Part I

The Quadrennial Energy Review (“QER”) is a four-part roadmap for U.S. Energy policy to the year 2040.  It is a non-partisan report that provides “policymakers, industry, investors, and other stakeholders with unbiased data and analysis on energy challenges, needs, requirements, and barriers that will inform a range of policy options, including legislation.”

The first Installment of the QER (“QER 1.1”), published in April 2015, focused on “infrastructure challenges,” namely transmission and distribution and storage (TS&D), as well as natural gas resources.  Parts II-IV will focus on renewable generation, demand response and efficiency, and grid security respectively.

The QER sets forth a strategy to strengthen current infrastructure systems by increasing coordination between federal agencies, federal and local governments, and the public and private sectors.  It covered the power grid, rail infrastructure, barge transportation, processing, and import/export activities.  QER 1.1 also identified the threats, risks, and opportunities for United States energy and climate security, enabling the Federal Government to develop policy goals and clearly articulated actions and proposed investments.

The second Installment of the QER (“QER 1.2”), published in January 2017, builds on QER 1.1, but focuses on the nation’s electric system and its “role as the enabler for accomplishing three key national goals: improving the economy, protecting the environment, and increasing national security.”  It examines and provides recommendations for all aspects of the electricity supply chain from generation to end use.  QER 1.2 is based on the recognition that the nation’s critical infrastructures rely on the electric system, which is a core aspect of the “underlying framework that supports the American economy and society.”

Below are highlights of QER 1.2 with respect to transmission.  Over the next four days, parts II-IV will focus on generation, demand response and energy efficiency, and grid reliability and security respectively.

Highlights for Transmission Companies

QER 1.2 recognizes that complex permitting and planning processes can increase costs and slow transmission development.  It makes a range of recommendations to improve procedures for transmission project development and permitting, and transmission system operations.

Transmission Technology Development and Permitting

The review broadly recommends that the Department of Energy (DOE) evaluate legislative and regulatory options to enable the deployment of cost-effective advanced transmission technologies to increase existing transmission capacity.  In addition to evaluating legal options, QER 1.2 recommends that DOE identify and mitigate barriers to technologies that can increase transmission capacity utilization.  Both of these pursuits will create a framework for future work towards transmission capacity utilization and sophisticated synchrophasor monitoring.

QER 1.2 recommends modification of the current DOE Title XVII loan guarantee program to: (1) reduce restrictions on the number and type of eligible projects and timeframes to increase transmission innovation, and (2) provide clear statutory authority for lending to other public or public-private entities that support transmission and other grid modernization projects through on-lending or equity investing.  The DOE’s loan guarantee program currently provides research and development (“R&D”) funds with long-term repayment periods to help new technologies reach maturity for deployment on the grid.

QER 1.2 recommends that the DOE promote permitting of cross-border transmission facilities.  It suggests expanding the Regulatory and Permitting Information Desktop (RAPID) Toolkit to clarify the applicable Federal and state regulatory requirements.  The QER further suggests modernizing international cross-border transmission permitting processes by creating a pre-application process and updating the current Presidential Permitting rules.

Transmission System Operations 

The latest version of the review recognizes the value that improved Information and Communication Technology (“ICT”) adds to transmission planning and operations.  It encourages cost-effective use of advanced technologies that improve transmission operations for both new and existing transmission.  It recognizes the need for more data and analytics on the extent to which customer-side generation impacts transmission capacity.  QER 1.2 recommends that the Energy Information Administration (“EIA”) substantially improve the quality and amount of data made publically available on the impact that energy efficiency and renewable energy have on transmission system operations.  The DOE anticipates that such public data can significantly improve the government’s policies and programs related to market design and transmission planning.

In Part II tomorrow we will highlight opportunities identified in the QER 1.2 to improve generation development, project financing, access to renewable energy, and the siting process.