Larry Gasteiger, executive director of WIRES, an international trade group advocating for transmission development in North America, discusses the broad and systematic difficulties in getting necessary long-distance transmission lines sited and built. He shares his views on ongoing developments before the Federal Energy Regulatory Commission, the U.S. Department of Energy and in Congress that aim to address the many issues that cause transmission line siting to take frustratingly long years to complete - assuming that one of the several states involved doesn't veto the project along the way. This infrastructure must be built if the U.S. is to meet its decarbonization goals for the electric grid, he says. The WIRES official speaks to his view that competitive processes to get transmission built haven't worked thus far, while holding out the prospect that down the road, perhaps after a pilot project irons out the kinks in the process, competitive transmission development could become viable for developing long-distance, multi-state transmission lines. A recent Senate hearing where committee members were overtly hostile to FERC's recent natural gas pipeline policy statement, which addressed climate change considerations under the National Environmental Policy Act, was a "poster child" for the sort of blowback the commission's pending transmission policy statement could run into without near unanimous agreement on the controversial issues, he observed.
Larry Gasteiger, executive director of WIRES, an international trade group advocating for transmission development in North America, discusses the broad and systematic difficulties in getting necessary long-distance transmission lines sited and built. He shares his views on ongoing developments before the Federal Energy Regulatory Commission, the U.S. Department of Energy and in Congress that aim to address the many issues that cause transmission line siting to take frustratingly long years to complete - assuming that one of the several states involved doesn't veto the project along the way. This infrastructure must be built if the U.S. is to meet its decarbonization goals for the electric grid, he says. The WIRES official speaks to his view that competitive processes to get transmission built haven't worked thus far, while holding out the prospect that down the road, perhaps after a pilot project irons out the kinks in the process, competitive transmission development could become viable for developing long-distance, multi-state transmission lines. A recent Senate hearing where committee members were overtly hostile to FERC's recent natural gas pipeline policy statement, which addressed climate change considerations under the National Environmental Policy Act, was a "poster child" for the sort of blowback the commission's pending transmission policy statement could run into without near unanimous agreement on the controversial issues, he observed.
EMP S2EP6, Larry Gasteiger, Wires
Transcript (edited for clarity purposes)
EMP: Welcome to the Energy Markets Podcast. This is Episode 6 of Season 2. Today our guest is Larry Gasteiger. Larry is an attorney and Executive Director of WIRES, an international trade group advocating for transmission development in North America. Larry is also the president of the eponymous Gasteiger Consulting LLC. Larry, welcome.
LG: Thanks, Bryan. Very happy to be here.
EMP: You joined WIRES after an exemplary career in public service, I want to say. First with the Commodity Futures Trading Commission (CFTC) and then, for the bulk of your federal service, with the Federal Energy Regulatory Commission, where we met. We would run out of time if I were to attempt to describe all of the fascinating positions you held at FERC, but your last, I believe, was Chief of Staff for Norman Bay when he was FERC’s chairman?
LG: That's right. Yeah.
EMP: Transmission is big, I hear, right? At FERC and on the Hill?
LG: Transmission is where it's at these days. There's no question about that. And I think it's been building for a while. But certainly in the last, certainly in the last year or two, you've seen a real focus on both the need for and the importance and value of transmission. And I don't think it's going to stop anytime soon, Bryan.
EMP: Yeah. So, we've got a lot of activity both on the Hill and at FERC. So why don't we start there, with the ANOPR, the Advanced Notice of Proposed Rulemaking? Why don't you tell the listeners what that's about, what your what your members care about, and where you think things will go?
