QER AppendixC Electricity
QER AppendixC Electricity
QER AppendixC Electricity
Appendix C
ELECTRICITY
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-1
Appendix C: ELECTRICITY
Highlights
Investments in transmission and distribution upgrades and expansions will grow. It is anticipated that in the next
two decades, large transmission and distribution investments will replace aging infrastructure; maintain reliability; enable
market efficiencies; and aid in meeting policy objectives, such as greenhouse gas reduction and state renewable energy goals.
Both long-distance transmission and distributed energy resources can enable lower-carbon electricity. The
transmission network can enable connection to high-quality renewables and other lower-carbon resources far from load
centers; distributed energy resources can provide local low-carbon power and efficiency.
The potential range of new transmission construction is within historic investment magnitudes. Under nearly all
scenarios analyzed for the Quadrennial Energy Review, circuit-miles of transmission added through 2030 are roughly equal to
those needed under the base case. And while those base case transmission needs are significant, they do not appear to exceed
historical yearly build rates.
Flexible grid system operations and demand response can enable renewables and reduce the need for new
bulk-power-level infrastructure. End-use efficiency, demand response, storage, and distributed generation can reduce the
expected costs of new transmission investment.
Investments in resilience have multiple benefits. Investments in energy efficiency, smart grid technologies, storage, and
distributed generation can contribute to enhanced resiliency and reduced pollution, as well as provide operational flexibility for
grid operators.
Innovative technologies have significant value for the electricity system. New technologies and data applications
are enabling new services and customer choices. These hold the promise of improving consumer experience, promoting
innovation, and increasing revenues beyond the sale of electric kilowatt-hours.
Enhancing the communication to customer devices that control demand or generate power will improve the
efficiency and reliability of the electric grid. For example, open interoperability standards for customer devices and
modified standards for inverters will improve the operation of the grid.
Appropriate valuation of new services and technologies and energy efficiency can provide options for the
utility business model. Accurate characterization and valuation of services provided to the grid by new technologies can
contribute to clearer price signals to consumers and infrastructure owners, ensuring affordability, sustainability, and reliability
in a rapidly evolving electricity system.
Consistent measurement and evaluation of energy efficiency is essential for enhancing resilience and
avoiding new transmission and distribution infrastructure. Efficiency programs have achieved significant energy
savings, but using standard evaluation, measurement, and verification standards, like those recommended by the Department
of Energy ’s Uniform Methods Project, is key to ensuring that all the benefits of efficiency are realized, including avoiding the
expense of building new infrastructure.
States are test beds for the evolution of the grid of the future. Innovative policies at the state level that reflect
differences in resource mix and priorities can inform Federal approaches.
Different business models and utility structures rule out “One-Size-Fits-All” solutions to challenges. A range of
entities finance, plan, and operate the grid. Policies to provide consumers with affordable and reliable electricity must take into
account the variety of business models for investing, owning, and operating grid infrastructure.
Growing jurisdictional overlap impedes development of the grid of the future. Federal and state jurisdiction over
electric services are increasingly interacting and overlapping.
EL-2 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Introduction
The United States has one of the world’s most reliable, affordable, and increasingly clean electric systems—a
system that powers its economy and provides for the well-being of its citizens. The U.S. electric system is at a
strategic inflection point—a time of significant change for a system that has had relatively stable rules of the
road for nearly a century.
Much change, including innovation, is underway in the transmission, storage, and distribution (TS&D) part
of the electric power system, as discussed in this appendix and also summarized in industry documents.1
Industry and state electricity officials are engaged in discussions of the many aspects of the changes and
innovations occurring now, as well as those yet to occur.a Integrating all of the new technologies, products,
and services into the grid is underway by many, with more work to be done on deployment—as the products,
services, and technologies evolve and become commercial—but also on how all of the new pieces can fit
together into the existing TS&D grid to become the grid of the future.
Ongoing and future policy and investment decisions and technology innovations will shape the electric
system’s future, including its ability to provide affordable and reliable service while withstanding a host
of human-made and natural threats, and, at the same time, reduce energy-related greenhouse gas (GHG)
emissions. The nature of the business model of providing various elements of electric service is evolving;
yet, the grid must continue to provide essential services without interruption while accommodating change.
Because the inflection point is really multiple inflection points in regulation, technology, and markets—
occurring at different speeds in different parts of the country, and with a not-yet-clear end point—a clear
picture of ongoing trends and new dynamics in the electricity sector is essential to plan for the future.
At the core of the electricity system is the grid—a complex, highly engineered network that coordinates the
production and delivery of power to customers. There are six elements that make up the grid—four physical
components of the electric system (generation, transmission, distribution, and storage); the information
infrastructure to monitor and coordinate the production and delivery of power and operate the grid; and
demand—the driver of power system operation and investment.
Figure C-1 shows three of the grid elements: generation, transmission, and distribution. Not shown are the
current, relatively small amounts of storage, mostly on the bulk power part of the diagram. The diagram
shows the traditional one-direction flow of electricity from central generation to the end user. Not depicted,
but discussed later in this appendix, is the growing engagement of the customer emerging in some parts
of the United States through use of distribution generation, energy efficiency, and other forms of customer
engagement. These trends, if they continue, can have major implications for the electricity transmission and
distribution (T&D) parts of the U.S. electric grid, one of which is increasingly two-way flows of electricity at
the distribution level that is now designed for one-way flows.
a
For example, at the February 16, 2015, meeting of the National Association of Regulatory Utility Commissioners in Washington,
D.C., a session on “The Evolving [Distribution] Grid” had moderator Lisa Wood of the Institute of Electric Innovation state: “The
conversation has moved forward from just a year ago — now we are discussing how the distribution grid is evolving into a broad
platform to connect an increasingly diverse set of both supply-and demand-side resources. We are now squarely focused on the
evolving distribution grid.”
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-3
Appendix C: ELECTRICITY
Primary Customer
13kV and 4kV
The current U.S. grid is the conduit for bulk generation to various end users. There are six elements that make up the grid: four physical components
of the electric system (generation, transmission, distribution, and storage); the information infrastructure to monitor and coordinate the production
and delivery of power and operate the grid; and demand—the driver of power system operation and investment. New storage technologies can be
deployed throughout the power system in the future.
To serve a 21st century consumer base, the grid must and is adapting to emerging challenges and
opportunities. Current drivers of change within the electricity sector include the growing use of natural
gas to power electricity generation; low load growth; distributed generation; increasing deployment of
renewable energy and the retirement of coal and nuclear generation; severe weather and climate change;
and growing interactions at the Federal, state, and local levels. Internal drivers of change derive largely from
the development and deployment of intelligent and advanced technologies that are increasing the ability to
optimize the use of all grid and grid-connected resources, thereby improving grid productivity to control
power flows, remotely troubleshoot problems, enable storage of electricity, and empower customers to better
manage their energy use.
The future grid likely will accommodate and rely on an increasingly wide mix of resources, including large
centralized and more dispersed, customer-side distributed generation—some of it intermittent and variable
in nature. The prospect of new storage technologies also has the potential to alter the traditional requirements
for generation adequacy, which is the amount of generation (and demand-side resources) required to
maintain system reliability. Storage also has the potential to alter the nature of production, transmission, and
distribution of power.
Change will occur at different rates in different parts of the country, largely determined by market and regulatory
structures, along with the varying mix of current and future resources supplying customers in different regions.
This complex mix of new economic realities; changing resource mix; and the U.S. electrical system’s physical
architecture, institutional structure, and regulatory influences poses challenges to the planning and operations
models that have driven electricity generation, transmission, and distribution decisions for the better part of
a century. Coordinated planning and operation that has been essential to management of the grid will remain
critical to ensuring its smooth function. However, the processes will need to account for millions of new
customer-side generation and efficiency sources that are increasingly material to the TS&D system. This shift
will have important region-specific characteristics, but in all cases, substantial planning, and often investment,
will be necessary to meet grid operational needs on the scale of milliseconds, minutes, hours, years, and
decades into the future (see Figure C-2 for a timescale of some of the continuous actions that must occur from
milliseconds to years that are required to keep the Nation supplied with electricity reliably).
EL-4 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Figure C-2. Transmission Operation and Planning Functions Shown by Timescale3
Generator
Economic Unit Mid-Term Expansion
Protection Primary Control
Dispatch Commitment Planning Planning
and AGC*
Reliable and affordable electricity requires a continuum of operating, planning, and investment decisions over a wide time horizon from real time to
future years.
The electric utility industry first sought regulation in exchange for the ability to provide service as a monopoly in Samuel
Insull’s 1898 presidential speech to the National Electric Light Association. Accordingly, state governments allowed private
electric companies to exist as state-regulated monopolies, with the obligation to provide safe and adequate service at just
and reasonable rates—a mandate that has been clarified over the last century through judicial decisions and legislative
action. Investor-owned utility expansion and access to capital was accomplished through a financial structure called holding
companies in which services were provided to the local utilities by these holding companies (which often covered many states).
However, state regulatory agencies often lacked the jurisdiction or capacity to adequately regulate the rates and terms of
holding company transactions. In response, Congress passed the Federal Power Act, which granted the existing Federal Power
Commission jurisdiction over wholesale electric rates, such as those charged by holding companies to their subsidiaries. This
grant of authority to the Federal Power Commission helped align regulatory functions with the physical structure of the electric
system. The ongoing changes in the electric system are increasingly raising questions about the alignment between physical
structure and regulation.
In addition to private electric companies, sometimes called investor-owned utilities, there exist publicly owned (often
municipalities) and cooperatively owned utilities that also directly serve electricity customers through their distribution
function. Each type of utility is subject to different regulatory requirements, and their diverse nature further adds to the
complexity of addressing many of today’s electricity issues. These differences are discussed later in this appendix.
At its beginning, the electric power industry was largely local and relatively limited in scale—with generation,
transmission, and distribution built and owned by a single entity to serve a relatively small, geographically
constrained set of customers. As diverse loads were added and generation technology demonstrated economies
of scale, the cost of electricity was minimized by consolidating entities, first into larger utilities and ultimately
interconnected power systems—with natural monopoly characteristics—producing service at the lowest cost
to all. One element of this cost savings came from coordinating the operation of power plants based on the
concept of economic dispatch, wherein generation resources were deployed on the basis of operating costs
(subject to reliability requirements). Over time, the bulk power system was interconnected with longer-
distance transmission lines, in some cases even among distant regions. Thus, for example, 500-kilovolt (kV),
high-voltage, direct current transmission lines were built between the Pacific Northwest and California in the
late 1960s to allow seasonal-based exchanges of electricity between the two regions when electricity generation
was less expensive in one region than the other.4
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-5
Appendix C: ELECTRICITY
Today, the U.S. T&D system is a vast physical complex of interlocked machines and wires, with a
correspondingly complex set of institutions overseeing and guiding it through policies, statutes, and
regulations. The result is a dynamic web that provides reliable, affordable, and increasingly clean electricity to
our Nation. The U.S. grid delivers approximately 3,857 terawatt-hours of electrical energy from electric power
generators to 159 million5 residential, commercial, and industrial customers.b This is accomplished via 19,000
individual generators at about 7,000 operational power plants in the United States with a nameplate generation
capacity of at least 1 megawatt (MW).6 These generators send electricity over 642,000 miles7 of high-voltage
(34 kV and greater) transmission lines and 6.3 million miles8 of distribution lines. Together with its electric
generation component, the grid is sometimes referred to as the world’s largest machine; in 2000, the National
Academy of Engineering named electrification as the greatest engineering achievement of the 20th century.9
b
Here, a “customer” is defined as the electricity consumed at one electric meter. Thus, a customer may be a large factory, a commercial
establishment, or a residence. A rough rule of thumb is that each electric meter serves 2.5 people.
EL-6 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Allowing for Increased Customer Control, Expanded Service Offerings,
and Innovation
A fast-growing group of technologies and data applications are enabling electric customers to measure and
control their electric power use to an unprecedented degree, unlocking new services, cost-savings opportunities,
and two-way interactions with the power system. New business and regulatory models are needed to facilitate
these new services, providing greater value, lower environmental impact, and more efficient grid operations.
Flexibility is a key aspect of both reliability and the ability of the electricity T&D system to provide new
services and assimilate new technologies. Flexibility allows infrastructure to accommodate changes in
response to new or unexpected system drivers. An important component of flexibility for the electric system is
interoperability—the ability to interact and connect with a wide variety of systems and subsystems, both in and
outside of the energy sector.
Natural gas-fired power plants accounted for more than 50 percent of new utility-scale generating capacity
added in 2013.14 Natural gas-fired capacity continued to expand in 2014.15 Infrastructure changes may be
needed to accommodate future growth in natural gas use for power, including repurposing and reversals of
existing pipelines; lateralsd to gas-fired generators;16 more looping and compression to the existing network;
potential new pipelines (although, this could be regionalized); and additional processing plants and high-
deliverability storage. Under multiple scenarios, the pace of these changes for the interstate natural gas pipeline
system through 2030 is projected to be comparable to or less than historical build rates.
