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U.S. Electricity Infrastructure: State Initiatives for Advancing Security, Technology and Market Transformation

U.S. Electricity Infrastructure: State Initiatives for Advancing Security, Technology and Market Transformation. Sue Gander Director Environment, Energy and Natural Resources Division National Governors Association Center for Best Practices 202-624-7740 sgander@nga.org

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U.S. Electricity Infrastructure: State Initiatives for Advancing Security, Technology and Market Transformation

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  1. U.S. Electricity Infrastructure: State Initiatives for Advancing Security, Technology and Market Transformation Sue Gander Director Environment, Energy and Natural Resources Division National Governors Association Center for Best Practices 202-624-7740 sgander@nga.org www.nga.org/center/eenr

  2. Overview • Electricity infrastructure challenges • State leadership to address these through transmission, technology and markets • Transmission • Planning, cost allocation, environment • Smart Grid • Pilots and road maps • Energy efficiency as a resource • Best practices and opportunities • ARRA (Recovery Act) support

  3. The National Governors AssociationProviding Governors Ideas that Work • Federal Relations • Builds consensus on federal issues • Committee structure • Gives governors a collective voice on Capitol Hill • Center for Best Practices • Comparative policy shop • Provides governors and staff timely technical assistance • Securing a Clean Energy Future (2007-2008) • Strengthening our Infrastructure for a Sustainable Future (2008-2009)

  4. Transmission Benefits - If We Get it Right Source: Energy Future Coalition and NGA Center

  5. Transmission faces “old” challenges… • Growing demand for electric services • Growing population/reliance on digital technology/PHEVs • Aging infrastructure • Grid is similar to one envisioned by Thomas Edison • 70% transmission lines at least 25 years old • 70% power transformers at least 25 years old – average age is 40 years • 60% of all circuit breakers at least 30 years old • By 2030, the electric utility industry will need to invest up to $2.0 trillion to maintain today’s level of service ($300 B in transmission) • Concerns with reliability • Three major blackouts in last 9 years • Impacts quality of life, safety, bottom-lines

  6. Transmission Faces New Challenges… • Concerns about global climate change • Electricity use is 40 percent of U.S. CO2 emissions • Greening of power supply • 20 states have CO2 reduction targets • 33 states have Renewable Portfolio Standard (RPS) or similar goal for electricity • Nearly 20 states with Energy Efficiency Resource Standards (EERS)

  7. The Transmission Planning Process Source: Energy Future Coalition

  8. State Leadership on Transmission Needs Three areas of focus: • Doing more -- Addressing planning, cost allocation • Doing it smarter -- Improving the grid • Doing it better -- Reducing demand for transmission (deferring investments)

  9. Improved Transmission Planning -- CA • Renewable Energy Transmission Initiatives (RETI) • Statewide collaborative process between CPUC, CEC, CAISO, other utilities, land managers, and enviros • RETI process will identify, plan and permit the “best” transmission lines to meet CA’s 33% RPS • Includes significant investment by PG&E

  10. Improved Planning -- MT, CO, UT • Montana Alberta Tie Ltd. transmission line • 230 kilovolt, 214 mile-line that will connect state energy to markets in Alberta, Canada • completed the permitting process in 2008 • expected to attract nearly $1 billion in wind development • Colorado study to propose ways to achieve 1 GW of new RE capacity • Utah statewide REZ study – Phase I completed

  11. Improved Planning -- Regional Efforts • Western Governors Association - WREZ • GIS based study on potential for large scale development of renewable resources – June 15 phase I • Partner with utilities to evaluate needs to move power from preferred REZs – 30,000 MW by 2015 • Upper Midwest Transmission Development • MGA Governors of IA, MN, ND, SD, and WI • Identify cost-effective wind resources and transmission infrastructure projects • Cost allocation and planning working groups

  12. ARRA Support for Transmission • DOE provided $6.5 billion for transmission activities • Western Area Power Administration and Bonneville Power Authority each given $3.25 billion in spending authority • To construct transmission only for delivery of RE power • Projects must repay the U.S. Treasury with interest • Additional ARRA planning provisions • Regional Planning Entity must be established for 3 interconnections (Western, Eastern, Texas)

  13. Smart Grid - The Potential Source: http://www.urbanecoist.com/wp-content/uploads/2009/03/smartgrid_454570a-6.jpg

  14. Smart Grid -- The Barriers • New technology risk • Lack of standards • Security and interoperability • Cost recovery risk • Who pays, who benefits? • Need a strategy • Statewide vision, plan or roadmap

  15. Selected Smart Grid Pilots

  16. ARRA Support for Smart Grid • The Smart Grid Investment program - $3.4 billion available starting in the summer and DOE anticipates over 1,500 applications • The Smart Grid Demonstration program has $615 million available through matching grants

  17. EE as a Resource - New England • ISO New England and Forward Capacity Market • Electricity resources compete for capacity payments • Accepts DR (e.g. EE, DG, load management, etc) • All resources that clear auction paid market clearing price & receive up to 5-yr usage commitment • Offers price response and reliability response • 2,029 MW of DR as of 12/2008 • Played key role in July/Aug 2008 heat wave • NYISO saved 948MW in peak demand • CT saved 217 MW

  18. EE as a Resource - Mid-Atlantic • Demand Response in PJM • Planning Auction for 2012/2013 held in May • 10,464 MW of incrementally new capacity available • Auction resulted in 5,682 of DR, 400% over last year’s auction • Wind resources accounted for 323 MW • Combined results of six PJM capacity auctions = 27,640 MW

  19. EE Barriers • Upfront costs • Measurement & verification • Scale

  20. ARRA Support for EE $3.1 billion to state energy offices $3.2 billion in energy efficiency conservation block grants Additional support for weatherization, green schools, bonding authority, tax incentives etc.

  21. Conclusions • States need combination of transmission, smart grid activities along with creative market mechanisms to ensure delivery of clean, affordable and reliable energy • Do more, Do it smarter, Do it better • ARRA presents opportunities for states and regions to move ahead

  22. Resources • DOE/Office of Electricity • EPA/National Action Plan on Energy Efficiency • EPRI • Edison Electric Institute • National Council on Electricity Policy • Regulatory Assistance Project • Center for American Progress • American Council for an Energy Efficient Economy

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