LG: Right. Well, this was kicked off earlier last year by the Commission. And I think it's really been driven as the Commission would put it by their interest in seeing that the grid reflects and is built out to accommodate the needs of the future. And frankly, a lot of that is trying to incorporate anticipated needs associated with the changing resource mix that we're seeing on the electric side. The scope of the Advanced Notice of Proposed Rulemaking that FERC put out is incredibly vast. I can't understate how broad the scope is of what they've proposed. It's a pretty lengthy list of questions in a number of different directions. But it covers areas that previously were covered by FERC in other major rulemakings that, in and of their own part, were huge efforts by the Commission just on a standalone basis. And this covers the landscape of them really, from Order 1000, Order 890, Order 2003 going back even further than that. All of the issues that were dealt with in those proceedings seem to be encapsulated and covered in the scope of the ANOPR. What the commission does with it, we're waiting to see with bated breath, where they're going to go. And it doesn't necessarily have to cover that full landscape that they laid out. But just the potential for that could be tremendously impactful for the industry.
EMP: Yeah, we've had Rob Gramlich on the podcast a couple of times and, you know, he's with a group that you're a part of, Americans for a Clean Energy grid. And so we had, is it fair to say a bifurcated approach on the Hill? We got a lot of progress in the infrastructure bill, Rob and I talked about that a couple, a couple of episodes back, and now it seems Manchin is floating some balloons out there and is willing to let something go by in terms of a much pared down Build Back Better bill, but where do you see things going in that direction?
LG: Well, again, it's hard to say. I think, you know, but you talked about it. In terms of a bifurcated effort, I would say it's, it seems like it's almost an effort that is across the board, within the government, the federal government right now. Because I can't recall a time in the past where we saw so much focus on the issue surrounding transmission from the White House, the Secretary of Energy who routinely talks about the importance of transmission.
EMP: She had plenty of experience with that in Michigan, right?
LG: I believe she did. But she certainly has taken up the mantle of being a champion on promoting investment in transmission and getting more transmission done where it's needed. FERC has always obviously had a tremendous voice on transmission issues. And then in conjunction with that, as you already mentioned, it's really gotten traction up on the Hill, and there have been, there have been different congressmen and senators who have focused on this issue in the past, but what we saw in the last year or so was a much more concerted effort to try to focus on issues related to transmission. And that was reflected to a great extent in the infrastructure bill that was passed because you've seen a number of provisions there that were directed towards trying to help facilitate getting more needed transmission infrastructure built. And of course, as you mentioned, there are some other issues still floating around out there that were part of the Build Back Better initiative that we're not sure where that's going to go. But there's still some potential for even more from the Hill in addition to further action from FERC which we are awaiting to see, probably at some point later this year on their ANOPR proceeding.
EMP: Yeah, well, I want to talk about the ANOPR a little bit more, but I don't want to leave this part of the discussion. I want to drill down a little bit into what we saw from the Department of Energy with their Build a Better Grid initiative that was announced a couple of three weeks back and so you know, it addresses what I think is the elephant in the living room, which is siting of transmission lines and it's, it's a difficult process, would you say to successfully site a multistate, long-distance transmission line?
LG: It's one of the toughest challenges that you're going to face with a long-distance, high-voltage transmission line is getting it through the permitting and siting process. There's certainly recognition of that challenge in the infrastructure bill, because there was an effort to try to resolve or provide some further clarification on the previous authority that was out there for backstop siting (authority at FERC), and that was mired down in the aftermath of a Fourth Circuit decision that fairly limited, I'd say, the ability to use that authority or . . .
EMP: You're being a lawyer. They pretty much gutted it. So we haven't had any progress in that area, from my perspective.
LG: Yeah. And so there was some added clarification there. But there are definitely efforts to try to better address the challenges associated with permitting and siting and there are definitely some ideas that have been out there for a while about how to go about doing that. Whether it's making better use of existing rights of way, looking for ways to try to site transmission along existing corridors in a sense, such as highways or along railroad lines, things of that nature, which can help perhaps eliminate some of the challenges associated. But to be fair, those raised some of their own challenges as well. It's never easy, but anything that can help facilitate moving it along and lower some of the obstacles to these permitting and siting issues is going to be welcome in terms of getting that infrastructure done. But frankly, it just seems like with every passing year, it's only getting only getting more difficult.
