Research | Policy Briefs

Building Integrated Grids
With Inter-Regional Energy Supply
(BIG WIRES) Act

In May 2023, Senator John Hickenlooper (D-CO) and Representative Scott Peters released the details of their forthcoming Building Integrated Grids With Inter-Regional Energy Supply (BIG WIRES) Act to improve the regional transmission planning process.

What would the BIG WIRES Act do?

  • The BIG WIRES Act would direct FERC to require regions to improve regional transmission planning by:

    • Establishing a minimum transfer capability (MTC) of 30%, so that all regions of the country could transfer at least 30% of their peak electricity to other regions

    • Requiring regions to submit plans on which entities will implement and pay for upgrades within 2 years after an 18-month rulemaking period

    • Empower FERC to implement the MTC in regions that fail to meet the deadline

  • Grid upgrades that satisfy the 30% MTC requirement can include:

    • New interregional lines or upgrades to existing interregional lines

    • New or upgraded non-interregional transmission lines that increase the grid’s ability to move power between regions

    • Grid-enhancing technologies that improve system operations

    • Upgrades that lower peak demand (i.e. energy efficiency, demand response)

Why is it important?

  • It builds resilience:

    • MTC builds resilience against extreme weather events, like Winter Storm Uri in 2021, which left millions of homes and businesses in Texas without power. A 30% MTC would allow regional grids to export and import power, thereby preventing rolling blackouts and outages in future extreme events.

  • It pays for itself:

    • Implementation of the BIG WIRES Act requires no monetary investment by the federal government, as utilities and other transmission developers are responsible for new transmission buildout. The upfront cost for these entities is offset by efficiency gains during periods of both normal and peak demand.

      • Specifically, greater transmission capacity improves the probability that low-cost generation reaches load centers and reduces the need for grid operators to dispatch higher cost generation.

      • Furthermore, interregional transmission mitigates outages by facilitating power imports from regions experiencing lower demand to those experiencing peak demand. (Without sufficient transfer capability, power in low demand regions is, in some cases, wasted through curtailment.)

  • It benefits ratepayers, states, utilities, and public utilities commissions (PUCs).

    • Customers: According to 2023 ACORE study, “a one GW transmission line between the Electric Reliability Council of Texas (ERCOT) and Tennessee Valley Authority (TVA) would have provided nearly $95 million in value, mostly to TVA customers. That adds to the nearly $1 billion in value that line, flowing in the other direction, would have provided Texans suffering through outages during Winter Storm Uri in February 2021.”

    • States: In June 2023, 8 states petitioned the US DOE for help with interregional transmission in coordination with regional grid operators, highlighting the importance of coordinated planning to improve power system reliability. In their letter to DOE, representatives noted that “Rather than wait for new regulatory mandates to spur action, we can collectively take steps now to consider expanding ties between our regions to help enhance system reliability and transition to a clean energy future more quickly and affordably.”

    • Utilities: Current regional planning relies heavily on “base case” projections, which do not adequately value the role of transmission investments in mitigating extreme events that strain the power grid. Incorporating transmission investment into regional planning can help utilities avoid high economic costs associated with extreme events by planning for them upfront.

    • PUCs: In a response to FERC’s 2021 Advance Notice of Proposed Rulemaking on reforms to regional transmission planning, cost allocation, and interconnection processes, the NJ Board of Public Utilities acknowledged the deficits of current planning practices, noting that “interregional planning, particularly across the PJM/New York seam, is effectively non-existent, constantly mired in litigation based on outdated Commission rules and cost allocation processes.”

What is the bigger picture?

The BIG WIRES Act fits into broader legislative and regulatory efforts to streamline energy project permitting and transmission development, including the following:

Fiscal Responsibility Act of 2023 (FRA) [debt ceiling agreement]

  • Parts of the BIG WIRES Act were proposed to be incorporated into the Fiscal Responsibility Act of 2023 but only one key provision—a directive for NERC to study electricity transfer capabilities between regional grids—ultimately made it into the bill.

  • However, FRA Division C, Title III complements the BIG WIRES Act by:

    • Requiring relevant agencies involved in energy projects to designate a “lead agency” to submit a single EIS or EA

    • Setting 1- and 2-year timelines for EA and EIS submissions, respectively

    • Expanding the number of projects eligible for EA and EIS exclusions

    • Directing CEQ to explore the potential of an electronic portal to resolve delays and improve transparency

    • Expanding the Fixing America’s Surface Transportation (FAST) Act—which accelerates permitting for infrastructure projects—to include energy storage

FERC NOPR “Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection” April 2022

  • The NOPR—expected to result in a final ruling by the end of 2023—requires transmission providers to map out 20-year plans for large transmission projects and coordinate that planning with state governments and utilities.

FERC Discussion Around MTC:

  • In late 2022, FERC held a workshop on improving grid reliability. Stakeholders acknowledged the importance of MTC, and Sen. Hickenlooper and Rep. Peters recently sent a letter to FERC supporting a final rule establishing an MTC. 

FERC Approval of PJM Interconnection Process Reforms:

  • In late 2022, FERC accepted a proposal allowing PJM to streamline its review process by approving projects on a clustered—rather than a one-off—basis.