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AMERICAN PUBLIC PoNosp- *PO W 1116I(TM ASSOCIATION Powering Strong Communities ISSUE BRIEF January 2017 Electric Transmission Policies Summary Background The Federal Power Act(FPA),the law governing the bulk Once most electricity is generated,it travels over high-voltage transmission system,was amended by the Energy Policy Act of bulk power transmission lines from the generating unit to 2005 (EPAct05),and the results have been mixed.Since 2005, the area where it will be consumed.The electric transmission for example,there have been efforts to get transmission built to network in the U.S.is organized into three"interconnec- remotely located renewable generation,but to do so adds addi- tions"—very large bulk power transmission grids that operate tional complications to an already complex system.The Federal in sync and that must be carefully coordinated at every moment Energy Regulatory Commission(FERC),the federal regulatory to prevent widespread blackouts.The three are the"Eastern agency that implements the FPA,has issued several orders over Interconnection," (covering the eastern two-thirds of the U.S. the last several years related to regional and interregional trans- and Canada),the"Western Interconnection" (covering the mission planning and cost allocation,integration of intermittent western U.S.and Canada),and the Electric Reliability Council generation(such as wind and solar,that is not available 24 of Texas("ERCOT,"covering most,but not all,of Texas).These hours a day,seven days a week) into the bulk electric grid,and interconnections set electrical boundaries.Electrons flow freely applicability of open season and open access rules to merchant within them,but do not flow freely between them.There are transmission projects and transmission built to support specific a few places where the interconnections do connect with each generation projects.FERC's actions have muted calls by some to other,but power flows at these points are carefully controlled. revisit transmission legislation. Once electrons flow from the generating unit to the bulk State and local governments generally regulate the electric power grid,their path generally cannot be dictated.Electrons distribution system(the hundreds of thousands of miles of follow the path of"least impedance,"meaning they will go lower-voltage lines that provide power to homes and businesses) where their movement meets the least resistance.The path of and the electric utilities that own and operate these facilities. least impedance is determined on an instantaneous basis by However,some proposals in Congress and actions by FERC the laws of physics and a complex interplay of the capacity of have sought to encroach on some of this state and local author- transmission lines to move the electrons,the location of the ity in recent years.This regulatory tension between states/local- generation,and the amount of electricity consumed by homes, ities and the federal government will continue,especially as the factories,and businesses located at different points along the federal government seeks to promote new technologies,such as grid in that particular moment. "smart"grids and distributed energy resources,and to expand its Therefore,specific electrons cannot be delivered to a specific authority over electric system reliability. place on the interconnected grid.For example,if Utility"A" The American Public Power Association(Association or buys power from the owner of Generator"B,"Generator B APPA)believes that new bulk transmission facilities are needed. will deliver the power to the point where the generator's plant Siting constraints and cost allocation(who pays) continue to connects to the grid and Utility A will receive the power it needs be the major impediments to getting new transmission facili- from a different point on the grid.The electrons that Utility ties built.The Association also believes that regulation of the A uses to provide power to end-use customers are likely a mix vast and enormously complex distribution systems owned and of electrons from Generator B and many other generators,all operated by close to 3,000 utilities nationwide should continue using different fuels and technologies.However,Utility A will to reside with state and local governments. still receive power and Generator B will still be paid.Problems with the transmission wires or multiple generator outages would impede the ability of Utility A to receive electricity,even if Gen- PublicPower.org 7 189