EMP: Yeah, I was just trying in the back of my head earlier today trying to decide which is more difficult to site a transmission line or to get a hydropower license at FERC. They both take years.
EMP: They're definitely lengthy processes. There are a lot of hurdles and obstacles that you have to go through. And particularly on the transmission side. You know, this is only one of the challenges associated with it. And some of these others are trying to be tackled by the Commission and the ANOPR, but almost, if not just as difficult or maybe more so are issues surrounding who pays for this infrastructure. And it can get, unfortunately, getting a transmission project built can get tripped up in almost any number of ways. And clearing all those hurdles is quite a challenge.
EMP: Well, I think the biggest challenge has been perhaps well, you know, cost allocation is an issue throughout energy and the regulatory process, but it seems the chief impediment is that any one state can veto the project if they decide it's not in their interest and I think that is something that the infrastructure bill is going to help in. Do you think it'll help?
LG: It's possible. I think, you know, we're waiting to see. Interestingly, the vibe I've gotten from speakers at either DOE or even to some extent within FERC is there's a bit of a reluctance to aggressively use any type of backstop siting authority right out of the gate. I think there are good reasons for that. There are potential issues of conflict with the states every time we would try to use that authority. So again, it's understandable they may be a little bit more gun shy, perhaps, about trying to use that authority aggressively right off the bat. But it is a tool, absolutely, a tool in the toolbox. So in that sense, I think it is there, if needed, and could certainly be useful in some circumstances where projects get mired or stuck and can’t move forward. So there definitely is the possibility of that now.
EMP: Let's pivot back to the ANOPR. So you, you said that it's very wide ranging and I think I heard someone say that, I guess it was Phil, on our last episode said that, you know, they threw a lot of stuff in there and he doesn't expect the bulk of it to survive to the end point. So what issues do you see as the survivors in a Notice of Proposed Rulemaking?
LG: Well, it's that's a great question. I think if you look at the ANOPR itself, it is extremely lengthy and it's a huge list of questions. And frankly, even some of the questions seem to be contradictory or conflicting. My best guess is that's a reflection of the fact that as the ANOPR was being put together in an effort to build support amongst all the other Commissioners, they solicited input from all of them as they absolutely should do. And the instances where you see some potential contradictions, I guess, in the questions or even sometimes repetitions of the questions, is a reflection of that, and I think it's for the contradictions, it's an indication of potential disagreement and whatever they finally do, right? So . . .
EMP: Do you want to connect the dots for us there? Where do they disagree?
LG: I think Well, again, cost allocation is one of the most difficult issues and part of the challenge there, you talked about earlier, is determining who benefits, and how you define the scope of benefits. I think there are going to be some real challenges in terms of how broadly you might want to define benefits. A broad definition of benefits would potentially allow for greater spreading of costs. But the more you broaden it, and the more attenuated those benefits seem the more likely you're going to get pushback from states and customers saying, wait a minute. We shouldn't be paying for that because we don't see those as benefits. Right. So I think you're going to see some real tension there. You already are, I think, in just some of the discussions leading up to whatever action the commission takes. So that's one example where I think that that could wind up being a real challenge for the commission.
EMP: If I could interject before you go to your next point. So we're clearly not going to see postage stamp rates out of this.
LG: Well, again, I don't know. It's going to depend on a number of things. How much unanimity they're looking for from the Commission? What issues are they willing to just go with three votes, if they have three votes, as opposed to four or, or preferably all five. I don't have a feel for how, how willing the chairman or the commission is to push the envelope on those types of issues. So we'll see. I mean, there's going to be -- there are a lot of variables as you well know, having worked at FERC, that go into the process on how an order gets done and how it goes out. One of the things I've emphasized and I think from wires perspective, we've emphasized is that the goal should be trying to get the Commission as close to unanimous, if not unanimous, as unanimous as they can get on a rule of such tremendous importance. And there are good reasons for that. It provides greater certainty to the industry. If you have a bipartisan, full commission supporting some type of a policy determination and it provides more resiliency, I'd say, to the order. I think to the extent that there could be legal challenges, often a unanimous order reflects to some extent a greater likelihood of survivability on appeal. So all of those types of factors play into it. The more you get away from that, all of those variables and those risk factors start to change.