With natural gas fueling an increasing share of the Nation’s electric generation, the ability of the electricity and
natural gas systems to function together is becoming much more important. Interdependency necessitates
closer coordination in both planning and real-time operations between the two sectors to assure reliable supply
and operations in all conditions of both energy resources to the U.S. economy. A discussion of how overall
system flexibility can be enhanced through market and operational processes is discussed in Appendix B
(Natural Gas).e
c
Note that the Energy Information Administration 2030 projection does not include laws and policies not enacted or finalized at the
time of the projection, thus it does not include any additional natural gas generation under the Environmental Protection Agency’s
proposed Clean Power Plan. Additionally, the Energy Information Administration’s 2030 projection assumes natural gas price
increases, as well as new renewables generation still-to-be-built to comply with state Renewable Portfolio Standard mandates.
d
Small segments of pipelines designed to link gas-fired power plants to the natural gas pipeline system.
e
Extensive discussions between the gas and electric sectors have been and continue to occur at the local, regional, and interconnection-
wide levels, as well as through the activities of the Federal Energy Regulatory Commission and the North American Energy Standards
Board, among others.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-7
Appendix C: ELECTRICITY
Figure C-3. U.S. Electricity Demand Growth in the EIA 2014 Annual Energy Outlook Reference Case, 1950–2040
(percent)17
Rate of Growth
14%
HISTORY PROJECTIONS
12%
10%
8%
6%
2011-2040
Average
4%
2.4%
2%
0% 0.9%
-2%
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040
The rate of growth in electricity use has declined since 1950, while the rate of growth in gross domestic product has stayed relatively constant. The
slower electricity growth rate is a result of several factors, including a decline in energy-intensive industries, increasing energy efficiency, and the slow
recovery from the recent recession.
Declining demand growth for grid-delivered electricity is driven by long-term structural shifts to a service
economy; economics, new technologies, and policies that began improving energy efficiency several decades
ago; and more recently, the slow recovery from the 2007–2009 recession, as well as increases in distributed
generation (particularly rooftop solar, but also natural gas-fired) in some parts of the United States.18 Due to
regional and local differences, it is important to note that states and regions exhibit substantial variations in
their rates of load growth (see Figure C-4).
EL-8 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Figure C-4. Percent Change in Retail Electricity Sales (kilowatt-hours), 2008–201319
6%
0% 1%
-9% 27% -3%
2% -2% -3%
6% 9%
-2%
-1%
Percent Change
Increase Decrease
-9%
There is a considerable variation in electricity retail sales among states and by region, ranging from an increase of 27 percent in North Dakota to a
decrease of 11 percent in Kentucky; these variations are due in part to changes in load growth.
Low or declining load growth has several consequences for the electricity TS&D system. Most significantly,
new utility business models, with matching regulatory models, may be necessary to incentivize appropriate
investment in distribution infrastructure if delivered electricity volumes decline. Without readjusting rates, the
traditional practice of relying on volume-based rates for significant portions of capital cost recovery can pose
challenges when load growth declines. Adopted during a time of demand growth, volume-dependent rates do
not precisely separate grid costs from generation costs. While grid costs (the cost of the wires and distribution
equipment from the generator to the house and the maintenance of those wires) tend to be less sensitive to
incremental changes in volume delivered, short-term generation costs can be highly variable—largely because
fuel and variable operations and maintenance expenses comprise a large portion of the total costs, and they
vary significantly by type of generator. Many utility rates do explicitly separate fixed charges and volumetric
charges in their customer bills to better recover fixed costs; though, some have argued the fixed charges used
do not fully recover all fixed asset costs.20
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-9
Appendix C: ELECTRICITY
Significant wind additions began in 2006, spurred by state Renewable Portfolio Standards (RPSs), high
natural gas prices at the time (that largely drove high wholesale energy prices), the production tax credit,
and wind technology cost reductions. U.S. wind capacity is currently 65 gigawatts (GW) with nearly 13 GW
under construction.22 Further, there is potential for another 15 GW based on projections of plants currently
in permitting or early-stage development through 2020 based on projections of plants in permitting or early-
stage development as of 2013. Generation from wind met 4.1 percent of the total domestic demand in 2013, up
from less than 0.5 percent in 2005.23
Current solar capacity and output is significantly lower than wind, though it is expected to grow substantially
in the next several years.24 Solar met slightly less than one-quarter of 1 percent of total demand in 2013.25
While state RPS mandates have goals that require increasing percentages of renewable electricity generation
through 2020 (and in some cases, beyond), most regions already have enough renewables capacity under
development to meet their 2020 targets.26 In the regions with the highest-quality wind resources, power
purchase agreements for wind power have been reduced to as low as $25 per megawatt-hour after taking the
production tax credit ($23 per megawatt-hour) into account.27 Future expansion beyond the current RPS
mandates will be highly dependent on a variety of factors, including whether states choose to increase their
mandates; technology advances and any resulting renewables price declines; the price of competing resources;
and decisions by the Federal Government on the further extension of the production tax credit and the
investment tax credit.
Projections of future coal unit retirements vary, depending on assumptions made about future economic
conditions, technology cost and performance, and regulatory requirements. This introduces uncertainty into
projections of related TS&D needs.
Coal generation retirements will vary by region, based on the amount of existing coal generation in that
region, with thus varying implications for that region’s transmission and bulk power system’s operations and
reliability. System planners in several regions have developed future scenarios that incorporate announced
and projected coal unit retirements, and they have begun to use those forecasts to plan for future transmission
additions needed to maintain reliability.30 In some cases, regions with relatively large amounts of announced
coal retirements (including the Mid-Atlantic and the Midwest) are pursuing transmission upgrades to reduce
costs and/or maintain reliability.31, 32, 33
Retirements are also affecting the nuclear power industry, with closures announced in 2012–2013 of five
nuclear reactors, the first since 1998. Nuclear power supplied nearly 19 percent of U.S. electricity in 2013, yet
only accounts for 10 percent of total installed capacity. Preliminary data for 2014 show a record average 90.9
percent capacity factor for the Nation’s 100 nuclear units.34 Investors and industry experts predict that several
more reactors may be at risk for early shutdown, due largely to economic pressure brought on by low electricity
EL-10 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
prices in Regional Transmission Organization (RTO)/Independent System Operator (ISO) markets and other
factors. Factors contributing to the decrease in wholesale electricity prices include the low price of natural gas,
low overall electricity demand, and, in some regions of the country, subsidies for renewables that occasionally
produce negative prices in RTO/ISO wholesale electricity markets.f In addition, new safety regulations
resulting from Fukushima and certain environmental regulations are increasing the need for additional capital
expenditures at some plants. On the other hand, GHG regulations could make nuclear plants, with zero carbon
emissions, more cost effective by internalizing the cost of carbon pollution.
The loss of these plants could lead to a shift in power flows across the transmission system. Since nuclear plants
are large (600 MW to 2,300 MW), their loss can be problematic for the transmission system. In 2012, the
New York ISO analyzed the implications of shutting down the two Indian Point nuclear units and found that
there would be potential deficiencies in power supplied to New York City, violations of reliability criteria, and
potentially voltage performance issues.35
Earlier, in 2006, a joint study by the National Research Council of the National Academies found that a nuclear
“replacement strategy would most likely consist of a portfolio of approaches … including investments in
energy efficiency, transmission, and new generation.”36 Following such a strategy, the New York Public Service
Commission recently approved a plan to add new transmission facilities and energy efficiency/demand-
response measures to address potential problems with Indian Point retirements.37 A similar case occurred in
southern California where the closure of the two San Onofre nuclear units resulted in local reliability concerns
for San Diego, as well as local voltage problems. To address these issues, the California ISO approved a new
transmission line with an in-service date of 2017 to support the San Diego region.
Not all nuclear plant shutdowns require transmission upgrades or replacement generation; impacts are
dependent on the local and regional network topography. For example, when Dominion Resources, Inc. closed
its Kewaunee nuclear plant in Wisconsin in 2013, the regional system operator (i.e., Midcontinent ISO) found
no transmission issues.38 The relatively minimal effects of nuclear retirements on transmission are discussed
further in the Impact of Nuclear Retirements on Transmission section of this appendix.
Fuel Deliverability
Other near- to mid-term concerns that can potentially stress transmission and reliability are natural gas
and coal deliverability. For New England, due to a lack of capacity purchases on pipelines, there is limited
natural gas fuel availability at certain peak times, which has shifted dispatch and electric transmission
patterns.39 Transmission lines are being developed and proposed into the New England region, in addition
to new pipelines. Low coal inventories at certain coal-fired electric generation facilities have been attributed
to limited railroad access,40 in part caused by the increased usage of rail for transporting crude oil from oil
pipeline constrained regions, such as the Bakken Basin in North Dakota and Montana. Supply constraints have
occasionally led to plants operating at reduced or minimum load to ensure that they do not deplete their onsite
coal supplies prior to replenishment, with potential impacts on reliability.41 This was the case in Minnesota in
2014, which idled four units due to inadequate coal supplies.42
For the long term, significant uncertainties about generation resources translate to similar corresponding
uncertainties in the amount and location of new T&D.
f
Some RTO/ISO wholesale electricity markets have situations that can result in prices below zero. That is, sellers, such as wind
generators, pay buyers to take the power so their production tax credit can still be claimed. This situation arises because certain types
of generators, such as nuclear, cannot physically shut down for short periods of time when there is excess generation on the system.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-11
Appendix C: ELECTRICITY
Figure C-5. January 2011–August 2014 Electricity Disturbances Reported to the Department of Energy43
4,000
300
3,000
200
2,000
100
1,000
0 0
Weather Component failures and/or internal causes Physical attack Cyber attack
Weather-related events triggered the greatest number of reported electric disturbances and had far greater impacts on electricity service than
component failures, physical attacks, and cyber threats. Incidents vary by region and are not just due to weather, but also due to types of vegetation,
as well as vegetation management and other maintenance practices. Not all incidents, such as voltage reductions and public appeals, result in actual
customer outages.
Weather-related outages are estimated to have cost the U.S. economy an inflation-adjusted average of
$18 billion to $33 billion per year between 2003 and 2012,44 and some estimates are even higher.45 There may be
an emerging trend of growing frequency and magnitude of weather-related outages to the distribution system.
Unfortunately, data collection on outages is not standardized—either across states or across the utility industry
at the distribution level where most outages occur. Only in the last several years has collection of data through
the Department of Energy’s (DOE’s) Form OE-417 been more thorough, and thus a comprehensive and accurate
long-term trends analysis is not possible from which conclusions can be drawn.
While electricity services in all regions of the country are affected by weather-related outages, “year-in-review”
reports published by DOE since 2010 illustrate that certain regions typically are affected more by certain types of
weather events.46 For example, tropical storms and hurricanes most frequently cause outages in the Gulf Coast
and Atlantic regions. Tornado outbreaks most commonly disrupt service in the Midwest. Severe thunderstorms
can cause problems in most regions, but particularly in the Midwest, Southeast, and Mid-Atlantic regions. Winter
EL-12 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
storms also have been responsible for disruptions in many regions; the eastern United States has been affected
most frequently, though the Pacific Northwest, California, and Texas also are impacted. The West sees many outages
caused by lightning and wildfires. The Santa Ana winds are a relatively unique challenge for southern California.
An increase in the frequency of disruptive extreme weather events is the primary way in which climate change
is expected to further impact energy infrastructure.47 Trends toward more frequent and more intense heatwaves,
droughts, wildfires, heavy precipitation events, and coastal flooding have been observed and attributed to climate
change,48 and these trends are projected to continue.49 Additionally, sea-level rise will exacerbate the potential
for climate change to bring more frequent hurricanes on the high end of the Saffir-Simpson Hurricane Scale
(e.g., Category 4 and 5 hurricanes may become more common).50 Weather events reduce system deliverability,
primarily due to high winds, lightning, or wildfires that can cause damage on the T&D network.51 Sea-level rise
and storm surge expose distribution substations, transmission structures, and power plants to flooding.
U.S. temperatures are projected to continue rising in the coming decades.52 Electricity T&D systems carry
less current and operate less efficiently when ambient air temperatures are higher.53 In addition, increasing
temperatures likely will increase electricity demand for cooling, which could increase utilization of T&D systems
during peak-demand periods. Increasing air and water temperatures reduce the efficiency of power plant cooling,
which increases the risk of partial or full shutdowns of generation facilities during heat waves.54 Additionally, case
studies indicate that sudden, extreme heat can cause transformers to malfunction or stop working.55
Modern power systems rely heavily on automation, centralized control of equipment, and high-speed
communications to increase efficiency and improve awareness. Those same systems also make the grid
vulnerable to cyber threats. Vulnerabilities include industrial control systems, grid devices capable of two-way
communications, outdated network access systems (such as dial-in access), and international supply chains
related to smart grid components.59 The most critical systems are the supervisory control and data acquisition
systems that gather real-time measurements from substations and send out control signals to equipment, such
as circuit breakers. If breached, hackers could manipulate supervisory control and data acquisition systems
to disrupt the flow of electricity, transmit erroneous signals to operators, block the flow of vital information,
disable protective systems, and even impart physical damage on facilities. Cyber threats have not yet caused
extended outages, but if well-coordinated, they could magnify the damage of a physical attack. For example, a
cascading outage could be aggravated if operators do not receive timely notification, or if protective devices are
disabled.
