EPA State Climate and Energy Technical Forum States’ Role in Planning Collaborative Background Document

I. Background on Eastern Interconnection Transmission Planning

In 2009, the U.S. Department of Energy (DOE) announced an opportunity for the three regions of the U.S. power grid1 to launch a new effort to strengthen transmission planning capabilities that support federal and state energy policy goals. According to DOE, national goals relating to clean electricity “cannot be Topics Covered in This Document achieved without an adequate electricity delivery system. • Why is there increased interest in Interconnection-wide Robust transmission and distribution networks are essential to planning? enable the development, integration, and delivery of new • What are EIPC and EISPC? renewable and other low-carbon resources, and the use of low- • Why should transmission carbon electricity to displace petroleum-based fuels from the planning take into account state transportation sector.”2 The Eastern Interconnection Planning and federal clean energy Collaborative (EIPC) and the Eastern States Planning Council policies? (EISPC) received funding from DOE to work together and with • How will this transmission other stakeholders to develop these first-of-a-kind planning planning effort help state policy makers? efforts across the Eastern U.S., as well as long-range resource and transmission studies. This background document describes the EIPC and EISPC partnership in more detail, its importance to state policy makers, and the relationship between electricity transmission planning and the environment.

II. What are EIPC and EISPC? Electricity Interconnections The term “Interconnection” means a The Eastern Interconnection Planning Collaborative geographic area in which the (EIPC) is a partnership between 27 transmission planning operation of bulk-power system authorities in the Eastern U.S. EIPC successfully competed components is synchronized such for and received $16 million in funding to conduct Eastern that the failure of one or more of those components may adversely Interconnection-wide transmission studies and to develop a affect the entire region. The three stakeholder process to guide the analyses. The modeling and interconnections in the lower 48 analyses are designed to build on existing regional planning states are: processes and to identify potential opportunities for efficiencies between regional transmission plans. A Stakeholder Steering The Eastern Interconnection, which covers the 39 states from the Atlantic Committee (SSC), comprised of state and federal policy to the foothills of the Rocky makers, industry, and non-governmental stakeholders, is Mountains. working to develop a range of future scenarios reflecting an The Interconnection, which array of diverse economic and policy conditions that would includes most of Texas. have significant implications for the transmission system.3 For The , which extends from the Rocky Mountains to instance, the SSC is considering scenarios that describe a future the west coast. (See map on pg. 2) with an aggressive federal carbon constraint and others where no federal carbon policy is adopted. Other scenarios under consideration are a future with a national Renewal Energy Standard (RES), one reflecting more aggressive energy efficiency

1 Eastern Interconnect, Western Interconnect and Electric Reliability Council of Texas (ERCOT) 2 DOE, Financial Assistance Funding Opportunity, DE-FOA0000068. pg. 5 3 http://eipconline.com/About_EIPC.html

1 policies, one with an expansion of nuclear generation, and a business-as-usual future that anticipates little change from The EIPC Stakeholder Steering Committee includes eight key today’s policy framework. Each scenario will be modeled to stakeholder sectors: determine the transmission, emissions and cost implications, � States and ultimately the SSC will select three scenarios for more � Canadian Provinces detailed transmission expansion plans. The new Eastern � Transmission Owners & Interconnection-wide modeling tools and the information from Developers � Generation Owners & the analyses will be shared with state and federal policy makers Developers (including at least and regional planning authorities to help inform future energy one renewable energy and environmental policy and transmission planning and generator) decision making. � Other Suppliers (Demand-side resources and distributed generation) The Eastern Interconnection States' Planning Council � Non-governmental (EISPC) represents the 39 states, District of Columbia, New organizations (including Orleans and 8 Canadian Provinces located within the Eastern environmental and land Interconnection.4 Supported by $14 million from DOE, preservation advocates) EISPC’s goal is to “create an unprecedented collaborative � Public Power and Transmission-dependent among the states in the Eastern Interconnection comprised of Utilities Commissions, Governors' offices, energy offices, � End Users (including consumer and other key government representatives.” The 81 members of advocates) EISPC have designated ten individuals to be part of the EIPC Stakeholder Steering Committee and represent the interests of states in this transmission planning exercise.5

Map of States and planning regions comprising the three Interconnections 6

4 http://communities.nrri.org/web/eispc/designees-and-proxies 5 www.EISPC.org 6(http://www.nerc.com/page.php?cid=1%7C9%7C119

2 EISPC plans to complete a number of studies and white papers to provide valuable information to states and stakeholders as EISPC white papers are expected to cover a range of topics relevant they develop the scenarios for the transmission analyses. 7 to defining the scenarios, including: Through these studies, EISPC will explore the following: � Renewable Energy Credits � Market structure impacts � Renewable/Alternative Energy Zones across the Eastern � Power Purchase Agreements for Interconnection. Renewables � Existing policies that could � Potential locations for no and low-carbon generating impact resource expansion resources. plans � State-by-state potential for renewable or alternative � energy (e.g., wind, solar, biomass, landfill, hydro, etc.) � Plug-in Hybrid Electric Vehicles as well as imports from Canada. � Natural gas prices � Economic Development � The potential to develop additional demand-side resources in each state, based on work already completed by the Federal Energy Regulatory Commission (FERC). � The potential for distributed generation in each state. � The state-by-state potential for storage and waste-to-energy facilities.

III. Why is transmission planning important to state energy, air and utility regulation offices?

Transmission is a key ingredient in providing reliable, clean electricity and meeting state policy goals, including:

Reliability In 2006, DOE completed a study of the impact of Congestion occurs when actual or congestion on the U.S. transmission system. A key scheduled flows of electricity on a finding was identification of critical congestion areas transmission line or a related piece that pose a threat to meeting reliability standards and of equipment are restricted below require investment in some combination of desired levels— either by the physical or electrical capacity of the transmission, generation, and demand-side resources. line, or by operational restrictions Electric system reliability can be measured by the created and enforced to protect the susceptibility and magnitude of potential disruptions in security and reliability of the grid. delivery of power to customers. DOE also found that The term transmission constraint there are “areas where large-scale congesti