EMP: So was that the point you were going to get to and I interrupted you?
LG: So I was talking about the areas where I thought there were some potential disagreement. In terms of areas where you can see some agreement, I thought with the ANOPR, if you looked at it, the portions dealing with interconnection seem to have been a little bit more fleshed out perhaps than some of the other portions of the ANOPR, and that just to me read like there was a little bit more of a sense of where the commission might ultimately wind up going on that. Again, whether they're all in lockstep on it or not, I'm not sure that that's the case. But that piece of it just had a little bit of a different vibe to it in terms of sense of direction or thinking from the Commission about what direction they might want to try and go. So that piece will be interesting to see as well. And whether they, you know, there are a lot of ways you can approach a rulemaking like this. They don't have to do one big rulemaking. They could do a couple of smaller ones. And I know that's something that's under consideration. And that would give them some flexibility perhaps to move forward on portions where there may be some greater clarity among the Commissioners some more uniformity among the Commissioners and leave the other parts for development later on. It's not clear to me exactly whether they're going to do that one big thing approach or a couple of smaller rulemakings approach.
EMP: Phil, in our last episode, was of the opinion that they'd break it up in parts and from my perspective, walking into FERC and having all the SMD (Standard Market Design) blow back under Pat would suggest that that would be the better way to go rather than put out a big order that gores a bunch of boxes and you've got the Hill all over you as well as the industry. And not to mention the lawsuits and the challenges you'd have. Which brings to mind the experience we saw this morning on the Hill, in another policy big policy decision at FERC. made regarding natural gas pipeline development. And, Larry, you watched the hearing, I guess the FERC, Rich Glick and the Commissioners, were in the hot seat this morning?
LG: I did watch the hearing earlier today. It was focused on the recent policy statements that the Commission -- and one's an interim policy statement that the commission put out at the last meeting on the gas pipeline certificate policy -- which I'm not as familiar with the details of all of that. But I thought the hearing was pretty remarkable just in terms of the tone of the hearing and I’d sort of say the heated level of questioning of the commissioners. Of course, those policy statements were 3-2, they were partisan, along partisan lines. And in my mind, that situation lends itself to the type of scrutiny and questioning and concerns, I guess, that we heard raised today during the hearing. It was actually pretty remarkable. I can't -- it's hard to think of the last time I've heard anything quite like that hearing today, just in terms of the tone and the aggressiveness of the questioning of a good number of the senators.
EMP: We’d probably go back to Standard Market Design and before that, probably California.
LG: I think that's probably right.
EMP: Definitely Enron, That thing got blown up pretty big too. Well, I mean, it is, I guess, a cautionary tale for Rich Glick and the commissioners as they move forward, that they could run into the same kind of blowback depending on how aggressive they get?
LG: Yeah. And in a way it's almost a poster child of what some of the risks are of when the Commission takes action on, as I said, a 3-2 purely partisan basis. I'm not saying that you're always going to have this level of pushback, I guess from the hill, but this was an example of where you certainly can't have that situation in those types of instances. And I think that's, that's why -- and I'm not suggesting that the current Commission isn't aware of that by any stretch of the imagination. I think there's a general desire to get get to five votes on everything and you're obviously not going to have that all the time. But I do think on major rulemakings, if you look back at the history of the major significant rulemaking is a commission has done over the last two to three decades, they are almost without exception, if not unanimous, pretty close. And there's a good reason for that. Because you don't want to have the type of situation like you had with the policy statements on the gas certificate side, and some of the debates that are going on right now about that. But if you look at 888, Order 2003, 890 -- even Order 1000 was mostly unanimous except for a small number of issues where -- and frankly even on that, those issues are the ones that are still problematic today from Order 1000.And that was 10 years ago, right? So I get the desire to want to accomplish things and to get things done and I get the notion that you cannot hold off taking action simply because you're not entirely unanimous, but at the same time, the more you get away from unanimity. The more problematic it winds up being the more susceptible it is to legal challenges all of those types of risks. I think even from the industry perspective, everyone would like to see avoided.