The range of physical threats to system elements has expanded from occasional acts of vandalism or minor
theft to include coordinated attacks, and recent attacks have raised the awareness of electric infrastructure
vulnerability. Loss of system functionality caused by physical attacks can result in instability, uncontrolled
separation, or cascading failures.60, 61 For example, in April 2013 at Pacific Gas and Electric Company’s 500-kV
Metcalf substation, assailants outside the substation reportedly shot at the high-voltage transformer radiators
with large-caliber bullets, causing them to leak cooling oil, overheat, and become inoperative. While the attack
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-13
Appendix C: ELECTRICITY
knocked out 17 transformers that funnel power to Silicon Valley and took 27 days to repair, service was not
interrupted to customers.62 In another case, there was an attack on the transmission grid in Arkansas in October
2013, including a deliberately set fire at Entergy’s 500-kV substation in Lonoke County. 63 Other attacks on
substation equipment have been reported with some regularity, although most have been attributed to vandals.64
Geomagnetic storms are another vulnerability that poses increased risk, especially as the reliance of critical
infrastructures on electricity increases. These storms arise from the interaction of the solar wind with Earth’s
magnetic field. Storm-time geomagnetic activity induces electric fields in the electrically conducting lithosphere,
and these, in turn,65 can drive uncontrolled currents in power grids that interfere with their operation. Though
the probability of an extreme geomagnetic storm is relatively low, the occurrence is almost inevitable at some
point in the future. Geomagnetic storms have the potential to damage transformers and other critical grid assets
over large geographical areas. A geomagnetic storm in 1989 resulted in a blackout in Montreal and most of the
Province of Quebec.66
More recently an intense geomagnetic storm caused a blackout in Malmo, Sweden, and damaged several
transformers in South Africa. Economic and societal costs attributable to impacts of geomagnetic storms
could be very large.67 A 2013 Lloyds of London report indicated that geomagnetic disturbances could cost the
economy as much as $2.6 trillion and take 1–2 years for a full recovery (for perspective, the Northeast blackout
in 2003 was estimated to have cost between $4–$10 billion).68
The cyber threat to critical infrastructure continues to grow and represents a serious national security challenge for the
United States. Federal, state, local, tribal, and territorial entities, as well as public and private owners and operators, share
responsibility for proactive, coordinated efforts that strengthen the security and resiliency of critical infrastructure.
In February 2013, President Obama issued Executive Order No. 13636, Improving Critical Infrastructure Cybersecurity, and
Presidential Policy Directive-21, Critical Infrastructure Security and Resilience. These policies reinforce the need for holistic
systems that address security and risk management in the energy sector. In February 2014, the Obama Administration
launched the Cybersecurity Framework to assist organizations in enhancing critical infrastructure cybersecurity. In January
2015, the President issued an updated legislative proposal for a national data breach notification standard, a bill to enhance
law enforcement tools for combatting cybercrime, and a bill to promote better cybersecurity information sharing. In February,
the President issued Executive Order No. 13691, Promoting Private Sector Cybersecurity Information Sharing, to promote
private sector information sharing through the creation of information sharing and analysis organizations. In April, President
Obama issued Executive Order No. 13694, Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-
Enabled Activities, to provide the Treasury Secretary with the authorities to impose sanctions upon malicious cyber actors who
seek to disrupt or destroy U.S. critical infrastructure, including that within the energy sector.
While the Department of Homeland Security (DHS) coordinates the overall Federal effort to promote the security and resilience
of the Nation’s critical infrastructure, in accordance with Presidential Policy Directive-21, the Department of Energy (DOE)
serves as the day-to-day Federal interface for sector-specific activities to improve security and resilience in the energy sector.
While this report does not go into detail on cybersecurity, the Federal Government and others have a range of activities
underway to improve cybersecurity of critical infrastructure. Improving security and resilience includes accelerating progress in
the following areas relevant to the Quadrennial Energy Review:
1. Build robust information-sharing architecture across the energy sector. Robust information sharing between
government and industry, and among owners and operators, is critical for addressing cyber threats. Entities like the three
Information Sharing and Analysis Centers within the U.S. energy sector and Information Sharing and Analysis Organizations
(as encouraged by Executive Order No. 13691) help propagate information on cyber threats, vulnerabilities, incidents,
and solutions in the energy sector. Energy sector organizations can participate in information sharing with DHS’s National
Cybersecurity and Communications Integration Center, including via automated, machine-readable methods wherever
possible. Such information sharing can occur directly or via an Information Sharing and Analysis Center.
EL-14 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Improving Cybersecurity in the U.S. Energy Sector (continued)
2. Expand implementation of best practices and sound investments by owners and operators. The Cybersecurity
Capability Maturity Model, developed by DOE in partnership with industry and others, can identify and assess various
practices for energy sector cybersecurity. In many cases, there is an opportunity for owners and operators of critical
infrastructure to invest more in people, processes, and technology that can improve security and resilience. The model
can assist those responsible for overseeing cybersecurity decisions. More broadly, energy sector organizations can use the
Cybersecurity Framework as part of an enterprise risk management approach. DHS’s Cybersecurity Critical Infrastructure
Community Voluntary Program offers tools and resources to support use of the Cybersecurity Framework.
3. Develop and deploy cutting-edge technical solutions. Experience indicates that proactive measures taken on the
basis of advanced research and development can provide a defensive edge. DOE has partnered with energy sector owners,
operators, and vendors since 2006 to research, develop, and demonstrate cybersecurity solutions according to a set of
near-, mid-, and long-term objectives outlined in the Roadmap to Achieve Energy Delivery Systems Cybersecurity, which was
developed through government-industry partnership.
4. Build a strong incident management capability. Government and industry are continuing to enhance their
capabilities to respond to serious cybersecurity incidents in the energy sector. This includes information-sharing processes,
mitigation strategies, training, and resources. Incident response plans need to be developed, vetted, and tested through
progressively challenging exercises, culminating in a “capstone” exercise like GridEx, which is hosted by the North American
Electric Reliability Corporation. Future exercises could address the interdependency between the electricity subsector and
the oil and natural gas subsector.
The current Federal-state regulatory boundary dates back to the 1930s, when the Federal Power Act
substantially expanded the responsibilities of the Federal Power Commission (the predecessor to the Federal
Energy Regulatory Commission [FERC]) and created Federal oversight of wholesale sales of electricity and
transmission of electricity in interstate commerce, as well as state oversight of retail sales and distribution of
electricity. In recent decades, organized wholesale markets have spread geographically and incorporated a
greater variety of products with a broader set of market participants. This trend—coupled with the increased
ability of end-use consumers to supply distributed generation, demand response, and other services—has and
will continue to raise questions about the dividing line between state and Federal jurisdiction.g
g
See, for example, Electric Power Supply Association v. FERC, 753 F.3d 216 (D.C. Cir. 2014). Petition for certiorari granted.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-15
Appendix C: ELECTRICITY
Dynamically Controlled
Generation
* Bubble size is determined by
acronym width
Federally Regulated
Power Lines
115-161kv
230-500kv Alberta Electric
System Operator
Ontario Independent
Electricity System Operator
New England
ISO
Midcontinent New York
ISO ISO
Electric Reliability
Council of Texas
Transmission lines are regulated at the Federal level with regard to their rates, terms, and conditions of service. In contrast, states regulate the
distribution of electricity to end-use customers for entities under their jurisdiction, as well as the siting of transmission on non-Federal lands by
non-Federal entities. Further, in most states, local appointed or elected governing boards handle the regulation of distribution for their publicly or
cooperatively owned electric utility. This diversity of institutions and differences in jurisdictional boundaries create challenges in grid governance
(given that changing the grid in one location can alter electricity dynamics over a large area).
EL-16 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
The new concept of “transactive energy,” discussed in more detail later in this appendix, spurred by new and
emerging distribution- and customer-based technologies, may pose the biggest single “new” factor where the
physical grid operations and the policy and regulatory oversight jurisdictions that exist today will not fully
align.
Predominately, electricity flows from wholesale markets serviced by central station generation to retail markets
(i.e., end users) unidirectionally from generation, through transmission, to distribution, to the final customer.
With the emergence of “transactive energy” (including demand response, storage, and customer-owned
generation) increasing in some regions of the United States, some amounts of electricity can move from the
customer to the grid, creating more bidirectional flows. New distribution and customer-based technologies can
conceivably provide services to the grid itself. As those flows from customers increase, they will increasingly
affect the planning and operations of the distribution system, and if and when large enough, the transmission
system.
In parallel, increasing interest in applying the Federal ratemaking processes associated with the Public Utilities
and Regulatory Policies Act of 1978 to state decisions affecting retail net metering tariffs for distributed
generation is creating a new dynamic in jurisdiction issues. The Public Utilities and Regulatory Policies Act
of 1978 is a statute based on cooperative federalism. FERC issues regulations to give effect to the statute’s
requirements, and states are responsible for implementing those FERC regulations.
Technology, market, and regulatory changes are already creating a new landscape for independent governance
structures. In the early decades of the electric power industry, almost all utilities generated, transmitted, and
distributed power within the confines of a single state. Over time, however, trade across state lines opened
up opportunities to reduce costs and increase reliability. Some companies formed power pools to facilitate
the coordination of generation so that it could be moved over transmission lines to distant markets, often in
other states. For example, PJM started in 1927 when three utilities with operations in several states formed the
world’s first power pool.70 A number of subsequent developments also have had important impacts. The Energy
Policy Act of 1992 mandated that all transmission owners provide non-discriminatory access to transmission
to facilitate competition. FERC Order Nos. 888 and 889 advanced similar goals, establishing requirements that
public utilities provide open access to their transmission facilities. FERC Order No. 2000 further encouraged
transmission owners to join and transfer operational control of their transmission facilities to an ISO or RTO.
Figure C-7 shows the ISO/RTO regions as of July 2014.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-17
Appendix C: ELECTRICITY
Ontario Independent
Electricity System Operator
New England
ISO
Midcontinent New York
ISO ISO
PJM
Interconnection
California
ISO Southwest
Power Pool
Electric Reliability
Council of Texas
Except for the Southeast and non-California West, organizations known as ISOs or RTOs exist in the United States to plan and operate the grid and
run centrally organized wholesale electricity markets.
ISOs and RTOs also conduct regional transmission planning and submit tariff proposals to FERC for
allocating the costs of corresponding transmission facilities. States in these regions frequently play a role in
stakeholder negotiations on those tariff proposals, as well as maintaining their traditional primary role in
transmission siting. More recently, FERC issued Order No. 1000, which concerns transmission planning and
cost-allocation procedures. Among other things, Order No. 1000 requires transmission providers subject to
FERC jurisdiction to participate in a regional transmission planning process that provides for consideration of
transmission needs driven by public policy requirements, which may include enacted state policies.
Today, ISOs/RTOs are responsible for many aspects of reliable and economic wholesale grid systems
operations within their geographic footprint. Some ISOs/RTOs, such as ISO New England and the New York
ISO, adopted the service territories of pre-existing “tight” power pools. Others, such as the Midcontinent
ISO, developed where no such power pool previously existed. Some states, such as New York, California, and
Texas, have ISOs that are wholly located within the states. Other ISOs/RTOs, such as PJM, have discontinuous
boundaries.h
h
Utilities are not obligated to join a particular RTO/ISO. Rules for joining and obligations of membership differ; utilities therefore
choose on the basis of corporate interests rather than exclusively on geographic location.
EL-18 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Even outside of regions served by RTOs/ISOs, transmission systems owned by FERC-jurisdictional
transmission providers are subject to open and non-discriminatory transmission access requirements set
forth by FERC Order No. 888 and subsequent orders. In these regions, companies may conduct electricity
transactions on a bilateral basis, rather than through organized wholesale electricity markets. Entities trade
when they can benefit from buying or selling power with other generation.
Perhaps the oldest issue affected by differing jurisdictional oversight is siting of interstate transmission
lines. While the Energy Policy Act of 2005 gave FERC limited “backstop” siting authority over interstate
transmission lines, a subsequent Fourth Circuit decision rejected FERC’s effort to implement that authority.
Meanwhile, states in the Midwest, West, and New England have created regional siting protocols, tool kits,
or collaborative organizations to promote more efficient, fair, and timely decisions. The Council of State
Governments has furthered these moves toward more effective collaboration by issuing interstate compact
language so that state legislatures can more easily pursue interstate transmission siting cooperation. The
Federal Government has several efforts underway to improve siting and permitting of TS&D infrastructure,
including transmission lines. These efforts are particularly vital in the West where the Federal Government
is a major landowner. The complexity and pace of the Federal permitting and review processes for proposed
infrastructure projects has been identified as a key challenge to building TS&D infrastructure on Federal land.72, 73
Transmission
Role and Physical Characteristics of System
Transmission is the high-voltage transfer of electric power from generating plants to electrical substations located
near demand or load centers; step-down substations are the boundary between the transmission system and the
distribution system that serves retail customers. The United States has about 642,000 miles74 of high-voltage
(34 kV and greater) transmission lines. Of this amount, NERC identifies roughly 170,000 miles as more than 200
kV among a range of voltage classes, mostly alternating current with some as direct current (see Table C-1).
