U.S. Rep. Castor unveils Enhancing Electric Grid Resilience Act
As America’s power companies approve new transmission projects and decide who will pay for them, U.S. Rep. Kathy Castor (D-FL) on Nov. 17 sponsored legislation that aims to improve cost allocation via the “beneficiary pays” principle.
The Federal Energy Regulatory Commission (FERC) requires that the costs of transmission be allocated among states according to the “beneficiary pays” principle — meaning that everyone who benefits should pay proportionate to the benefits they receive.
But quantifying such benefits and determining to whom they accrue can be complicated, sources say.
According to Castor, the goal in using the beneficiary pays principle would define benefits broadly to include grid reliability and resilience benefits, as well as savings from access to renewable energy.
“As Congress works to ensure that families have access to electricity in the event of worsening wildfires, floods, droughts, and climate-fueled disasters,” Castor said on Friday, “it’s important that we strengthen our electric grid and produce real savings for Americans.”
Specifically, the congresswoman introduced the Enhancing Electric Grid Resilience Act, H.R. 9326, to amend the Federal Power Act to authorize the allocation of the costs of certain interstate electric power transmission lines and electric power transmission lines that are located offshore, according to the congressional record bill summary.
Castor, who chairs the U.S. House Select Committee on the Climate Crisis, says that the bill could improve the nation’s electric grid, expand access to clean energy, and slash electric bills for Americans by improving cost allocation for priority transmission lines.
“Upgrading the electric grid is a crucial step to enhance resilience and reliability and slash electric bills across the United States,” said Castor. “We need to build new transmission projects that will expand the reach of clean energy and reduce costs for American households, as cheap electricity flows through a less-congested grid and right into their communities.”
“Building more of these transmission lines can also allow electricity to quickly move to where it’s needed, helping keep the lights on in the face of extreme weather,” she added.
If enacted, H.R. 9326 would encourage broad cost allocation for transmission facilities of national significance consistent with the beneficiary pays principle, according to a bill summary provided by the lawmaker’s office.
A transmission facility of national significance is an interstate or offshore wind transmission line that has a transmission capacity of at least 1,000 megawatts (MW), or an upgrade or expansion of an interstate or offshore wind transmission line that increases the transmission capacity by at least 500 MW.
The bill is supported by groups including the American Council on Renewable Energy (ACORE), Americans for a Clean Energy Grid, and Grid Strategies.
ACORE President and CEO Gregory Wetstone called the bill “a significant step” toward expanding the electric grid to improve grid reliability and achieve climate targets.
“While there is broad consensus on the need for high-voltage, interregional lines — to lower costs, avoid outages, and meet our nation’s decarbonization goals — the question of who pays for these new lines has been a key barrier to their construction,” said Wetstone.
The beneficiary pays principle that would be used under H.R. 9326, he said, is “a reasoned approach” that would assign costs roughly commensurate with the anticipated widespread benefits of nationally significant transmission lines.
“We commend Chair Castor for introducing this legislation and encourage the House to move forward with its enactment,” said Wetstone.
At the same time, Christina Hayes, executive director of Americans for a Clean Energy Grid, said the legislation would provide an opportunity to seek cost recovery through well-established processes for both on- and offshore transmission and establish clear guidance on which facilities qualify for the cost allocation framework.
“We believe this bill will support construction of interstate transmission lines needed to ensure all Americans have access to affordable and reliable energy,” added Hayes.
H.R. 9326 has been referred for consideration to the U.S. House Energy and Commerce Committee.
