Stakeholder-driven transmission siting can happen once communities realize what is on the table.

By Robin Allen

“Rainbow and Power Lines at the Palo Alto Baylands” by Don DeBold is licensed under CC BY 2.0

Robin Allen is a senior fellow with the Niskanen Center Climate department.

The thorny problem of overcoming opposition to the extensive buildout of transmission infrastructure, which the nation needs to achieve its reliability and climate goals, has so far been considered only from a top-down perspective.

Planners and developers typically believe they must persuade, cajole, incentivize and sometimes coerce local communities into accepting new high-capacity power lines. However, a careful review of recent projects suggests an entirely different model: stakeholder-driven transmission, where communities proactively seek out transmission developers to host these projects.

Where will that demand come from? It will stem from the growing recognition that a transmission corridor can be reimagined as a broader infrastructure corridor, offering local communities vital new services beyond improved energy service.

Not only is there significant money on the table in projects that connect new generations to load centers, but there is also now a clear record of communities making actual deals to benefit from those funds.

Why all this money on the table for states willing to partner with developers — i.e., why have states and stakeholders been granted significant co-located infrastructure in exchange for state support of the transmission line? “Money on the table” comes from two significant sources. First, there are typically sizable price differences in wholesale electric generation prices between U.S. regions — merchant transmission developers can arbitrage these differences to finance new lines. Second, developers save significant time and money if states facilitate the siting and permitting process. Such cooperation can free up funds for stakeholders to use on desired co-located amenities. 

As I show in a just-released report from the Niskanen Center, recent history provides plenty of examples of deals, incentives and accommodations made to facilitate lines. These include burying lines, offering line co-ownership, providing special funds, siting in existing corridors and agreeing to alternate routes. 

Some specific examples: in some instances, developers are willing to pay the higher costs of burying high-capacity transmission — for example, SOO Green HVDC Link and Champlain Hudson Power Express — to obtain line approval. In Missouri, Invenergy increased the amount of power deliverable to the state from 500 MW to 2,500 MW. This incentivized the Missouri Public Service Commission’s approval of its proposed Grain Belt Express line. Southern California Edison granted the Morongo Band Tribe an option to invest up to half the total construction cost for the West of Devers Project, allowing the tribe to earn revenues well into the future.