Table C-1. Approximate Distance of Transmission Lines by Voltages over 200 kV75
Total ac 161,000
Direct Current (DC) 200-299 700
300-399 0
400-599 1,800
> 600 0
Total dc 2,500
Total 169,000
Comparison of alternating current and direct current transmission capacity by voltage and distance.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-19
Appendix C: ELECTRICITY
Transmission lines are primarily owned by investor-owned utilities (IOUs), public power utilities, and
cooperative entities, but new forms of ownership, including independent transmission companies and “pure-
play” merchant transmission firms, are beginning to develop and own transmission. For the new transmission-
focused entities, the core business and potential source of profits is based on acquiring, developing, building,
and operating transmission. Figure C-8 illustrates shares of ownership of high-voltage transmission capacity by
the type of entity that owns the capacity.
3% 14%
NA
7%
Federal
6%
Other Public Power
4%
Cooperative
Investor-Owned Utilities
66%
This figure illustrates the pattern of ownership of high-voltage transmission lines. Currently, transmission lines are primarily owned by IOUs, public
power utilities, and cooperative utilities within each interconnection, but new forms of ownership, including independent transmission companies
and “pure-play” merchant transmission firms, are beginning to participate.
EL-20 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
The transmission network experiences a wide variety of natural disturbances, such as lightning, fire, wind,
ice, wildlife, and vegetation. Human-caused disturbances also occur, whether due to negligence or malicious
intent. However, the vast majority of these disturbances do not result in widespread blackouts. For events that
do result in the failure to serve large portions of the load, the industry has implemented processes to identify
and correct the causes of blackouts.
Planning standards require the bulk power system to be built so that any single (and many double) points
of failure do not result in loss of load.78 Figure C-9 shows the causes for transmission-level outage events, as
recorded in the NERC Transmission Availability Data System.79 While lightning and non-lightning weather
causes are associated with the largest number of recorded outages, protective devices and other designed-in
contingency measures can clear and restore these momentary events quickly, reducing their impact on system
reliability.
Figure C-9. Causes of Transmission Outage Events (from the NERC Transmission Availability Data System)80
Number of Events per Year
3000 Fire
Power System Condition
2500 Contamination
Foreign Interference
2000
Failed Protection System
0 Lightning
A transmission outage will increase the vulnerability of the system to additional outages, but it does not mean
that the transmission outage will result in a loss of load affecting customers or, in the extreme, a cascading
blackout affecting customers widely in many states.
Even in cases of widespread weather events, the transmission system has not been the primary cause of
customer outages. While Hurricane Sandy damaged some transmission facilities, ISO New England, PJM
Interconnection, and New York ISO were able to maintain bulk power system operation through the storm.81
An analysis of the 2012 Derecho, 2011 Hurricane Irene, and 2010 “Snowmageddon” storm showed that the
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-21
Appendix C: ELECTRICITY
majority of outages in the State of Maryland were due to distribution network rather than loss of power from
the transmission feeder.82 A review of the January 2014 polar vortex found that outages were due primarily to
fuel supply and generator availability rather than transmission unavailability.83
In rare instances, a combination of high system stress and human error can result in large-scale outages, as with
the largest blackout since 2000—the August 14, 2003, blackout discussed earlier. On February 26, 2008, the
manual disabling of protection systems was a major factor leading to a blackout affecting 954,000 customers
in Florida.84 On September 8, 2011, a “lack of adequate planning and situational awareness” led to an insecure
system state and was the major factor in a blackout that affected 2.7 million customers in Arizona, California,
and Baja California.85
While transmission towers and large high-voltage transformers are both potential vulnerability points,i, j physical attacks
on towers generally have not resulted in widespread outages because utilities are able to rapidly recover from isolated
tower damage.k In contrast, high-voltage transformers are difficult to replace because each unit weighs 100–400 tons and
is custom built, requiring up to 20 months or more to procure, move, and install.l The United States has never experienced
simultaneous failures of multiple high-voltage transformers, but a coordinated and simultaneous attack on a small number of
these transformers in critical network locations could cause widespread, extended blackouts.m In addition to physical attacks,
induced currents from geomagnetic storms could also damage high-voltage transformers.
i
National Research Council. “Terrorism and the Electric Power Delivery System.” 2012.
j
Congressional Research Service. “Physical Security of the U.S. Power Grid: High-Voltage Transformer Substations.” 2014.
k
Congressional Research Service. “Physical Security of the U.S. Power Grid: High-Voltage Transformer Substations.” 2014.
l
Congressional Research Service. “Physical Security of the U.S. Power Grid: High-Voltage Transformer Substations.” 2014.
m
National Research Council. “Terrorism and the Electric Power Delivery System.” 2012.
In response to the 2003 blackout, the Energy Policy Act of 2005 directed FERC to certify an electric reliability
organization that would be responsible for developing mandatory and enforceable reliability standards for the
bulk power system.86 FERC has certified NERC as that electric reliability organization. FERC reviews NERC’s
proposed reliability standards, which become mandatory and enforceable after FERC approval. FERC also
may direct NERC to develop such standards. In addition to its stakeholder-based standards development
process, NERC also conducts detailed post-outage event analyses to obtain and share lessons learned.87 NERC
is transitioning to a risk-based monitoring and enforcement program, which encourages the industry to
proactively self-identify and correct reliability issues.88 Finally, the standards development process can adapt
to emerging threats, as exhibited by continual revisions to cybersecurity standards89 and development of a
physical security standard for certain types of facilities.90
The Edison Electric Institute (EEI) “attribute(s) the increased transmission investment to…new technologies
for improved system reliability, development of new infrastructure to ease congestion, interconnection of
EL-22 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
new sources of generation (including renewable resources), and support for production of shale gas,” as
well as “improvements to integrate new resources and increase system hardening, resiliency, and security.”94
Distribution system additions from IOUs, as reported by EEI (2013 dollars) have risen from about $19.5 billion
(2013 dollars) in 1994 to about $20.1 billion in 2013.n, 95 EIA notes that distribution investments rose even as
U.S. electricity sales have decreased in 4 of the 5 years from 2009 to 2013.96
Regionally, transmission investment differs significantly, reflecting local circumstances. The California and
New England ISOs have had the most investment per megawatt of demand between 2008 and 2012—three to
four times the level in other regions around the country (see Table C-2). More recently, major transmission
build-outs are occurring in the Midwest (Midcontinent ISO) and middle South (Southwest Power Pool)
footprints. Analysis done for the Western Electricity Coordinating Council’s 10-year transmission plan
shows that sufficient transmission is being developed in the Western electricity interconnection to meet
all projected needs through 2024, including satisfying state RPS mandates.97 In 2005, the Texas legislature
enacted legislation that required the Texas Public Utilities Commission to identify “Competitive Renewable
Energy Zones” (CREZs) where wind generation can be built. In 2008, the commission designated five CREZs
and put in motion a $4.93-billion program to build 2,400 miles of new transmission by nine utilities, which
subsequently enabled approximately 18,500 MW of wind resources to be developed and moved from west
Texas to the Texas grid. The last of the seven CREZ transmission lines was energized in December 2013.98, 99
Table C-2. Analysis of Transmission Investment per Megawatt of Peak Demand from 2009 to 2013100
Regionally, transmission investment reflects different circumstances. Transmission investment in a region will also vary by years in a region, thus
this table would change if done in a different time period. In the table, the “Total US” line refers to averages over all regions in the table for that
particular year. Analysis is based on estimated total industry annual investment divided by peak demand in each year. Data for all regions is based on
annual investment by FERC Form 1 filers (estimated to represent 70 percent of total industry investment) grossed up to 100 percent of the industry
to reflect investment from electric cooperatives, public power, and Federal Power Marketing Administrations and the Tennessee Valley Authority.
Southwest Power Pool peak demand is based on reliability footprint. Annual investment values are in nominal dollars. Transmission development and
planning activity has been on the rise for over a decade, as is seen in Figure C-10.
n
The amount of $19.5 billion is inflation-adjusted to 2013 by using inflation factors from Handy-Whitman index of public
utility construction costs applied to 1994 distribution spending in “Table 9.1: Construction Expenditures for Transmission and
Distribution Years 1981 through 2010 Shareholder-Owned Electric Utilities” of “Construction Expenditure Data” at www.eei.org/
resourcesandmedia/industrydataanalysis/industrydata/Documents/Construction%20Expenditure%20Data.pdf.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-23
Appendix C: ELECTRICITY
12
10
0
1997 2000 2003 2006 2009 2012
Underground Lines and Devices Towers and Fixtures Overhead Lines and Devices Poles and Fixtures
Station Equipment Other
Spending on the various types of transmission infrastructure has been on the increase since the late 1990s.
Looking forward over the next several years, a high level of transmission investment is expected to replace
aging infrastructure, maintain system reliability, facilitate competitive wholesale power markets, and aid
regions in meeting their public policy objectives, such as GHG reduction and renewable energy goals.102
Figure C-11 shows circuit-miles constructed from 1960 through 2010, with projections to 2017.o Note that
Figure C-11’s circuit-miles constructed have gone up and down in the time period shown in Figure C-10. The
two figures are not contradictory, as Figure C-10 shows all types of transmission infrastructure spending, not
just that which results in new transmission line-miles.
Over the time horizon considered by the Quadrennial Energy Review (QER), it is not clear how much
future investment will be needed for new long-distance transmission versus other types of transmission
investments. Factors include future electricity demand growth trends; the amount of transmission necessary to
connect high-quality renewable energy resources to distant load centers; state and Federal incentives like the
production tax credit; and the costs of competing generation and demand-side resources. For renewables, an
additional variable is whether the costs and time of permitting of additional transmission facilities may lead to
the development of wind or solar resources that are of lower quality but closer to load. Nevertheless, there are a
number of long-distance interregional transmission lines now in various stages of market development.103, 104
o
The figure shows only transmission circuit-miles constructed, including the large interties built in earlier decades as the bulk power
grid became more interconnected and large amounts of new generation were added needing transmission. Transmission construction
also includes substations and other equipment (such as smart grid technologies), which is reflected in Figure C-10. At first glance,
differences between the two figures appear to be contradictory are due to the type of categories of transmission spending displayed.
EL-24 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Figure C-11. Historic and Projected Expansion of Transmission Circuit-Miles105
Circuit Miles
10,000
8,000
6,000
4,000
-2,000
60
65
70
75
80
85
90
95
00
05
10
15
19
19
19
19
19
19
19
19
20
20
20
20
[1]: EEI (>132kV) [2]: NERC (>200kV) [3]: Ventyx (>200kV)
Projected Transmission Additions from NERC under Form EIA-411 (>200kV)
Projected Transmission Additions from NERC under Form EIA-411 (all)
Looking forward over the next several years, a high level of transmission investment is expected to replace aging infrastructure, maintain system
reliability, facilitate competitive wholesale power markets, and aid regions in meeting their public policy objectives, such as GHG reduction and
renewable energy goals. Circuit-miles actually constructed in a year varies much more than total transmission infrastructure spending, which has had
an upward trend since the late 1990s, as shown for IOUs in Figure C-10.
Continued construction of natural gas-fired generation also has implications for transmission infrastructure
needs. Generally, new natural gas generation is being built closer to load centers and/or where existing
pipelines and transmission lines are often found, thus providing a reduced need for new transmission versus
if the new gas-fired generation was sited far from load. Local transmission upgrades may still be needed.
Actual transmission needs for new gas-fired generation will depend on varying local and regional existing
transmission topography.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-25
Appendix C: ELECTRICITY
In addition to the base case, 23 scenarios were analyzed to determine how factors like technology costs and
changing demand might affect national transmission needs. Under nearly all scenarios analyzed for the QER,
transmission needs through 2030 are roughly similar to those for the base case. Results of 10 illustrative
scenarios representing the greatest differentiation among transmission results are shown in Figure C-12. The
most differentiated scenario in this series is a bounding scenario that does not correspond to any current or
proposed program and that examined the impact of a combined set of outlier assumptions: accelerated nuclear
power plant retirements; 40 percent economy-wide GHG reductions in 2030, associated with a 60-percent
reduction in carbon dioxide from the electricity sector; high natural gas prices; and low costs for renewable
energy technologies. This outlier scenario suggests a dramatic shift in energy generation capacity where wind
and solar make up nearly one-third of the energy mix in 2030. While this DOE QER analysis outlier scenario
requires substantially more transmission than other scenarios in this analysis, the rate of modeled new
transmission investment needed even for this case is well within the range of higher historical and planned
near-term builds.
p
Base case assumptions were aligned with the Annual Energy Outlook 2014 Reference case. Source: Energy Information
Administration. “Annual Energy Outlook 2014.” April 2014. www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf. Accessed January 9,
2015.
q
The model provides a rough insight into needs for new transmission. One limitation is that the model only builds new transmission
along existing or proposed corridors. Local and regional reliability impacts of scenarios are thus not considered by the model. Such
impacts could be significant depending on the specific local and regional existing transmission architecture. Any reliability issues
would then need mitigation from new transmission, generation, and/or demand-side resources.