EMP: Well, let's talk about some transmission siting horror stories, shall we? What are some that spring to mind among your membership that we could draw inference from or make an example of?
LG: Well, I think, and somebody else made this comment to me recently, the newest poster child for how difficult it is to get transmission build is the NECEC project up in Maine. That was one that I think shows how frustratingly difficult it can be to get needed infrastructure built. That was a project in Maine that is intended to move power from Canada down further into the New England states. It's primarily if not exclusively, hydro power, which is, you know, generally regarded as a clean energy resource, noncarbon-emitting, certainly, and can help facilitate meeting state clean energy goals within the region. The project would have or would bring jobs to a region that definitely needs it up in upstate Maine and made it through all of the regulatory hurdles and approvals for getting done was actually in the process of being constructed. But then a state referendum initiative was used in Maine to halt the development of the project. And that's where we're at right now. And there are ongoing legal challenges to this day to try to sort out the mess that's been left in the aftermath of that. So, you know, as hard as it can be to get all of those legal hurdles clear to get all the permits and everything licensed in order to do it. Your referendum process within the state seems to have put that project completely on hold and stuck in its tracks.
EMP: Yeah,I can imagine that's frustrating for Avangrid and others involved. And it's not the first time that Massachusetts has been stymied. Before this, there was Northern Pass in New Hampshire and the state commission there declined to approve it. And that's when this project through Maine came about.
LG: There've been other instances too. There was a project that was supposed to go through the state of Pennsylvania into Maryland, I believe, and it started out further out in the Midwest. Pennsylvania did not allow the project to go forward through its state. So that one helped stop that project in its tracks. But that's the, you know, one state being able to kind of kill the project. But it goes back to that underlying issue that we talked about before, of making sure that people either perceive or understand or accept the notion of what the benefits are of a project or not. And I think that was very largely at the root of the challenge there. So you know, you've got instances in different places where, where it's been frustrating not being able to get truck transmission projects moving forward.
EMP: You know, I think for me, prior to the experience in New England we just talked about, was Clean Line’s (Grain Belt) Express tried for 10 years, I guess they're still trying to put a transmission line to bring wind power from the plains states eastward, and I think it was Missouri that wouldn't let them pass through and are you familiar with that one?
LG: Yes, I am somewhat. And, you know, again, it's a bit of the same story in terms of just how many hurdles you have to clear in order to get that done and that one I believe, is a merchant project though, and as some of its own challenges associated with it. But there's a lot of pieces that need to be aligned, not just even the permitting and siting, in some instances, in order for the project to move forward. That's why I say it's so tremendously challenging to get transmission built.
EMP: So let's talk about CREZ in Texas, the C-R-E-Z process that put up all these transmission lines that have allowed Texas to jump to the front of the country in terms of (being) a wind energy producer. What's different there, compared to what we're seeing elsewhere?
LG: I think one of the biggest differences is that you're talking about it within one state and I think as a result the, for lack of a better phrase, that sort of build-it-and-they-will-come kind of approach maybe works better there. There was -- I think that's been held up as a model for trying to do processes that make it work. The MISO multi-value project process, similarly has been pointed to. And I think one of the -- that is not just one state, obviously, that's a number of states that came together. But the key there was being able to, for all the projects that were included, demonstrate a very credible level of benefits to everybody involved. So, in other words, everybody got something out of that, right. So you had more broad buy-in in order to make that happen. I think those are two examples of where I think it worked. Again, when you have situations where it's all happening within one state, I think people view that as it removes that obstacle we talked about of having to get buy-in from other states in order for it to happen. So if you can make it work within a state, but that's, you know, Texas or California or New York. There just aren't some of the same challenges you have in other regions where you've got to get a number of states together in order to make it happen.
