Wiring America Up to Green Power

Should the U.S. subsidize vast high-voltage lines to transport wind and solar electricity to the big cities?

By John Carey

The wind howling over the Great Plains and the unrelenting Southwestern sun pack enough energy to power the entire U.S. with clean, renewable electricity. Trouble is, there's no way to get that power from the Dakotas or Nevada to America's big cities, many on the East Coast. As much as 300,000 megawatts worth of green power, enough to replace more than 300 coal-fired power plants, is being held on the shelf, as it were, because of the lack of transmission lines. This has sparked a movement to create "green power superhighways," as supporters call them. "A high-voltage transmission system will cost a tiny fraction of the money we spent on the highways and do a ton more good," argues Joseph L. Welch, CEO of ITC Holdings (ITC), a Novi (Mich.) transmission line developer.

The idea has powerful support in Washington. Senate Majority Leader Harry Reid (D-Nev.) sees an expanded power line system as key not only to tackling global warming but also to creating jobs in Nevada and the rest of the West. Now, as the Senate begins deliberation on its climate bill, advocates are pushing for a national transmission effort to be part of the legislation.

But is subsidized transmission really a good idea? Naysayers such as Ralph Izzo, CEO of Newark (N.J.) utility PSEG (PEG), argue that such a system would undermine the development of renewable power. His company is putting solar panels on rooftops and planning to build hundreds of wind turbines in the waters off the New Jersey coast. Those projects would no longer be economically feasible if cheaper wind power from the Dakotas came flooding into the Northeast on the new power lines. Creating a transmission system that's largely free to users, on the model of Interstate highways, "unfairly biases [people] against the construction of renewables in parts of the country closest to the load," Izzo complains.

Worse, from the perspective of both Eastern utility executives like Izzo and many environmentalists, is the fact that many of the power lines we build to transport wind energy are destined to travel through coal regions. An electrical wire doesn't care if electrons are "green" or "brown." And since utilities have every incentive to fill up wires to their capacity, any available cheap coal electricity would hop aboard for the trip to the Northeast. That would hurt local utilities—and increase carbon emissions. "There's a very high risk that new transmission development, however well-intentioned, will simply facilitate more of the same old conventional stuff," cautions Environmental Defense Fund (EDF) analyst Mark Brownstein.

Going Big vs. Going Small

At one level, this debate pits wind developers in the West, who need the transmission lines, against companies like Deepwater Wind in Hoboken. N.J., which is eyeing offshore wind resources on the East Coast. "I don't want federal tax dollars paying to export jobs to the West," says Deepwater Managing Director Jim Lanard. From a more elevated vantage, there's a split over the fundamental vision for America's electricity industry. Is it better to emphasize huge wind farms and solar power plants in remote regions where the winds are strongest and the sun the brightest? Or should investment first be directed toward boosting energy efficiency, thus cutting the need for power, and toward smaller-scale electricity generation by means of rooftop solar panels, offshore wind turbines, and other close-to-home efforts? For all the different players, "the stakes are enormous," says PSEG's Izzo.

Business Exchange

Track and share business topics across the Web.