EL-26 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Figure C-12. Modeled National Transmission Expansion Needs Compared to Installed 2014 Capacity for the Annual
Energy Outlook 2014 Reference Case (QER Base Case) and 10 Scenarios107
million MWmi
Low Wind Cost 1.0
GHG Cap - Low Demand + RE Techs
GHG Cap - Reduced NG/Nuc + RE Techs 0.5
0.0
2012-2016 2018-2022 2024-2028
(historical) (projected) (projected)
Base Case
115%
Low Wind Cost
Low Solar Cost
High DG
High NG Prices
Transmission Capacity as % of 2014
High Demand
Low Demand
110% GHG Cap - Low Demand
GHG Cap - Low Demand + RE Techs
GHG Cap - Reduced NG/Nuc
GHG Cap - Reduced NG/
Nuc + RE Techs
105%
100%
2015 2020 2025 2030
For the modeled system, decreases in wind costs and GHG limitations produced the greatest need for transmission relative to the base case; but even for
those “high transmission” cases, 5-year transmission investment levels were not more than 5 percent greater than historical investment rates.
More broadly, the DOE-funded interconnection-wide studies undertaken in the Eastern Interconnection,
Western Interconnection, and the Electricity Reliability Council of Texas Interconnection (Texas), which
used a range of scenarios and futures to create advisory-only 10-, 15-, and/or 20-year transmission plans,
show results similar to those obtained by DOE analyses for the QER using the National Renewable Energy
Laboratory’s ReEDS model.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-27
Appendix C: ELECTRICITY
The United States has three electrical interconnections: the Western Interconnection, the Eastern Interconnection, and the
Electricity Reliability Council of Texas Interconnection (ERCOT).
The Department of Energy (DOE) awarded funds in 2009–2010 to five interconnection-wide groups under the American
Recovery and Reinvestment Act of 2009 (ARRA) for the purpose of conducting interconnection-wide transmission planning,
together with related resource planning and associated studies and analyses. Some grantees ended their use of DOE ARRA
funds in 2014, while others will end their ARRA funding in 2015.
One set of 2009 awards was made by DOE to state-based groups serving on an interconnection-wide basis. These state-based
groups were the Western Governors Association (which included its subsidiary body, the Western Interstate Energy Board, in its
work), the newly created Eastern Interconnection States Planning Council, and ERCOT. The state groups convened meetings for
discussions among themselves and sponsored studies and analyses on a wide variety of electricity issues of common interest,
not just limited to transmission planning.
A second set of 2009 awards went to three utility industry-based transmission planning organizations functioning on an
interconnection-wide basis: the new Eastern Interconnection Planning Collaborative, the Western Electricity Coordinating
Council, and ERCOT. These three groups used an open, transparent process over a several year period to create 10- and 20-
year transmission plans under a range of stakeholder-driven future scenarios.
While the three interconnection-wide transmission plans were only illustrative and informational and not executable blue
prints or roadmaps (only ERCOT’s was used for actual investment purposes), they did illustrate what transmission needs would
exist under a range of hypothetical technical and societal futures. One of the more significant conclusions reached in the
process (by the Western Electricity Coordinating Council) is as follows:
“The expected future [2022 for the Western Interconnection], based on the existing transmission plus the
Common Case Transmission Assumptions, appears to be adequate for the Western Interconnection to
meet its load and [State] Renewable Portfolio Standard requirements over the 10-year time frame under
2022 Common Case assumptions.”
The various personal contacts, tools and processes created, and studies and analyses conducted over a wide geographic
footprint have been recognized by the state, industry, and other participants as having great value.
Some evidence, such as the Texas experience discussion that follows, suggests that preemptively establishing
a transmission line can serve to facilitate remote generation development today, such as those renewables that
are remote from load. QER modeling shows that, under a national economic optimization, one form of lower-
carbon generation, renewable energy—including wind and solar—can be expanded dramatically without
much additional transmission investment beyond historical levels. However, the development of high-quality
renewable resources (e.g., wind in the Midwest) might benefit from support for new transmission lines to
load centers. The CREZ lines in Texas present one example where investment in new wind capacity followed
construction of a new transmission capacity. However, securing customers who are willing to sign long-term
electricity supply contracts is typically a prerequisite to obtaining investment in the transmission needed to
access remote renewable energy resources. Several competing transmission line proposals in the South and
West face challenges because they cannot yet secure power purchase agreements for the wind they would
deliver.
EL-28 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Impact of Nuclear Retirements on Transmission
A separate modeling analysis of the transmission system impacts of additional early nuclear shutdowns, also
done for the QER, showed limited need for large amounts of new transmission.r The analysis examined effects
of closing up to one-third of the U.S. reactor fleet by 2020. The scenario was designed to facilitate examination
of the potential impact on new transmission needs of an extreme level of nuclear closures; it was not intended
to be predictive. Indeed, many factors—such as expectations of increasing electricity prices, or local policy
decisions to maintain baseload generation—may provide sufficient revenue to keep at-risk reactors open.
Additional early nuclear shutdowns also would have other implications, such as increased carbon dioxide
emissions. Natural gas could be the dominant source for replacement and new electricity capacity, at least in
the short-run time frame assessed.109
A ReEDS modeling simulation done for the QER of the same nuclear retirement scenario shows relatively little
impact on the need for new major bulk transmission compared to the base case. Transmission requirements
are initially higher than the base case, as nuclear plants close through 2020. Over that time frame, many plants
are replaced by natural gas plants, especially where transmission is expensive, but in some regions, nuclear
plant closures are replaced by building transmission and taking advantage of additional low-cost electricity
generation capacity in other regions. After the accelerated closures end in 2020, transmission build-out tracks
with the base case.110
While it is unlikely that a relatively large number of nuclear plant closures will create major additional
transmission requirements, they do impact grid reliability at the local level—nuclear plants provide important
grid services such as voltage support. Despite the small influence of significant nuclear retirements on national
transmission needs, grid planners and operators, regulators, policymakers, and others will need to consider
local reliability and climate impacts of any additional nuclear plant closures, as well as any potential impacts on
distribution systems and some transmission lines at the regional level.
r
As with the overall QER modeling effort, this effort used ReEDs, which only builds new transmission along existing or proposed
corridors and does not consider local and regional reliability impacts of scenarios.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-29
Appendix C: ELECTRICITY
Transmission projects can take more than a decade to reach operation and have high upfront capital costs.
While a number of cost-recovery schemes are available, the incentive to build transmission rests on the fact
that, relative to many other investments, transmission assets can provide long-term and stable returns—
something that cannot be ensured elsewhere in a dynamic economy and technological environment. For
example, American Electric Power—one of the Nation’s largest electric utilities (and a large owner of both
generation and transmission)—now has a strategy of not building new power plants, retiring power plants, and
expanding its transmission network, which totals more than 39,000 circuit-miles that cross through 11 states,
to provide reliable financial returns at a time when the industry’s main sources of income (traditionally power
generation) are flat.114
New builds (or “line upgrades”) historically have come in two varieties: reliability upgrades and economic
upgrades. Either can be proposed by incumbent transmission owners (typically electric utilities), or by
newer market entrants that are transmission-only companies (sometimes called “transcos” or “merchant
transmission”). When built to comply with reliability standards, a new line is called a “reliability upgrade”
project. “Economic upgrades” connect new generation to load centers or reduce power system costs by more
than the cost of the line. Such lines typically are built to ease or avoid congestion charges.115 A transmission
line may also be justified as a mix of these two categories. Due to the nature of electricity flows on a bulk power
network, compartmentalizing the benefits between economic and reliability improvements can be difficult.116
The difficulty of linking thousands of power generation plants with transmission lines into one cohesive,
reliable, and economic operating unit is just one example of the complexity of managing the grid. Because of
this complexity, new transmission construction requires extensive technical and environmental planning. The
nature of that planning process is partially defined by the ownership structure of the local utility or operator,
regional customs, and now (increasingly) oversight by FERC. States also have jurisdiction over transmission,
most notably over the siting of transmission lines on either private or state-owned land. FERC does have
“backstop” transmission siting authority, which was conveyed to the commission by the Energy Policy Act of
2005; however, in part stemming from the Fourth Circuit decision noted earlier, FERC has never used this
authority.
Electrical TS&D ownership comes in many forms. In 2014, the dominant model for transmission was still the
vertically integrated IOU. However, groups of smaller public power utilities and rural electric cooperatives
can also develop and own transmission through creation of a “joint action agency” or a “generation and
transmission cooperative,” respectively. The Federal Government can develop and own transmission
projects through the Bonneville Power Administration, Western Area Power Administration, Tennessee
Valley Authority, and Southwestern Power Administration. A more recent development is the emergence
of independent and merchant transmission companies that develop and own transmission, but own no
distribution or generation resources.s These companies often seek to build long-distance transmission lines
that traverse more than one state.
All of these entities are subject to regulatory approval processes should they want to develop and site
new transmission projects. Ownership has a direct effect on the regulatory regime applied to various
transmission projects. For instance, publicly owned electric utilities (including the Federal Power Marketing
Administrations and Tennessee Valley Authority) and almost all rural electric cooperatives generally are not
subject to FERC’s jurisdiction over transmission rates and planning—this means that they are not subject to
FERC’s planning and cost-allocation rules, so long as they act alone.
s
Examples include American Transmission Company, International Transmission Company, Transmission Developers Inc., LS Power,
Transource Energy, and Clean Line Energy Partners, among others.
EL-30 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Impact of FERC Order No. 1000 on Transmission Planning
FERC—under the Federal Power Act—regulates rates, terms, and conditions of service for transmission of
electricity in interstate commerce. Courts have upheld that, based on the physics of the electric grid, this
FERC authority applies to transmission facilities that do not cross a state boundary, if those facilities are part
of the interstate transmission grid. One of FERC’s most significant recent rulemakings is FERC Order No.
1000 (2011), which, among other actions, requires transmission providers subject to FERC jurisdiction to
participate in a regional transmission planning process that meets certain minimum requirements.117 For
example, FERC Order No. 1000 requires those transmission providers to participate in a regional transmission
planning process that has a regional cost-allocation method for new transmission facilities selected in the
regional transmission plan for purposes of cost allocation. The method must satisfy six regional cost-allocation
principles:
• Costs allocated must be “roughly commensurate” with estimated benefits
• Those who do not benefit from transmission do not have to pay for it
• Benefit‐to‐cost thresholds must not exclude projects with significant net benefits
• No allocation of costs outside a region unless the other region agrees
• Cost-allocation methods and identification of beneficiaries must be transparent
• Different allocation methods could apply to different types of transmission facilities.118
Transmission planning regions also are required to establish procedures for coordinating with neighboring
planning regions, particularly to account for proposed projects that would be located in both regions.
FERC Order No. 1000 also requires each pair of neighboring transmission planning regions to develop an
interregional cost-allocation method for new interregional transmission facilities.
Several Western Interconnection states—individually, as well as jointly with all of their fellow Western
states through the Western Governors’ Association—have studied renewable energy zones with the aim of
consolidating transmission development. This work has fed into long-term transmission planning conducted
by the Western Electricity Coordinating Council, the California ISO, and individual utilities.123, 124 California
ISO’s 2013 transmission plan, for example, identifies 41 projects at an estimated cost of $1.75 billion that would
maintain reliability, meet the state’s renewable energy mandate, and deliver other economic benefits.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-31
Appendix C: ELECTRICITY
Transmission planning for large-scale renewable expansion in the Eastern Interconnection includes work done
by the Southwest Power Pool and Midcontinent ISO, whose territories include some of the most productive
wind areas in the country. In 2010, Midcontinent ISO identified a number of wind development zones in
the northern Great Plains that have since guided transmission planning. It estimates that its plans had saved
customers more than $1.2 billion in projected annual costs, while at the same time enabling 41 terawatt-hours
of wind energy per year.125 Southwest Power Pool’s most recent 20-year transmission plan identifies $845 million
in projects that would provide an estimated $1.5 billion in benefits and would enable up to 9,000 MW of wind
development.126
Today, transmission planning to integrate renewables is seldom a stand-alone exercise. Many of the largest
and more recent plans simultaneously address renewable energy integration in conjunction with other
planning objectives, such as reliability, congestion, and connecting other new generation. DOE awarded
$80 million in ARRA funding for the purpose of facilitating the development of regional transmission plans,
building on foundational work done in the Western, Eastern, and Texas Interconnections. Each interconnection-
wide effort had a technical component—led by that interconnection’s transmission grid planners and operators—
that examined (along with other generation and demand-side issues and scenarios) reliable delivery of least-
cost renewables to major demand centers, and a policy component examining issues that could be facilitated
by regulatory coordination. In addition to the detailed engineering studies, plans, and white papers, the
interconnection-wide groups have gone beyond their original ARRA funding and continue to serve as venues for
regulatory and technical collaboration.t The Administration has put a number of measures in place to support the
development of transmission lines for renewable energy that are summarized in the main QER report.