EMP: Well, you mentioned the Clean Line project being a merchant project. Let's talk about merchant project developers versus utility developers. Now, your membership is primarily utility affiliated?
LG: It's mostly utilities. We have some cooperatives and we do have one competitive transmission developer, the arm of that for Con Ed.
EMP: So in season one last year, our guests gave differing opinions about whether or not you know both power transmission line development, the business your members are in, should be open to competitive development going forward. You know, for example, Nora Brownell, she described it as a natural monopoly. And but former FERC Chairman Jon Wellinghoff and Devin Hartman at the libertarian-leaning R street Institute expressed the view that we should introduce competition into the transmission line development. You know, and Phil Moeller of EEI,said on our last episode that competition and transmission development hasn't worked. Rob Gramlich of Americans for clean energy grid said pretty much the same thing. So what data do we have showing competitive transmission development is problematic? What are some examples?
LG: Well, so just stepping back for a minute. I mean, that effort really, I'd say got off the ground with order 1000.
EMP: What effort it is that, Larry?
LG: The effort to inject competition into the transmission business. And generally speaking, for the last couple of decades, you've been seeing this ongoing trend towards using competition as a tool to obtain or achieve regulatory goals. And I think there are plenty of success stories where that has worked. Right? So to me, it's understandable that you continue to try to think to apply that model competition to other areas where it hasn't previously been used. And I think that's part of the goal, and the desire, thinking that it may wind up reducing costs for getting transmission built and things of that nature. As a practical matter, I think what we've seen from Order 1000 is a mixed bag at best in terms of how competition’s worked. And whether that's because transmission itself and the transmission industry is structurally different in a way that doesn't make competition work, you know, it's like, as you said, I guess you said it was Nora, who said it was a natural monopoly. And I know Rob has talked about the economies of scale and things like that, that play into transmission, and I think those are all absolutely valid. Or whether it's structural within the industry, or whether it's just simply by implementation, it hasn't been working. I don't think it's been working. And I think even proponents of competition would say this isn't really been working even, the way they had envisioned. And you say for examples I think part of the maybe some of the biggest examples are just simply what's not getting done. They're just not getting built. And I think part of it is there's a lot more process around how they're trying to work it in now. There's more -- I don't know if it's actual court litigation as opposed to litigation within the stakeholder processes within the RTO and FERC processes surrounding competition on projects -- it's not happening. We're not getting infrastructure built as a result. So some are saying, and I understand this too, if it winds up coming down to a question of, on the one hand, do we want to get more infrastructure built, and the processes right now and how it's all playing out are precluding that? Or do we want to just keep pushing forward with the hope that competition will eventually work, or we can change it in a way to make it work. If you've got those -- if those are kind of on two different hands, and you have to wind up choosing one or the other, I think you got to give some real thought to we need this infrastructure built for a lot of reasons. And we need to, if anything, sacrifice one in order to get the other done. So I think you're starting to see a little bit of a question and a couple of instances where things have moved forward. Where there are questions surrounding, under the competitive processes, are the ways that costs are allowed to be excluded in that situation when there are cost overruns, even on a competitive project, there are all kinds of questions around that. I don't know that there have been any necessarily questions around quality associated with it -- the construction that's been built as a result of competition. But I think there's some real concerns about from this type of infrastructure, do we want to necessarily go with the cheapest way we can build it, for lack of a better way of putting it? We have serious reliability questions, and serious reliability needs associated with its infrastructure that we really can't take risks on. So we got to make sure we get it built right. So all of those things. I mean, I've talked about a lot of different stuff, but all those things factor into it. I just think it is a far more complicated question, maybe than people anticipated. And maybe then we can work through just easily in terms of how would competition work in transmission?
EMP: Well, maybe we should go full bore the other way and have the federal government build the wires. I think that's one thing that people have advocated, haven't they?
