When the power goes out, it shuts down the economy and potentially costs lives. And while we can’t control the weather, better-planned transmission lines can help ensure that power outages happen less frequently and are less costly when they do occur.
What we need is a buildout of regional transmission lines across our state and throughout the country, akin to building new interstate highways.
That’s why I’m hopeful that a new rule – expected in May from the U.S. Federal Energy Regulatory Commission (FERC) – that will require our neighboring states to work together to plan for, and build, new power lines that provide long-term benefits.
This final rule is long overdue. More than three years ago, a bipartisan group of nine former FERC Chairs called on the agency to finalize new regional transmission-planning rules.
The FERC rule provides much-needed guidance at the federal level. But crucial regional planning efforts will not move forward without a proactive push for long-term transmission planning at the local level, from the City Council of New Orleans and the Louisiana Public Service Commission.
When compared with the rest of the nation, Louisiana sees some of the most frequent, extended outages, So, building more efficient transmission solutions to enhance reliability and ensure reliable access to the lowest-cost electricity is particularly important for us..
Louisiana residents also consume the most power in the U.S. on a per capita basis, with most homes relying on electric heating in addition to air conditioning. Those two factors, combined with our state’s high poverty rates, highlight why changes are needed.
Between 2019 and 2022, New Orleanians saw their monthly electricity bill increase by 60%, with their price per kilowatt hour increasing twice as fast as the national average since 2020. Studies have shown that additional regional transmission capacity is needed to enable affordable power and reliable service in the Pelican State and across our region, known as the Delta region.
Yet Louisiana has failed to build the large-scale, efficient transmission lines needed to access the lowest-cost generation resources and avoid reliability issues.
Across the nation, the cost of clean energy such as wind, solar and battery storage has dropped drastically. But that hasn’t helped utility customers yet because these resources have yet to be built in measurable quantities in the South. In the Southern region, in just one year nearly 400 clean-energy projects applied to connect to the power grid; a quarter of those are in Louisiana. Not all of these projects make it into service ultimately, but to make sure that those that are, are providing power on a reliable grid, transmission planning with a long-term focus needs to be a part of the equation.
Crucially, two Entergy subsidiaries – Entergy Louisiana and Entergy Arkansas – stand to benefit from maintaining the status quo, according to a recent study. The two companies – which own generation, transmission, and distribution divisions in the Delta region – collectively would have seen a $930 million reduction in 2022 net revenues under market integration spurred by new transmission development.
This focus on profits has hurt New Orleanians.
As Councilmember Helena Moreno wrote nearly three years ago in a letter to the Midcontinent Independent System Operator, or MISO, Louisiana’s regional grid operator: “Historically, Entergy isolated itself to ensure only Entergy’s generators could supply electricity to its customers. This parochialism resulted in inflated rates to customers and diminished Entergy’s ability to deliver electricity when Entergy’s generators or transmission grid went down. When Hurricane Ida hit, New Orleans and its people once again suffered the consequences of Entergy’s protectionism. Some even died because of power outages in the city.”
That’s why FERC’s new rule is needed.
Like roads connecting one state to another, regional transmission lines deliver major economic benefits. The regional grid operator serving our state, approved 18 regional lines in the northern portion of its territory, which are expected to deliver 2.6 times more benefits than costs through fuel savings, greater system efficiency, and avoided load shedding, among other benefits.
These projects should also help improve system resiliency to increasingly frequent extreme weather events.
In the coming years, the grid operator will consider similar projects to serve our region. By upllifting the benefits of long-term regional transmission projects, FERC’s final rule would relieve the deadlock and confusion that regulators experience when determining whether to support long-term planning while helping ensure the affordability of power for the region.
Overall, a strong final rule from FERC would help ensure there is no backsliding when the lines for our region are planned.
Time is of the essence — Louisiana needs considerable transmission to meet current and future system demands.
In a recent report, the U.S. Department of Energy concluded that by 2035 the Delta region will need to more than double its capacity to provide the energy our region needs. Yet, our region lags far behind when it comes to the number of new circuit-miles of transmission installed over the last decade.
Better transmission capacity reduces power costs. That’s because a bigger, more-connected grid enables greater competition on the system, connecting consumers with the lowest-cost generation. More lines also reduce grid congestion, which occurs when limited transmission capacity prevents consumers from accessing the lowest-cost, available power source. In 2022, congestion cost consumers about $3.7 billion in our grid region.
In short: better-planned regional transmission lines will deliver cheaper, cleaner, and more reliable power.
As we know firsthand, the Delta region is incredibly susceptible to severe hurricanes that can knock out power for days and cause widespread damage across the electricity system. The region needs more transmission capacity to better access a diversity of generation options and strengthen the ties between states.
By doing so, Louisianans will also see much-needed savings on their energy bills.
Regional problems require regional solutions. It’s time for an upgrade. It’s time for a change. The state needs a grid that is ready for the power system of the 21st century.
Andy Kowlaczyk lives in New Orleans and serves as transmission director for the Southern Renewable Energy Association, an industry-led initiative that promotes responsible use and development of wind, solar, energy storage, and transmission solutions across the Southeast U.S.