Wiring America Up to Green Power

(page 2 of 2)

Both sides in these debates acknowledge the status quo is not defensible. "Everyone pretty much agrees that the current transmission system is not built to do this job," says Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission. It's antiquated and inefficient, with 9% of all power generated getting lost in transmission (compared with 3.5% in other countries). Plus, mandates for renewable energy in most states and the coming carbon-emissions curbs mean the system must get greener and cleaner. As a result, billions of dollars of transmission upgrades must be made.

The central question is who picks up the tab for new wires. At one extreme are those who argue that since everyone ultimately will benefit, all electricity users should pay a little extra in their bills, just as everyone pays gas taxes to support highways. Yes, the $10 billion high-voltage transmission line ITC wants to build from the Great Plains to Chicago would be a huge boon to wind developers in the Dakotas, but "there are not enough people there to pay for it," says ITC's Welch. "Imagine if you asked them to pay for the Interstate highways." Those who oppose such massive subsidies, like the state of Massachusetts and Northeastern utilities, are looking out for parochial interests, argues Rob Gramlich, senior vice-president for public policy at the American Wind Energy Assn., which is pushing the green superhighway idea. The Eastern states want renewable jobs at home, even if the homegrown clean energy costs more, he says.

Not exactly, retorts PSEG's Izzo. He wants wind developers in the Great Plains or solar plants in Arizona to pay for connecting to the grid. That would make it more expensive to bring that electricity to the East Coast, reducing the chances it will undercut his own renewable projects. His position "is our economic self-interest," he admits, "but it is also aligned with the best interests of the country." Why? Because declining to broadly subsidize electricity transmission would enable local renewable efforts to bloom.

"We Need It All"

It's a difficult debate to resolve. "There are good arguments on both sides," says the EDF's Brownstein. What makes it even more challenging is that the U.S. can't meet the goals of a low-carbon electricity system unless it does everything simultaneously: energy efficiency, small-scale "distributed power" based on renewables, and big wind farms and solar plants. "It's a phony argument. We need it all," says Michael G. Morris, CEO of American Electric Power (AEP).

Sierra Club transmission expert Carl Zichella says the problem could be solved with careful planning. The answer would include making better use of the existing grid and promoting small-scale renewable generation, while also building whatever new power lines the nation needs the most. Zichella is working with a number of groups on proposals for a planning process that could better sort out competing interests on a regional basis. "This may be one of the most important things I have ever worked on," he says.

Carey is a senior correspondent for BusinessWeek in Washington.

Business Exchange

Track and share business topics across the Web.