Distribution
Role and Physical Characteristics of System
Distribution is the delivery of power from the transmission system to the end users of electricity. There are
about 6.3 million miles of distribution lines.127 Distribution substations connect to the transmission system
and lower the transmission voltage to medium voltage. This medium-voltage power is carried on primary
distribution lines, and after distribution transformers again lower the voltage, secondary distribution lines
carry the power to customers who are connected to the secondary lines (larger industrial customers may
be connected directly at the primary distribution level). The poles supporting distribution lines, meters
measuring usage, and related support systems are also considered to be part of the distribution system. EEI
estimates that $275 billion has been invested in the United States’ distribution system by its member utilities
since 2000.128 EEI’s most recent survey of T&D spending by member utilities gave $20.8 billion for distribution
in 2013—a 3.5-percent increase over 2012’s $20.1 billion. EEI stated that “[t]he increased distribution level
capital expenditures were largely linked to storm hardening and improved system reliability, including
undergrounding infrastructure.”129
t
Some of the interconnection-wide groups (i.e., the Electric Reliability Council of Texas, the Western Electricity Coordinating
Council, and the Western Governors’ Association and its related Western Interstate Energy Board) existed before ARRA funding.
These groups used the ARRA funding to greatly expand and modernize their efforts with the latest tools and information, while the
Eastern Interconnection Planning Collaborative and Eastern Interconnection States Planning Council were created as a result of the
ARRA funding.
EL-32 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Physical Distribution System Vulnerabilities
Aging Equipment
A survey of more than 500 utility professionals across the country revealed that “old infrastructure” is the most
common concern.130 The American Society of Civil Engineers in 2013 gave the Nation’s energy infrastructure
a grade of D+, citing an aging electrical grid and distribution facilities that have resulted in an increasing
number of power disruptions.131 However, concern over age is not universally shared,132 with the counterpoint
being that equipment can be and has been continually updated and maintained until economics indicate that
replacement is more prudent.
Disturbances
As with the transmission system, the distribution system experiences a wide variety of natural disturbances,
such as lightning, wind, ice, animals, and trees. Other disturbances include human-related contact, damage
to distribution structures, and equipment failure. As opposed to transmission, where network redundancy
virtually eliminates outages from a single failure, distribution outages are more likely to lead to customer
interruptions than are transmission outages. While efforts to collect comprehensive, comparable nationwide
data are still under development, initial reviews of reported metrics shows wide variations in outage rates and
causes.
The causes for distribution outages can vary significantly depending on the location of the circuit and the time
of year. For example, a single utility may experience predominantly tree-related outages on one circuit and
wind-related outages on a neighboring circuit.133 Lightning may be a consistent cause during some months but
not others.134 Figure C-13 shows a sampling of reported end-user reliability metrics from utilities across the
country. These graphs illustrate both the diversity of outage causes and the differences in reporting definitions.
While some analyses have found a statistically significant trend in distribution reliability over time, the
magnitude of this trend is small compared to year-to-year changes.135 The directionality of the trend can also
change depending on the window selected for the analysis.136
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-33
Appendix C: ELECTRICITY
Figure C-13. Sample of Reported Causes of Outages to End Users from Selected Distribution Utilities137
80% 80%
100% 100%
90% Public, other 90% Customer Equip
Small Animal/Bird Error
SAIFI Proportion by Cause
80% 80%
Wind, not trees Overload
Interruptions by Cause
70% 70%
Cause Unkown Prearranged
60% Tree Growth 60% Lighting
50% Power Supply 50% Unknown
40% Material or equip. 40% Accident
30% Planned/Maint. 30% Tree
Out R/W trees Equipment
20% 20%
Ice, Sleet, not tree
10% 10%
0% 0%
Utility in Illinois
100%
90% Transmission & Sub
Unknown
SAIFI Proportion by Cause
80%
Other
70%
Animal Related
60% Public
50% Intentional
40% Overhead Equip.
30% Human Errors
UG/Equipment
20%
Weather Related
10%
Tree Related
0%
This figure shows a sampling of reported end-user metrics, such as the System Average Interruption Frequency Index (SAIFI), from various utilities
illustrating both the diversity of outage causes and the differences in reporting definitions. Definitions of outage causes vary from utility to utility;
hence, the keys are slightly different for each state utility bar. The data may not include the entire utility service territory and does not cover the same
time period.
EL-34 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Distribution reliability is regulated by state utility commissions, or by locally appointed or elected boards for
cooperatively owned and publicly owned utilities not regulated by state utility commissions. Most, but not
all, states require their utilities to report customer interruption metrics.138 Cause categories can be defined
by the state commission or the utility, with little uniformity across states. EIA does collect information on
outage statistics, but does not record causes.139 The Institute of Electrical and Electronics Engineers (IEEE)
is standardizing calculation methods and definitions for distribution statistics through standard IEEE 1366-
2003/2012, as well as undertaking a voluntary benchmarking effort to improve the quality of distribution
reliability data.140 The lack of uniform national data prevents more sophisticated analysis of macro trends in
distribution reliability.
Distribution utilities have pursued a wide variety of options to reduce system vulnerabilities. Anecdotally,
distribution utilities appear to be implementing distribution automation, fault analysis, and outage
management systems to identify and correct problems.141 These systems can then be used as the basis for
additional corrective programs, such as enhanced vegetation management or proactive maintenance. Many
utilities also have pursued physical hardening investments, such as placing circuits underground (at additional
cost). For example, utilities and utility commissions in the District of Columbia, Maryland, New Jersey, and
New York have evaluated and selectively approved resiliency investments following recent major storms.142
Current resource adequacy requirements at the bulk power level are usually based on “1-day-in-10-year” loss
of load probability standard. For the distribution system, however, it is difficult to pin down specific measures
of reserve reliability, and assessing the appropriate level of reliability and investment requires nuanced analysis.
Utilities often compare the cost of incremental investments in reliability against historic response of their
customers to outages and benchmark against other utilities. Recently, some utilities that have sought to make
major investments in distribution reliability and resiliency have been asked by regulators to estimate economic
benefit measures of the avoided customer outage costs. Some economists have applied the “value of lost load”
concept as a means of quantifying benefits.
Using value of lost load to measure benefits is still being tested; as a result, there currently is no common
industry standard. Most value of lost load assessments use customer surveys to estimate the value that
customers place on reliability (“willingness to pay”). Better information on costs and benefits of particular
hardening actions, as well as better metrics of resilience, would greatly improve utility and state-level decision
making on hardening investments.
The most common practice by which regulated utilities recover costs is through a general rate case, where a
utility seeks to change rates based on changes in operational expenses or new plant additions. If the utility
incurs costs that are unanticipated in the design of rates, then it must defer those costs for recovery after it
has another rate case, or pursue an alternative regulatory path for rate recovery. Regulators and utilities have
developed alternative approaches to allow cost recovery for unanticipated costs, including cost deferral, rate
adjustment mechanisms, formula rates, and storm reserve accounts.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-35
Appendix C: ELECTRICITY
The increasing economic losses from storms have motivated changes to regulatory frameworks to incentivize
improvements in reliability and resiliency to storm events. These changes have taken several forms, including
performance-based formula rates, with annual reconciliation of resilience capital expenditures (for example, in
Illinois); incorporating anticipated resilience expenditures in rates before the investment is made (for example,
in Maryland); and performance standards for emergency preparation and restoration of utility service that are
accompanied by financial penalties for non-compliance (for example, in Massachusetts).143
Many are integrating at least some of these new products and services into the grid, with more work to be done
on deployment, as the products, services, and technologies evolve and become increasingly cost effective.149
Integrating all the new pieces into the existing grid can be a technical and economic challenge and opportunity
that will vary depending on local and regional circumstances.
u
PMUs operate by the simultaneous measurement and comparison of an important electrical property of large-scale alternating
current transmission networks known as “phasor angles”—thus the name “phasor measurement units.” Only today’s very fast
computing and communications technologies now allow such real-time grid monitoring to occur, thus providing valuable real-time
early warning of potential grid problems over very large geographic regions when the technology is fully deployed and related tools to
use the information are implemented.
EL-36 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Distribution Automation
For distribution systems, distribution automation projects funded under ARRA have reported improvements
in system average interruption frequency index (a metric of distribution reliability) of 11–49 percent.
Automated feeder switching reduces the frequency of outages, customers affected, and minutes interrupted.
Fault Detection, Isolation and Service Restoration systems can increase circuit loading limits by 50 percent
without a decrease in reliability, sometimes removing the need to construct an additional circuit.154 Rural areas
with long feeders and low population densities may especially benefit from distribution automation that can
identify locations of outages.
At its most basic level, AMI is used to reduce labor, truck, fuel, and data collection operational costs associated
with manual meter reading. When appropriately equipped, smart meters also enable remote connect and
disconnect using the distribution system, reducing operating costs. During outages, smart meters help to more
quickly locate the outage and those that are remotely reconnected, which both reduce distribution outage time.
AMI can be enable customers to access information on their energy use in real time or near-real time. Some
customers who have chosen AMI-enabled variable rates have achieved energy consumption reductions
exceeding 30 percent during short periods.155 Such demand response provides system operators multiple
benefits, including reduced demand (which is particularly valuable during peaks where generation costs are
rising) and potentially increased system flexibility. AMI can facilitate new pricing schemes, such as time-of-use
or other forms of time-varying pricing, which has been demonstrated to reduce peak demand in excess of
30 percent. However, using AMI for customer-focused uses is in the early stages, with most benefits to date
from AMI being in improving utility operations.
v
Black starts are accomplished when certain types of power plants are down and an area-wide blackout prevents their restart, which
would normally occur by drawing power from the grid. To provide a black start, some power stations have small diesel generators,
normally called the black start diesel generators, which can be used to start larger generators (of several megawatts capacity), which
in turn can be used to start the main power station generators at the large power plant.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-37
Appendix C: ELECTRICITY
Most distribution systems have accommodated the modest number of distributed systems connected to date,
but some utilities (e.g., in California, and Hawaii) face operational issues associated with significantly higher
levels of distributed photovoltaic generation behind meters.w
Interoperability
Interoperability is the ability of systems and devices to work together easily and effectively. Interoperability
creates the seamless, end-to-end connectivity of hardware and software—from the customers’ appliances, all
the way through the T&D system, to the power source. If successful, it enhances the coordination of energy
flows with real-time flows of information and analysis. Not only does a lack of interoperability hinder further
deployment of the smart grid, enhanced interoperability could lead to estimated savings for the electricity
industry from about $3.5 billion to about $10 billion per year.158
Security
While smart grid technology can make the electric system more robust, it has the potential to make the grid
more prone to cyber threats. The more extensive the interconnections and interdependencies, the greater the
potential damage from cyber threats. While the QER does not extensively review the impacts of cyber activity,
a variety of other government-wide efforts, led by the Department of Homeland Security, are developing policy
recommendations and in-depth analysis on this issue. While cyber threats may increase risk, and various
elements of new smart grid technologies can impose costs and operational constraints, grid reliability can be
improved through smart grid applications.
Costs
Emerging technologies pose new challenges. Often, their costs are uncertain or higher than the systems they
replace, causing concern about the impact on rates. However, many new technologies also have the potential
to provide more or better functionality (e.g., more reliable or cleaner electricity) than older technologies and
therefore more benefits.
w
There are several different measures of “penetration.” “Meter penetration” is a measure of how many customers, or meters, have
distributed generation on a circuit or line section (defined as total meters with distributed generation divided by total meters on
circuit or line section). “Capacity penetration” is common, but a less useful metric; it is defined as the total distributed generation
capacity divided by the total circuit capacity. While there is no formulaic way to describe the impact of distributed generation
penetration, it is recognized by industry experts that a small number of distributed generation on a circuit likely will cause no
discernible problems, while larger numbers and larger sizes of distributed generation, at longer distances from the substation, will
create numerous challenges in a non-linear manner.
EL-38 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Net Metering
Net metering is a system for paying for generation located on customer facilities. Currently, 43 states have Net Energy
Metering (NEM) programs that allow the sale of customer-generated power back to the utility under terms determined by
regulators. The most common type of NEM customer today owns or leases a rooftop photovoltaic system; however, current
regulations often also apply to other distributed energy technologies, such as gas-fired turbines and combined heat and
power. The utility typically pays the NEM customer at retail rates for electricity sold to the grid, with limits on the total sales
over a specified period (typically 1 year).
