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Dear Chairman Manchin, Ranking Member Barrasso and members of the Committee:

WIRES submits the following statement regarding S. 4753, the Energy Permitting Reform Act of 2024.

WIRES supports the Committee’s efforts to design bipartisan legislation aimed at streamlining and accelerating the federal permitting and siting process to help expedite the expansion and upgrade of the U.S. electric transmission grid. Building the grid of the future is critical to support the national economy and serve customers reliably and cost-effectively. As this legislation progresses, WIRES urges Congress to ensure that any reforms will complement, and not weaken, existing regional and local planning processes. WIRES stands ready and willing to work with members of the House and Senate Committees and Congress on finalizing a bill that will help ensure transmission is timely built.

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“WIRES shares FERC’s objective of ensuring that rules are in place to facilitate investment in transmission infrastructure required to meet the nation’s well-documented needs. Building the grid of the future must be a bipartisan effort driving towards a common goal – a safe, reliable, and affordable grid.

While WIRES is still reviewing and evaluating the details of Order 1920, we are pleased that FERC has declined to adopt the NOPR proposal to limit the availability of the CWIP Incentive. We agree with FERC that action on incentives should be done in a holistic manner; otherwise, we risk sending the wrong signals to the investment community at precisely the wrong time.

WIRES commends FERC’s decision to take a first step to expand federal ROFR rights to include right-sized replacement transmission facilities selected to meet Long-Term Transmission Needs and urges the Commission to continue to consider other potential federal ROFR issues that could facilitate collaboration and more efficient and cost-effective transmission for the benefit of consumers. WIRES looks forward to continuing to work with the Commission to advance constructive policies that ensure adequate investment in transmission infrastructure so that the grid continues to serve customers safely, reliably, and affordably.”

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Larry Gasteiger, Executive Director, WIRES
“In its important new analysis of nearly 30 projects, Grid Strategies makes a compelling case that effective collaboration is necessary for efficient transmission expansion,” said Larry Gasteiger, Executive Director of WIRES. “WIRES has long maintained that FERC Order 1000’s competition provisions have introduced barriers to productive collaboration and have hindered transmission planning and development. We encourage policymakers to consider Grid Strategies’ careful assessment and to remove barriers to collaboration to pave the way for needed and beneficial transmission investments that can achieve ambitious clean energy goals while maintaining system reliability and bolstering resilience.”

Rob Gramlich, President, Grid Strategies
“Getting transmission built is so difficult and so urgently needed, we really need to be practical and look at what has worked in the past,” said Rob Gramlich, President, Grid Strategies. “We find that collaboration between transmission owners, regional grid planners, and others has been a critical element of successful transmission expansion. In fact, we found that delays caused by limiting collaboration can be costly for rate payers, amounting in one region to more than $1 billion dollars. Policy makers should review these experiences and foster such collaboration going forward.”

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Comments from Larry Gasteiger, Executive Director of WIRES

“As the Commission recognized in the Incentives NOPR, there are numerous drivers underlying the need for new transmission infrastructure, including the evolving resource mix, an increasing number of new resources seeking transmission service, shifts in load patterns, implementation of reformed transmission planning processes, and new challenges to maintaining the reliability of transmission infrastructure. Investment in transmission needs to be encouraged to not only address these issues, but to also offer the US economy much needed economic stimulus and job expansion.

WIRES supports FERC’s proposed changes to its incentives policy and recommends certain modifications. In particular, the final rule should include FERC’s proposed RTO Participation Incentive and Transmission Technology Incentive adders. There are numerous benefits that flow through to consumers via the RTO/ISO model, most importantly access to large competitive markets that lower power costs and improve reliability. However, participation in RTOs and ISOs, introduce numerous risks and complexities for transmission operators as they cede control and manage myriad requirements and complexities. Similarly, consumers benefit from the widespread adoption of advanced transmission technologies through reduced costs and improved productivity and quality of electric service. The risks transmission operators are exposed to in the deployment of advanced technologies weigh in favor of a higher rate of return in the form of an ROE adder.

