building from earlier activities directed at “opening up markets for coal-based resources"
  
  
• the success of PJM efforts was measured in part in terms of “increased market opportunities for this region’s generation resources”
  
  
• Project Mountaineer “ is an example of how the region can take coordinated regional planning to the next level … [outlining] the scope of transmission projects that would be needed to significantly enhance the ability of coal based resources to reach eastern markets.”
  

Full text of this testimony is available here.

Each of the transmission corridors proposed in Pennsylvania fall under the Project Mountaineer umbrella and are designed to move wholesale power from the west to eastern markets.

[1] Demand Response and Advanced Metering, Federal Energy Regulatory Commission, Staff Report, Docket AD-06-2-00, August 2006.

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Meeting Future Energy Needs

The Pennsylvania Land Trust Association fully recognizes the importance of meeting future electricity needs. We see plenty of evidence that needs can be addressed in a variety of ways that do not require the use of federal eminent domain. We have yet to see anything other than rhetoric and scare tactics suggesting that the use of federal eminent domain is necessary.

DOE wrote in its 2006 National Electric Congestion Study that “congestion solutions will be based upon a thorough review of generation, transmission, distribution and demand-side options, and that such options will be evaluated against a range of scenarios concerning load growth, energy prices, and resource development patterns to ensure the robustness of the proposed solutions.” To date, no such analysis has been forthcoming from the DOE.

Empirical data from other sources suggest that non-transmission solutions are viable options deserving equal consideration and systematic review under any responsible energy resources planning process, especially given the potential to deliver energy resources faster, more economically, with lesser environmental degradation and with greater public acceptance. The 2006 National Action Plan for Energy Efficiency notes that proven demand-side programs are capable of delivering energy resources at a scale comparable to that provided by constructing new power plants and at a cost far below that of any generation option available today. The most recent planning efforts for other states such as Texas and Florida suggest that these efficiency options can be deployed rapidly enough and at a scale sufficient to more than offset all incremental load growth over the next fifteen year planning horizon. A study prepared for our region’s own PJM Interconnect and MidAtlantic Distributed Resources Initiative earlier this year estimates that demand response programs alone could provide in the range of $200 million annually in reduced congestion costs in the PJM system in the coming years.

These sources all suggest that demand-side options provide substantive alternatives capable of delivering energy resources on a scale commensurate with the needs of our society’s growing demands for power. Before new transmission projects are approved and eminent domain is imposed, it is imperative that these other options be given equal consideration. The ramifications for the people and natural resources of Pennsylvania are too great to do otherwise.

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"Congestion" is NOT about Reliability

The Energy Policy Act required the Department of Energy (DOE) to examine transmission congestion and constraints. It is important to bear in mind that transmission system “congestion” and “reliability” are two distinct issues which merit separate consideration in policy decisions. It is possible to have congestion without having reliability problems – as is the case today. Congestion is the inability to deliver lowest priced power at any point in time. This is not a matter of national security, or even system reliability. Congestion is certainly not a matter deserving of the heavy-handed solution of giving private interests eminent domain privileges.

Related Issue Papers: "Disconnect Between Transmission Corridor Data and Today's Energy Market" and "Re-Examining the Need for Mid-Atlantic National Interest Electric Transmission Corridor"

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Eminent Domain in Pennsylvania

The so-called “National Interest” Electric Transmission Corridor for the Mid-Atlantic by the U.S. Department of Energy (DOE) will establish federal eminent domain as the tool of choice for addressing energy interests in the region. Federal eminent domain should be a last resort, rather than the centerpiece of energy policy.

In the last session, the General Assembly passed a new law for the purpose of reining in potential abuse of eminent domain by Pennsylvania municipalities. The federal eminent domain authority to be granted to electrical utilities in 50 Pennsylvania counties presents a far greater threat to private property. Additionally, federal eminent domain threatens local control, community character, sensible energy policy, public health and national security.

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