With rapid solar photovoltaic market penetration, controversies among utilities, consumer groups, solar businesses, and other
stakeholders have arisen in several states, placing pressure on legislators and regulators to understand conflicting positions
and analyses supporting them. Some argue that NEM customers are providing benefits to the system, which justify NEM retail
rates, and, in some cases, additional benefits for which they are not compensated. They also argue that NEM customers are
providing environmental, jobs, and other local public benefits that should be recognized. Some raise concerns about NEM
customers benefiting from grid services without paying the full cost of such services. Some further note that if NEM customers
fail to pay for the full cost of the grid services, non-NEM customers are cross-subsidizing the NEM customers. The resolution
of these issues must address the potential for stranded assets on the consumer and the utility, as well as the value of services
provided by both.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-39
Appendix C: ELECTRICITY
Table C-3. Taxonomy of Entities within the Electric Utility Sector, with Examples162
The diversity of ownership structures and asset sectors can be considered a strength of the United States, as it gives us one of the world’s most
reliable, affordable, and increasingly clean ways of providing the basic need of electricity, as well as results in innovative approaches. Such diversity
often precludes one-size-fits-all policies.
For decades, the traditional large utility was vertically integrated. It sought to increase demand from customers
and to build generation, transmission, and distribution infrastructure to serve that demand. For much of the
industry’s early history, the provision of electric service exhibited natural monopoly characteristics—that is,
it was less costly for a single entity to serve load in a particular area than multiple entities. The expansion and
consolidation of utilities into larger utilities and, ultimately—in some parts of the United States—utilities
joining power pools and ISOs/RTOs was driven by economies in the provision of service.
The diversity of entities that own and operate the grid leads to a complex set of motivations and decision
drivers. The reliable operation of the grid is a testament to the harmonization of these different interests.
Essentially, there are five different ownership types: (1) investor owned; (2) cooperatively owned, owned by
their member customers; (3) publicly owned (i.e., municipal, state, utility districts, irrigation districts, and
joint action agencies); (4) Federally owned; and (5) merchant companies that are competitive entities in
generation, transmission, or retail supply. Each ownership pattern engenders different interests in performance
of service, investment, and market structure.
EL-40 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Regulated entities that earn profit based upon a return on invested capital are motivated to provide service
through capital-intensive options and lack a strong incentive (absent explicit requirements or incentives) to
invest in energy efficiency or other practices that do not involve electricity sales or large capital expenditures.
Public power and cooperative utilities are motivated to keep customers’ bills down. Merchant generators,
whose profits are the residual revenues after expenses are paid, are motivated to maximize returns in the
context of FERC-regulated wholesale markets. Federal Power Marketing Administrations (Bonneville,
Western, Southwestern, and Southeastern Power Administrations) and Tennessee Valley Authority must follow
the dictates of their enabling Federal laws in the way they provide services to customers. They are service-
oriented public bodies that do not seek to make a profit, but they must cover their costs and multi-purpose
mandates of their enabling laws.
The RTOs/ISOs are organizations, operated similarly to nonprofits, that provide transmission and related
wholesale bulk power-level services in interstate commerce. RTOs/ISOs do not own transmission facilities,
but rather provide service over transmission facilities that are owned by their member utilities and for which
those utilities have transferred operational control to the RTO/ISO. RTOs/ISOs also administer competitive
centralized wholesale markets for electricity (and, in some regions, generation capacity and some ancillary
services) in their footprints. RTOs/ISOs have no financial interest in the resulting market prices, but must
ensure such prices result from adherence to tariff mechanisms that have been approved by FERC as just and
reasonable and not unduly discriminatory or preferential. Among other things, RTOs/ISOs also engage in
region-wide transmission planning.
As the distribution system evolves with increased distributed generation, responsive demand, and two-way
power flows, industry and regulators have begun to consider whether a distribution-level analog to the ISO
(a Distribution System Operator) is needed to help coordinate the increasing complexity of distribution-level
operations. On the other hand, poor economies of scale for the many small or smaller distribution utilities, as
compared to the rather large ISOs/RTOs, can argue against a separate Distribution System Operator solution.
The structure of the electric utility industry has important implications for the resolution of four major
issues now facing the industry: (1) conditions under which utilities provide energy efficiency services, (2) the
relationship of the utilities to the provision of distributed energy resources, (3) the ability of electric utilities to
recover costs of improving resilience, and (4) the structure of the distribution utility.
Two common themes apply to all four issues—how the element will be priced and recovered in rates and
clarification of the role of the utility. The discussion that follows on energy efficiency measurement and service
valuation offers areas where additional analysis and tools can help guide this evolution.
Energy Efficiency
Under the traditional IOU regulatory model, IOUs benefit most directly from an increasing asset base
(which can occur as a result of load growth), rather than from reducing demand through energy efficiency.
Recognizing that in many cases energy efficiency is the least-cost method of serving customers’ electric service
requirements or achieving emission reduction targets, the state regulatory community has sought to overcome
financial disincentives for utility energy efficiency programs financed by ratepayers. Cost recovery, addressing
what is known as the “throughput incentive,” and performance incentives are the three foundations for
implementing effective ratepayer-funded energy efficiency. These are commonly implemented through three
major regulatory approaches: decoupling, lost revenue adjustment mechanisms, and a broad set of measures to
allow performance incentives (see Figure C-14).
The role of the utility in providing energy efficiency services varies, in part as a function of whether IOUs are
permitted to own the equipment and provide the service for implementing energy efficiency, or—as in some
states—whether revenues used for energy efficiency services are provided through customer funding of state-
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-41
Appendix C: ELECTRICITY
run programs. In one case, the utility might see energy efficiency as a business opportunity—in the other, as
a pass through for third parties. This incentive problem can be less of an issue for publicly owned utilities and
cooperatively owned utilities, which have a broader mandate to provide different services and are both not-
for-profit organizations. These utilities are primarily concerned about their ability to recover costs and provide
the lowest-cost service to their customers; because both entities are directly responsible for the design of their
rates, they are free to design rates that enable cost recovery. However, costs sunk into capital assets—such as
generation, transmission, or distribution—may still pose barriers to energy efficiency for public power and
rural electric cooperatives, as those costs must be recovered.
Figure C-14. State Regulatory Approaches Encouraging Ratepayer-Funded Energy Efficiency to Address Utility
Business Model Concerns163
Thirty-six states have adopted one of three regulatory approaches to promote utility investment in energy efficiency: decoupling, lost-revenue
adjustment mechanisms (LRAM), or performance incentives.
The evaluation, measurement, and verification of energy efficiency savings will become increasingly important
as efficiency becomes more used as a utility resource. Many entities have made progress toward standardizing
the evaluation of energy efficiency. These methods can help regulators understand the opportunities energy
efficiency creates for infrastructure avoidance.
Ratepayer-funded efficiency programs run by utilities and third parties, as well as energy service company
efficiency programs and other non-utility efficiency programs, have achieved significant energy savings over
the last three decades.164, 165 These programs were developed in different ways across the country, and there
are different approaches used for measuring and verifying savings. While inconsistencies can complicate
EL-42 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
efforts to compare measured savings across jurisdictions, a number of important standardization efforts have
emerged in recent years at the state and regional levels that have started to address these issues. These include
efforts led by the Northwest Regional Technical Forum and the Northeast Energy Efficiency Partnership
that include development of regional databases of energy savings.166, 167 Building on this momentum, DOE’s
voluntary Uniform Methods Project for Determining Energy Efficiency Program Savings has connected policy
stakeholders and technical experts over the last 3 years.
Resilience
Essentially, investment to improve resilience is an insurance policy for ratepayers. The purpose is to minimize
damage, not to expand services. The daily use by customers will not be affected by resilience investments,
but these investments potentially are costly. Utilities of all sorts, including investor owned, publicly owned,
and cooperatively owned, and their regulators evaluate how to make systems more resilient without overly
burdening ratepayers.
Ratepayers can be made better off by reducing the cost of financing resilience investments. There are a variety
of vehicles for doing so. For example, Washington, D.C., is pursuing undergrounding of parts of its distribution
system to withstand extreme storms through a variety of ratepayer and non-ratepayer city financing. Capital
costs themselves are reduced through a variety of financial instruments, including securitization—where a
dedicated revenue stream is developed to pay for the asset, thereby improving the credit quality of the debt.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-43
Appendix C: ELECTRICITY
Transactive energy refers to the concept of using all of the intelligent devices in the electric grid, from the consumer level to
the bulk power level, and giving them price signals that vary with time. The desired result of dissemination of price signal
information is a more optimal allocation of resources for the benefit of all. In a sense, traditional price-responsive demand-side
programs that have been used by industrial, commercial, and some residential customers can be said to be transactive energy.
However, the newer form of transactive energy promises to engage the demand side of electricity use in new ways that have
become available due to the emergence of a plethora of information technology-enabled devices—commonly called the smart
grid. Sometimes this concept is more simply described as “prices to devices.”x
The roots of the transactive energy concept can be traced to a Department of Energy-funded pilot program started in 2006
in Washington State’s Olympic Peninsula by Pacific Northwest National Laboratory. This pilot program allowed electricity
customers along a distribution feeder to participate in an artificial electricity market run by Pacific Northwest National
Laboratory computers that included both load (such as appliances outfitted with communication devices) and generation.y
Market forces were shown to be able to generate a time-changing price signal that would control loads during peak times to
delay an upgrade to the overloaded distribution feeder.
A simple explanation to a concept that can be complex to describe is, “[i]t’s basically leveraging the communication and the
smart (functions) on some of the devices, the embedded microprocessors on the devices, to enable these things. Like your hot
water heater (being) able to communicate to a smart meter which is getting the price signal that’s flowing down through the
system. You might say, for the next five minutes, ‘I really don’t need my water that hot and I could earn a little money if I could
back it off by a couple of degrees.’ So it’s leveraging that communication and local decision making in ways we could never do
before until we had some of these devices.”z
Outside of pilot programs, transactive energy, in its advanced form, is still just a concept. Mass adoption of transactive energy
would require a number of coincident events: further development of many device protocols and standards; widespread
purchase of information technology-enabled devices by consumers; customer participation; addressing of privacy concerns;
and finally, electricity regulators must allow time-sensitive prices to be charged to consumers. Some or all of these factors
may have many anticipated and unanticipated social and economic consequences to weigh. Still, as technology marches on
and allows more and more intelligent devices to exist on the many parts of the grid, the concept of transactive energy bears
watching, as well as consideration.
x
GridWise Architecture Council. “Transactive Energy.” http://www.gridwiseac.org/about/transactive_energy.aspx.
Accessed February 6, 2015.
y
Hammerstrom, D.J. et al. “Pacific Northwest GridWise™ Testbed Demonstration Projects, Part I. Olympic Peninsula Project.”
PNNL-17167. April 2007. http://www.pnl.gov/main/publications/external/technical_reports/PNNL-17167.pdf. Accessed
February 9, 2015.
z
Giegerich, A. “What’s transactive energy? PNNL’s Carl Imhoff fills in the blanks.” Portland Business Journal. May 23, 2013.
http://www.bizjournals.com/portland/blog/sbo/2013/05/whats-transactive-energy-pnnls-carl.html. Accessed February 9,
2015.
It is illustrative to examine “ancillary services,” which are services that ensure reliability of the grid.168 Types of
ancillary services can include ramping, local reserve requirements, voltage support, and frequency support—all of
which are furnished by a combination of generation, transmission, and demand-side facilities. Ultimately, the system
operator is responsible for ensuring that there are adequate ancillary services at all times to maintain reliability.
EL-44 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Ancillary services have typically been provided by conventional power plants with large spinning turbines
running at less than maximum capacity. These resources are now being retired due to a number of factors
ranging from economics to policy. Additionally, some regions are seeing significant amounts of wind and solar
generation, which are not normally operated in a manner to provide ancillary services. Both NERC and FERC
have stressed the need to maintain essential ancillary services for bulk power operations as the resource mix
changes.aa, 169 As the grid continues to evolve, system planners and grid operators will need to adjust to also
using other technologies that can also help maintain system stability and reliability. These technologies range
from energy storage, demand response, and power electronics added to both the grid and generators without
large spinning turbines, to other technological approaches.
New payments, or changes to any existing payment method, to generation owners or other providers may
be necessary to ensure continued provision of needed ancillary services. Most ancillary services have well-
developed valuation methods. However, only some ancillary services have well-developed markets. For
example, voltage control (also known as reactive power) receives a cost-based payment in some regions, while
other regions require reactive power capability as part of good utility practice (i.e., without compensation).
No regions currently use competitive solicitations to procure and price reactive power service.170 Frequency
response is another ancillary service that can be unvalued or undervalued. While thermal generators
historically provided ancillary services in conjunction with energy (hence the name “ancillary”), new
technologies, such as energy storage, demand response, power electronics, or other technological approaches,
can also provide these services discretely.
aa
Statements by FERC commissioners and various FERC rulemakings and decisions make clear the importance to FERC of
maintaining reliability through use of sufficient ancillary services as the generation mix continues to evolve with retirement of
traditional generation and use of more variable generation (i.e., wind and solar).