Investment in transmission is a long-term proposition, and investors require certainty that they will recover their investment and earn a reasonable return. The unstable economic climate and uncertain regulatory environment, difficulties with siting and permitting, long-lead times for construction of transmission infrastructure, and long depreciable life of transmission assets necessitate policies from FERC that clearly and unambiguously incentivize investment in transmission above and beyond normal ratemaking processes.

In a new whitepaper, London Economics International offers additional evidence that supports these two incentives adders, concluding ‘Ultimately the additional compensation offered through these two incentives should stimulate transmission investment and attract diverse capital to the sector, and facilitate the deployment of transmission projects that advance technological innovation.’”

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“A sound policy for determining base rates of return on equity is fundamental to encouraging adequate investment in needed transmission infrastructure. WIRES joins with EEI on this joint motion asking FERC to take quick action in its Notice of Inquiry proceeding to make needed re-visions to its base ROE methodology,” said Larry Gasteiger, Executive Director of WIRES.

“There is a renewed urgency for more guidance and clarity around FERC’s ROE policy to provide regulatory certainty and stable ROEs into the future. More than ever, WIRES believes in-vestment in transmission needs to be encouraged. The COVID-19 pandemic has devastated the economy and decisive action is needed to stimulate a sustained, robust and vigorous economic recovery. The pandemic has highlighted the benefits of cleaner air and the importance of a clean energy future. New and upgraded transmission infrastructure is necessary to integrate more renewable generation, as well as to enhance grid resiliency, and must be part of any planned economic recovery. FERC has a key role in fostering a positive environment for transmission. The Commission must quickly focus on establishing a base ROE methodology that will provide regulatory certainty, spur much needed transmission investment and produce just and reasonable results.”

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“Although FERC has not issued a generic rule for public utility base return on equity (“ROE”) in the NOI proceeding, the Commission has made substantive changes to its base ROE methodology in other case-specific proceedings. WIRES believes those case specific determinations, while offering steps in the right direction, do not fully resolve the need for regulatory certainty and stable ROEs into the future. WIRES encourages FERC to take further action to address those issues.

WIRES believes investment in transmission needs to be encouraged now more than ever. The COVID-19 pandemic has devastated the economy and decisive action is needed to stimulate a sustained, robust and vigorous economic recovery. The pandemic has highlighted the benefits of cleaner air and the importance of a clean energy future. New and upgraded transmission infrastructure is necessary to integrate more renewable generation, as well as to enhance grid resiliency, and must be part of any planned economic recovery. FERC has a key role in fostering a positive environment for transmission. The Commission must focus on establishing an ROE methodology that will provide regulatory certainty, spur much needed transmission investment and produce just and reasonable results.”

Larry Gasteiger, Executive Director
WIRES

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“It is the responsibility of the WIRES organization and the members we represent to promote investment in the North American electric transmission system, to facilitate cost-effective transmission solutions that address environmental and reliability challenges, and to reduce barriers to transmission development. We encourage the FERC to carefully examine the requests for rehearing in this important case and consider the impacts of its actions on building transmission where it is needed and the signals FERC intends to send to those considering transmission investment.

As FERC itself has acknowledged, there is a need for significant transmission investment to address the evolving energy needs and focus on resilience. To accomplish this, it’s important for transmission owners and operators to earn a reasonable and stable return on equity in order to have efficient and cost-effective access to capital.”

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“WIRES believes that sustained investment in a more robust and integrated transmission grid is critical to support an increasingly electrified regional and national economy. FERC has a key role in creating a positive investment climate for transmission, which has to be resilient, capable of integrating diverse low-cost energy resources and advanced technology, and able to serve consumers and industry that have rapidly changing demands for electricity. Our comments support a stronger response by regulators to those needs.”

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