Peters-Hickenlooper BIG WIRES Act Would Speed Permitting Reform, Simplify Grid Upgrades

Scott H. Peters | Official U.S. House headshot

By San Diego City Wire Report

May 31, 2023

WASHINGTON – On May 26, Representative Scott Peters and U.S. Senator John Hickenlooper shared details of their forthcoming Building Integrated Grids With Inter-Regional Energy Supply (BIG WIRES) Act. As featured in multiple national press outlets, the legislative proposal is being considered as a key component of a compromise solution to the debt ceiling impasse.

“Our electric grid is outdated and vulnerable to increasingly severe extreme weather. To ensure Americans have access to clean and reliable electricity, we must enact reforms to speed the build-out of electric transmission lines,” said Rep. Peters. “The BIG WIRES Act would ensure regions can transmit sufficient electricity between each other, making everyone more secure during heat waves, hurricanes, or other stresses on the electric grid.”

“We’re on the verge of energy abundance and independence if we can just get the energy from where it's made to where it's needed,” said Sen. Hickenlooper. “Wind, geothermal, nuclear. Show me a new power project in this country and I’ll show you red tape and haphazard grid planning holding us back.”

Currently, new energy projects must pay for costly interconnection upgrades – fees to connect new transmission lines to the existing grid, creating undue cost burdens on the projects themselves and increased energy prices for consumers.

Hickenlooper and Peters’ legislation would direct the Federal Energy Regulatory Commission (FERC) to better coordinate construction of an interregional transmission system to minimize such haphazard, patchwork upgrades to the grid.

The legislative proposal would cost the government no money. Instead, utilities and other transmission developers would be responsible for upgrading the grid. Because interregional transmission makes the grid operate more efficiently, money spent on new lines would be more than offset by savings on numerous smaller transmission projects.

A recently approved set of transmission lines in the Midwest is expected to deliver over twice its costs in savings and other benefits to ratepayers. The BIG WIRES Act would deliver similar or greater benefits nationwide.

More specifically, the legislation would:

Establish a minimum-transfer requirement, which requires regions of the country to be able to transfer at least currently 30% of their peak electrical loads with other regions.
Direct FERC to prioritize grid upgrades that lower costs for consumers and increase the grid's resiliency to threats such as extreme weather and cyber- and physical attacks.
After an 18-month rulemaking period, gives regions two years to decide themselves how they will meet the minimum-transfer requirements, and requires them to submit plans that specify:
- Which entities will build or implement grid upgrades.
- Which entities will pay for the grid upgrades.
  - The bill does not change FERC's existing cost allocation principles, meaning costs will be assigned "roughly commensurate with benefits" unless regions choose otherwise.
- Timelines for building or implementing the grid upgrades.
- If regions fail to submit plans which satisfy the minimum-transfer requirement by the deadline, FERC is empowered to act as a backstop and do so in their stead.
Denote that grid upgrades that count towards meeting the requirement can include:
- Upgrades that increase the ability to transfer power between regions, including:
  - Interregional transmission: new interregional lines or upgrades to existing lines.
  - Regional or local transmission: new or upgraded non-interregional transmission counts to the degree that it increases the system’s ability to move power between regions.
  - Generation: new electrical generation that allows more power to flow between regions.
  - Grid-enhancing technologies that improve the operation of the current system.
  - Upgrades that lower peak demand, such as energy efficiency and demand response.

Two recent FERC Chairmen, Republican Neil Chatterjee and Democrat Rich Glick, have spoken in support of the bill.

"With the risk to grid reliability increasing from more frequent extreme weather events across the country, the ability to flow surplus electricity between regions is becoming a national imperative. That is why policies promoting more interregional transmission are so important. I applaud Senators Hickenlooper and Representative Peters for introducing the BIG WIRES Act. By requiring that FERC establish a minimum interregional transfer capability standard, this important bipartisan legislation will dramatically improve our country’s ability to move power between regions where and when it's needed most, enhancing grid reliability for all Americans.” - Neil Chatterjee, former Chair, FERC

“Over the last several years we have witnessed what can happen when there is not enough electric transmission capacity connecting regions. Utility customers are at greater risk of losing access to power during extreme weather events, and they are often forced to pay much more for electricity than they otherwise would with a more efficient electric grid. Senator Hickenlooper and Congressman Peters deserve credit for elevating this important subject with the introduction of the BIG WIRES Act.” - Rich Glick, former Chair, FERC

The minimum-transfer requirement concept was first proposed in response to FERC’s 2021 Advanced Notice of Proposed Rulemaking (ANOPR) on Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection. Organizations supporting a minimum-transfer requirement included large utilities, energy developers, think tanks, consumer groups, and grid operators, including: