Four members of Congress are urging the Federal Energy Regulatory Commission to adopt a “shared savings” incentive to encourage the use of grid-enhancing technologies, or GETs, to bolster new or existing transmission.
GETs — such as dynamic line ratings, advanced power flow controls and topology optimization — are “typically much cheaper” than traditional grid buildout options and can be deployed rapidly, Sens. Peter Welch, D-Vt., and Angus King, I-Maine, and Reps. Kathy Castor, D-Fla., and Paul Tonko, D-N.Y., said in a Wednesday letter to FERC.
“GETs can enable transmission owners to bolster capacity by freeing up transmission congestion and making the most of existing lines,” they said.
In a study released last month, RMI found that installing GETs in five PJM Interconnection states would allow 6.6 GW of proposed clean energy resources to connect to the grid, saving consumers about $1 billion a year in reduced generation costs.
“GETs have repeatedly been demonstrated — in modeling and in real-world deployment — to improve grid reliability, resiliency, flexibility, capacity, and efficiency,” the lawmakers said.
GETs are needed to address growing electricity demand and clean energy deployment challenges, the lawmakers said, noting that solar and wind projects are waiting in long interconnection queues, while transmission owners struggle to find space on the grid to interconnect them.
In a March 2020 proposal on transmission incentives, FERC offered to provide extra return on equity for GETs projects.
However, the lawmakers said providing a framework for GETs owners and consumers to share in the savings the projects offer was “the most promising structure” to spur the use of the technologies.
“Because the vast majority of utilities in the United States earn a fixed rate of return on their capital investments, they are not incentivized to implement solutions which will save them, and ultimately ratepayers, money,” the lawmakers said. “A well-implemented shared saving system would fix this problem.”
Shared savings would address two key barriers to GETs, according to Bruce Tsuchida, a principal at the Brattle Group, a consulting firm. First, utilities have incentives to invest in large projects so they can earn a larger return, he said Friday.
Second, transmission owners and operators don’t have an incentive to reduce grid congestion because they can pass those costs onto ratepayers, according to Tsuchida.
GETs legislation, action in Minnesota
State lawmakers are also advancing legislation to encourage GETs. Bills are pending, for example, in Minnesota that would require the state’s major utilities — Great River Energy, Minnesota Power, Otter Tail Power and Xcel Energy — to develop plans for relieving grid congestion using GETs. The plans would be reviewed by the Minnesota Public Utilities Commission.
Grid North Partners, a group of Minnesota utilities, in October said it was advancing 19 projects to relieve congestion in the state. Five of the projects use ambient adjust line ratings to relieve congestion. FERC in December 2021 ordered all transmission owners to consider ambient conditions when determining how much power can flow through their power lines.
“Market congestion is an issue right now and big transmission projects take eight to 10 years to build,” Jared Alholinna, Great River Energy’s manager of regional transmission planning, said in a statement. “The goal of this effort was to identify what can be done to mitigate congestion within the next few years.”
Great River Energy, a wholesale transmission and generation cooperative, has been working on GETs projects with Heimdall Power, a company that provides ambient and dynamic line rating equipment.
Using Heimdall’s dynamic line rating system, Great River Energy was able to increase the capacity on a key power line by about 25% overall, according to Jørgen Festervoll, CEO at Heimdall.
