On Wednesday, the Senate Committee on Energy and Natural Resources (“Senate Energy Committee”) voted for an amendment to Sen. Jeff Bingaman’s (D-NM) transmission bill (see May 8, 2009 edition of the WER) that will limit broad cost allocations for “national interest” power lines in a given region. The amendment, proposed by Sen. Bob Corker (R-TN), could create new financial hurdles for developers proposing large new power line projects.
Previously, Sen. Bingaman’s transmission bill allowed the Federal Energy Regulatory Commission (“FERC” or “Commission”) to allocate costs to either a region or subregion unless the costs are “disproportionate to reasonably anticipated benefits.” Sen. Corker’s amendment will only allow such allocations if FERC can show “the costs are reasonably proportionate to measurable economic and reliability benefits.”
The thirteen senators who voted for Senator Coker’s amendment believe that it offers a fair approach to dealing with cost allocation issues for large, multi-state projects. Additionally, supporters of the amendment were concerned that some customers may have to pay for transmission lines that would only deliver power to another region or state.
Meanwhile, the nine senators who voted against Sen. Coker’s amendment worry that the language would tie up the Commission with large and complex cost-benefit analyses. Additionally, opponents of the amendment now worry that Senator Bingaman’s transmission bill will no longer encourage region-wide transmission projects needed to deliver green power.
Other Provisions Largely Unaffected
While thirteen other amendments were approved on Wednesday, most of the other key parts of Sen. Bingaman’s transmission bill remained the same. Specifically, two amendments to strip the Commission of some of its eminent domain authority were defeated on Wednesday and an amendment requiring increased siting to take place on public lands to the maximum extent practicable was defeated on Thursday. Other amendments, including an amendment to limit interconnections to the grid to only low-carbon generation, were withdrawn and might be proposed later on the Senate floor.
Moving forward, Sen. Bingaman plans on combining his transmission bill into a broader energy bill that he hopes to finish by the Memorial Day recess. Previously, the Senate Energy Committee has posted Sen. Bingaman’s transmission bill on its website at http://energy.senate.gov/public/index.cfm?FuseAction=EnergyBill.2009. However, as of press time, a new version of the bill including the new amendments had not been posted.