LG: I haven't heard a whole lot of that. I guess it says certainly something to think about. We certainly haven't done that, for instance, like on the on the pipeline side. And I don't know how that would work to be honest. It would profoundly upset the method we've used to get infrastructure built for the last century. And whether you want to turn all of that over from the people who've gotten us to where we're at now to the federal government and say you go forward and make sure this all happens, that's putting a lot of faith in the ability of the federal government to make it work.
EMP: I think it'd be problematic too, because most of the transmission lines would be going through areas where Donald Trump has a very strong political base.
LG: Yeah. And I think too, I'm not sure the federal government really wants to. There's a big question as to whether they can or should. I'm not sure. I’m not hearing from the federal government that there's any interest in that end on taking that kind of responsibility over either. I mean, we can get the infrastructure built that we need with the current setup, but it's going to take a lot of work to make it happen. And there are things that can be done that can actually start facilitating that now that just simply are not being done. And those are some areas I think we need to focus on.
EMP: Well, before we leave the area of merchant versus utility development. There's one issue in the ANOPR at FERC that touches on that area and that's the, what's given the acronym ROFR, or right of first refusal. And given your membership’s makeup I'm assuming that they’re supporters of ROFR.
LG: Yeah, mostly. I mean, some I would say, not necessarily. And even there it, you know, I think there are a lot of ways you can approach this to, you know, even on competition. Maybe there's a set of transmission that actually is appropriate for competition. Maybe it's longer distance, higher voltage lines that cross, you know, several states. The sort of project that might be bringing wind power from the Midwest or the Upper Plains states, and then out either to the West Coast or all the way over to the East Coast. You know, maybe there's a set of projects where that type of, of a process might be appropriate and, you know, maybe you could even set up some kind of almost like a pilot project or an effort. And if that works, take the lessons learned from that type of an approach and then see what you can do with it. But, right now I don't think it's working and I don't think moving in competition down to a really much more granular level when it's not particularly working now very well is the way to go. I'm not sure why we would want to raise those kinds of risks with a system that is so important to everything that gets done in this country today. I think maybe the better approach might be look at it from a much bigger perspective. See if you can't get it down right there. And then learn from the lessons of that and figure out where we can go from there.
EMP: Well, I think one of the most compelling reasons to build the kind of macro grid that your membership and Americans for a Clean Energy Grid would like to see built is the climate change emergency. And when I first heard it called a climate change emergency, I kind of scoffed, but then I thought, well, no, actually, that's pretty accurate. I mean, we've got a hair-on-fire emergency going on right now. And do you think that building this kind of a macro grid will help us in terms of getting to a zero-carbon grid?
LG: I don't think that without significant build out of transmission you can get there. Okay. So I think you it's, I think it's absolutely necessary. And I actually think over the last couple years, I know WIRES has been beating this drum way before I got involved with the organization. And we have continued to do that. So have other groups, as you say, like ACEG, and I think more groups are either there or coming around to it than there ever have ever been before. That In other words, in order to meet, whether it's net-zero goals or other, you know, clean energy goals that are being set at the state level, even with an individual company, customers are demanding it and utilities are moving in that direction. So I think there's a pretty strong movement, all towards that type of greater clean energy needs and more transmission in order to get there as the solution perspective. So I don't see how we can do it without it. And frankly, Bryan, there's other things to it too. You know, that that build out of the grid that that's strengthening of our electric transmission infrastructure has benefits beyond just meeting clean energy goals. I mean, there are some real serious resilience challenges that this country's facing as well. And you get those benefits covered as well from the build out of the grid. Now, there may not be completely overlapping mean there could still be other resilience needs that aren't met by transmission that's built to help accomplish clean energy goals. But it certainly helps. And it provides for a much stronger grid. And that's not going to change either. You know, whether it's wildfires out in California, or hurricanes in the Gulf Coast region or on the Eastern Seaboard, whether it's, you know, winter weather, extreme winter weather in New England and parts of the Midwest and even deeper than that.
