An analysis by the clean energy nonprofit RMI revealed that utility companies are spending more on local transmission projects and building fewer regional transmission lines, which is leading to rising electricity charges for customers.
What's happening?
Inside Climate News reported that utility companies aren't investing enough in large interstate transmission lines. These high-capacity power lines move electricity over long distances and function as the "interstate highways" of the grid.
It's important to build more of these high-voltage lines to help society transition to clean energy, but companies don't usually prioritize them because of public pushback, legal difficulties, and a burdensome, inefficient permitting process. While local transmission lines are easier and faster for utility companies to build, neglecting larger projects can lead to congestion in the grid and drive up electricity costs.
"We wanted to sound the alarm that ratepayers are seeing increasing bills," Claire Wayner, senior associate at RMI and lead author of a report on the regulatory gap for local transmission projects, told Inside Climate News. "They're seeing more and more transmission charges on their bills, and yet more and more dollars are going toward these smaller local projects that may not be addressing regional needs in the most efficient way possible."
As utility providers have invested more in small transmission projects over the last 15 years, transmission and distribution charges jumped from 10% of the total average U.S. household's electric bill in 2005 to over 24% in 2020, per the report and Inside Climate News. Distribution lines carry electricity from substations to local residences and businesses.
Why is the regulatory gap in utility projects concerning?
As RMI's report stated, a lack of oversight in transmission projects is leading to billions of dollars going toward lower-voltage, small projects instead of larger regional transmission lines. This is not only an inefficient use of ratepayer money, but the environmental toll may be larger for local projects than for well-planned regional lines because of an inadequate review process.
In the long term, focusing too much on smaller transmission lines instead of interstate lines could make the clean energy transition costlier and less efficient, leading to higher electricity costs and a less stable grid.
What's being done about it?
Inside Climate News detailed that the RMI report contains several suggestions on how to overcome the regulatory gap and connect more regional transmission projects to the grid. For one, the report recommended that the Federal Energy Regulatory Commission, which regulates transmission projects, prioritize regional lines and require stricter regulations for local power lines.
According to Phil Moeller, a vice president of the trade group Edison Electric Institute, some grid operators are trying to get the ball rolling on regional transmission projects, including the Midwest grid electric transmission system's plan to build more than $20 billion in interstate lines.
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The western U.S. electrical grid will also be getting an upgrade, with 3,000 miles of energy transmission planning to be added across 14 states. In Vermont, a state utility company is taking a different approach by installing TV-sized batteries in homes once the project is approved, which will decentralize energy and reduce costs for consumers.
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