Siting Difficulty and Transmission Investment

Efforts to find locations for new energy facilities are often associated with the now familiar term NIMBY (not in my backyard) and even more extreme phrases like BANANA (build absolutely nothing anywhere near anything). These acronyms capture some of the problems associated with siting new power plants and power lines, but the issue as a whole is more complex than these expressions suggest. The term siting difficulty, as used here, is defined as any combination of obstacles to the process of finding locations for new facilities, including public opposition; environmental, topographic, and geographic constraints; interagency coordination problems; and local, state, and federal regulatory barriers to permitting, investment, and/or construction. Given the scope of the constraints affecting new projects, siting difficulty is a broad, complex problem for which solutions are not obvious or well understood. Siting problems are not unique to energy and electricity facilities, but the siting difficulties associated with these projects can be particularly complex, especially in the case of transmission lines. Transmission projects can span states and regions and usually involve highly visible overhead lines regulated by multiple agencies. Moreover, deregulation and the transition to competitive markets have further complicated transmission ownership, financing, and management. Although the United States has one of the most reliable electricity systems in the world, electricity transmission expansion has not matched growing demand. Since the California electricity crisis and the 2003 Northeast blackout, the grid has been the subject of intense scrutiny. A variety of policies and programs have been initiated to boost transmission capacity. One of the most recent examples of these efforts is a mandate in the Energy Policy Act of 2005 to establish federal energy corridors and National Interest Electric Transmission Corridors (NEITC) to streamline siting and permitting of new power lines in critical areas and congested regions across the United States. This process has been highly controversial, however, highlighting three major hurdles facing individual transmission projects: environmental barriers, regulatory roadblocks, and public opposition. Together these elements of siting difficulty have the potential to significantly impact investment in the grid by prolonging project timelines and adding uncertainty to already complex financing processes. Although corridor designations are intended to alleviate regulatory redundancy and to ensure timely permitting and review of new project applications, the process of siting corridors has itself has faced opposition on environmental and equity grounds. This Catch-22 or the conflicting demands exemplified by the corridor siting process, demonstrates the need for better characterizing variations in siting difficulty across states and regions to inform proposals and strategies for improving both transmission and generation investment.