EMP: Well, Larry, you're citing all things that the scientists say are going to be -- are being -- exacerbated by climate change. All of those things you mentioned are being fueled, becoming more violent, because of all the heat trapped in the atmosphere.
LG: Yup, there's that but there's other stuff too. We have. We have physical and cybersecurity challenges associated with the system. And that's not I wouldn't attribute that to climate change, but a more robust grid is going to be more resilient to either withstanding or recovering from issues like that, too. So it's more than that. Plus, frankly, a lot of our infrastructure is getting quite old at this point. I worked for utility for a short while. on the East Coast, and they have transmission infrastructure, some of which is approaching 100 years old. Okay. We've gotten our money's worth out of that. And yeah, you can maintain it to a certain point. But when you’re kind of getting down to the question of, we know we're going to have to replace this do we? We need a couple more years and keep it going with some paint, or do we just break down and go ahead and replace it now because we know we're going to have to replace it. Those are the kinds of questions utilities are dealing with all the time. And, you know, nobody wants to be in a situation where they've got infrastructure that's in their footprint that they're responsible for something catastrophic happens to and then they're going to face the question why didn't you deal with this earlier?
EMP: Well, I wouldn't want to be in your shoes there, Larry, not for -- well, I don't know, maybe for what you're getting paid. I don't know what that is, but I really appreciate your coming on today. I've kind of exhausted my list of things here and I just wanted to throw it back to you one last time if there's something we haven’t addressed that you think is important to bring up for the good of the order.
LG: No, I think we've covered a lot of a lot of territory. I appreciate the opportunity to come in and talk through some of these issues with you. There are some as we've discussed some mind bogglingly complex challenges associated with transmission. But you know, I think we're making progress. Not always as fast as we would like by any stretch of the imagination, but generally going forward in the right direction. I will say there are a couple of things I mentioned earlier, though, that I thought are policies that we can really focus on today. And I want to circle back to one or two at first that are still pending out there that I think could be really impactful on transmission, particularly to the extent that it's being driven by private capital investment as the main source for getting it done. Those are issues with things like how do they determine the rate of return that utilities are supposed to get on their investment? There's legislation out there for incentives to push getting investment made in transmission in areas where, for whatever reason, the transmission isn't being built. Those are critically important tools that FERC has right now that aren’t being used to their maximum effect. The Commission's ROE policy has been in flux, I would say, for years. There's a real lack of certainty for utilities. That's never good for getting a lot of investment made in an area that's going to be needed.
EMP: Taking away the ROE adder for RTOs, that was a that was a big one, right?
LG: As I described it before, I think I'm on record as saying it was profoundly disappointing, I thought, for a number of reasons. I think, you know, for companies that went into RTOS while that was out there and factored that into their decision making, to pull the rug out from under them on that now is extremely unfair, to say the least. I think to the extent RTOS, I think, are significant and critically important to getting some of this infrastructure built and to the extent that you think that RTOS can help facilitate getting infrastructure built to the extent that you think RTOS are important for markets for all of those types of reasons, frankly, the commission should be doing everything it can to encourage companies to get into RTOS if they think RTOS are the solution to those problems, and I think they do. So taking away the RTO incentive adder, in my mind, is completely at odds with the notion of thinking that RTOS are important, that RTOS are where they want broader membership and more members in them, and they want them to stay in it. It's just completely inexplicable to me why the commission would use that policy under those circumstances. So I just I think it's completely wrongheaded. Again, I would think the commission would want RTOS to be a club that everyone is clamoring to join.
EMP: Clearly, that’s not the case.
LG: That sends exactly the wrong message. So I don't for the life of me understand it, but there are, as I said, there are steps the Commission can take I think right now that could help facilitate facilitating getting more transmission built and they haven't taken those steps yet.
EMP: Well, it's all going to be interesting to watch unfold going forward. Larry, thanks so much for your time today.
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