In the United States, plug-in electric vehicles represent about 0.1 percent of light-duty vehicles on the road, but 0.7 percent of
new light-duty vehicle sales.ab Annual sales have increased since plug-in electric vehicles were reintroduced in 2010. Electric
vehicle service equipment installations have also grown, with public charging stations increasing from fewer than 600 in 2010
ac
to almost 20,000 by the end of 2013. New infrastructure needs will occur should future sales of electric vehicles become
significant and widespread. A refueling infrastructure that can provide for a growing number of electric vehicles will require
millions of residential charging stations and a large network of public charging stations, as well as some upgrading of the
electric grid—especially the low-voltage distribution network.
Deployment of residential charging stations in rural and suburban areas is relatively straightforward because a large
ad
proportion of dwelling units are capable of co-locating vehicle parking and electrical access at moderate cost. In urban areas,
developing successful residential charging networks may be more difficult to achieve because fewer residencies have a garage
ae
or assigned parking place.
ab
Argonne National Laboratory. “Light Duty Electric Drive Vehicles Monthly Sales Updates.” 2014. http://www.transportation.
anl.gov/technology_analysis/edrive_vehicle_monthly_sales.html. Accessed January 16, 2015.
ac
Alternative Fuels Data Center. “Alternative Fueling Stations by State.” Department of Energy. 2014. http://www.afdc.energy.
gov/fuels/stations_counts.html. Accessed January 16, 2015.
ad
Vyas, A. et al. “Plug-in hybrid electric vehicles: How does one determine their potential for reducing US oil dependence.”
Proceedings of the Electric Vehicle Symposium. 23(2–5). 2007. http://www.transportation.anl.gov/pdfs/HV/462.pdf.
Accessed January 16, 2015.
ae
California Plug-in Electric Vehicle Collaborative. “Plug-in Electric Vehicle Charging Infrastructure Guidelines for Multi-unit
Dwellings.” 2013. http://www.pevcollaborative.org/sites/all/themes/pev/files/docs/MUD_Guidelines4web.pdf. Accessed
January 16, 2015.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-45
Appendix C: ELECTRICITY
Infrastructure needs are especially crucial for battery-electric vehicles, which only run on electricity, as compared to plug-in
hybrid electric vehicles, which can run on electricity or gasoline. However, the business model for public stations is difficult, as
ag
installation costs will be high,af and home charging may keep utilization rates low even as electric vehicle adoption increases.
The extent and timing of electric vehicle impacts on the electric grid will be driven by various factors, including local/regional
consumer acceptance, battery technology developments, and the rollout of the charging infrastructure. On the bulk power
system, smart grid investments can allow the shifting of recharging to off-peak periods and the avoidance of building
new generation to meet recharging demand.ah On the distribution system, equipment upgrades can help facilitate further
deployment of electric vehicles, including local distribution substations and feeders.ai Further, smart grid enhancements may
allow electric vehicles to provide ancillary services to the grid. In each case, utilities and regulators will need to determine how
to distribute the cost (e.g., upfront installation) and benefits (e.g., value of ancillary services) of grid infrastructure upgrades.
af
Gerkensmeyer C., M. Kintner-Meyer and J.G. DeSteese. “Technical Challenges of Plug-In Hybrid Electric Vehicles and
Impacts to the US Power System: Distribution System Analysis.” January 2010. http://www.pnl.gov/main/publications/
external/technical_reports/PNNL-19165.pdf. Accessed January 16, 2015.
ag
Gerkensmeyer C., M. Kintner-Meyer, and J.G. DeSteese. “Technical Challenges of Plug-In Hybrid Electric Vehicles and
Impacts to the US Power System: Distribution System Analysis.” January 2010. http://www.pnl.gov/main/publications/
external/technical_reports/PNNL-19165.pdf. Accessed January 16, 2015.
ah
Hadley, S.W. “Impact of Plug-in Hybrid Vehicles on the Electric Grid.” October 2006. http://web.ornl.gov/info/ornlreview/
v40_2_07/2007_plug-in_paper.pdf. Accessed January 16, 2015.
ai
Gerkensmeyer C., M. Kintner-Meyer and J.G. DeSteese. “Technical Challenges of Plug-In Hybrid Electric Vehicles and
Impacts to the US Power System: Distribution System Analysis.” January 2010. http://www.pnl.gov/main/publications/
external/technical_reports/PNNL-19165.pdf. Accessed January 16, 2015.
Regulators and policymakers are responding to the operational issues and capabilities associated with new
technologies. They also seek to address longer-term concerns, such as how the loss of revenue resulting from
increasing numbers of some distributed energy resource installations and resultant loss of load could challenge
utilities’ financial viability under current business models. The full spectrum of existing and emerging
technologies contributing to these challenges includes energy efficiency, combined heat and power, combined
heat and power with fuel cells, gas turbines, rooftop photovoltaic, distributed wind, plug-in hybrid and all-
electric vehicles, distributed storage, demand response, and transactive building controls.
An important issue for addressing the operational and business model concerns posed by new technologies
centers on valuation—i.e., “What are the benefits of new services and technologies to the grid?” and conversely,
“What is the cost of the services the grid provides to customers?” There is no agreement, however, on the
answers. This issue has been examined in numerous valuation studies considering a variety of impacts. For
example, studies provide different conclusions regarding the impacts on T&D, such as capacity avoidance, grid
support services, or external impacts such as avoided GHGs; the monetized estimates they assign to a given
service or impact (capacity, energy, system losses) can range by a factor of five or more.
Many of the differences are determined by local circumstances, such as existing generation fleets, fuel
resources displaced, T&D system loading, and regional differences in dispatch and unit commitment decisions.
Others reflect state-specific sociopolitical preferences, such as assumed monetary benefits from reducing GHG
emissions or adding local jobs. There is a lack of transparent, broadly accepted methods that can be used by
stakeholders to determine the costs and benefits associated with integrating new services and technologies
into the grid, while respecting regional differences. Better valuation methods would empower legislators
and regulators in their efforts to address their local needs as they formulate strategies and plans to provide a
portfolio of electricity options that meet their state-specific goals for reliable, affordable, and clean electricity.
EL-46 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Transmission and Distribution Overview
Efficiency and Line Loss
T&D grids experience line losses—electricity that is generated and supplied to the system but lost before it can
be consumed by end users. In general, aggregate statistics do not differentiate between T&D losses. About
6 percent of electricity generated at U.S. power plants each year is lost on the T&D system before it reaches
an end use.171 Reducing these losses would result in less generation being needed to serve load, lowering costs
and pollution for the same level of service. A number of loss-reduction methods are available, ranging from
larger or more conductive conductors or higher voltages used for distribution feeders, sub-transmission, and
transmission lines; high-voltage, direct current for certain transmission lines; higher-efficiency transformers
and related grid equipment; and distribution feeder reconfiguration with strategic capacitor placement; among
others.172
However, the potential savings for specific loss-reduction strategies is difficult to generalize because each
transmission or distribution grid situation is unique. Strategies will result in varying amounts of loss reduction
depending on system configuration and usage, and losses must be valued based on power prices in each
region, as well as being valued against other capital improvements.
It is important to realize that many new grid technologies will increase productivity by increasing the usage
and therefore loading of the grid. As a result, energy losses can actually increase on the grid with high
utilization. It is very hard at this point to assess how the dynamics of equipment that deceases or increases
losses will ultimately affect grid energy efficiency. The choice of what strategy a utility will use will depend on
cost analysis of the new technology, as well as the value of the energy saved or lost.
In contrast to wind and solar, non-variable renewable sources (i.e., geothermal, biomass, and water power) are
more predictable and are also dispatchable resources; as a result, they can provide grid services in the same
manner as thermal generators. In addition, concentrating solar power can utilize highly efficient thermal
storage, and it becomes a dispatchable resource with capacity value.
Despite the challenges, there are power systems in some regions that already integrate higher levels of variable
renewable energy.175, 176 In these cases, the impacts of variable renewable energy have not compromised
reliability because planners and system operators made whatever market design and system operations
changes that were needed, as well as appropriate complementary new flexible generation and new transmission
or distribution investments, to address grid needs and comply with NERC’s mandatory reliability provisions.177
Such adaptations have challenged the perception that physical or technical issues will fundamentally limit
penetration of variable renewable energy. Rather, the growth of variable renewable energy penetration is
primarily bounded by the economics of compensating measures that are taken to maintain system reliability.178
These economic constraints may or may not be significant depending on the cost of additional flexible
generation, demand, transmission assets, or operational or institutional arrangements, and they are collectively
tied to the ongoing need to integrate not just new variable, but other new resources as well, compensating
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-47
Appendix C: ELECTRICITY
for retiring generation while maintaining reliability and affordability. For example, NERC has discussed the
importance of ancillary services (ramping, local reserve requirements, voltage support, and frequency support)
in the context of generation retirements and new resource mixes.179, 180
The grid can be considered to have “economic carrying capacity,” which represents the amount of economically
competitive variable renewable energy that can be added to a given system.181 This economic carrying capacity
is highly region-specific and is not fixed; however, technical and institutional changes have the potential
to increase the economic carrying capacity of a given power grid over time through a number of different
best practices that can increase flexibility. These best practices include improving integrated planning
methodologies and increasing system flexibility in operations, markets, load, generation, transmission, and
storage.182
Specific actions to improve economic carrying capacity—and the relative costs of those actions—vary
significantly by system. Across all systems, common areas of focus include the following:
• Increasing system flexibility at least cost—for example, through operational improvements, large-scale
participation of demand-side flexibility, storage, and increasing generator flexibility.183
• Minimizing grid costs—for example, through strategic planning, institutional coordination, and smart
technologies.184
• Minimizing system capacity costs, thereby reducing the amount of reserve capacity necessary to ensure
reliability at all times of the year—for example, through geographic diversity of generation sources,
enhanced demand response, and storage.185
Flexibility
Flexibility is the ability of a resource—any component or collection of components of the power system—
to respond to the scheduled or unscheduled changes of power system conditions at various operational
timescales.186 Flexibility supports three characteristics of an ideal electric system: affordability, reliability, and
sustainability. Increased electric system flexibility can come from a portfolio of supply- and demand-side
options, including flexible conventional generation, grid storage, new transmission, more responsive loads,
and changes in power system operations.187, 188 Smart grid components and new systems and controls will
provide unprecedented, real-time visibility across the energy system. T&D planners and operators can use this
information to employ the most reliable and cost-effective flexibility options. They can consider building new
generation and transmission alongside other options like demand response, larger balancing areas, or storage.
Storage
In the past, storage has not played a large role in the Nation’s electric system. As of August 2014, there were 317
storage facilities in the United States with a total operational capability of 21.3 GW—less than 2 percent of the
total installed electricity capacity.189
EL-48 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
The vast majority of the United States’ utility-scale storage capacity is provided by 30 pumped-storage
hydroelectric facilities totaling 16.5 GW. Water is pumped from a lower-elevation reservoir (at off-peak times
when the generation cost is lowest) to a higher elevation, and at peak times, water is released back through a
turbine, generating electricity when it is especially valuable. A significant amount of new pumped storage
(39 GW) has been proposed for development, much in the West; these proposed facilities are in varying stages
of licensing process at FERC.190 Some have suggested that the process for licensing of pumped storage is too
lengthy, and FERC now has a pilot program to test a shorter 2-year licensing period for closed-loop, pumped-
storage projects.
Conventional hydroelectric generators also perform some storage functions. Pondage hydro (i.e., hydro with
dams) can store water for later release and is used to shave peak load. Within engineering and environmental
considerations (fish ecology and recreational use of the rivers, for example), system operators can reduce
generation during low-demand times and save the water behind the dam for high-load times when the water is
more valuable. Hydro facilities also can be used to actively store intermittent renewable energy. The Bonneville
Power Administration provides such a service, using its vast hydro resources to support variable wind
generation. Under the “storage and shaping” service, Bonneville Power Administration receives variable output
from wind generation and, at a later time, provides shaped on- and off-peak energy.
Other storage technologies include thermal storage, compressed air systems, batteries, and flywheels, with
approximately 1.2 GW in installed capacity.191 These technologies can be important in many applications,
such as renewables integration, T&D investment deferral, capacity, and ancillary services. DOE has funded
multiple storage demonstrations of these new technologies to accelerate storage adoption and their associated
benefits.192
The potential for storage to provide energy and ancillary services may be undervalued;193 cost savings to the
power system can be much larger than the revenue they can receive in current market structures.194 New
methods for valuing these services would aid in planning and cost allocation for storage deployment.
The growth of storage in providing the ancillary service of frequency regulation provides an example of new
service valuation. Prior to 2011, generators that provided frequency regulation (balancing over durations of
5 minutes to 10 minutes) were paid regardless of whether or not they followed the operator’s signal. FERC
Order No. 755 viewed these undifferentiated performance payments as unjust and unreasonable and required
certain system operators to incorporate a resource’s speed and accuracy into a performance-based payment.195
FERC Order No. 755 is technology-neutral and more accurately reflects operational characteristics. Following
this change, electricity storage is displacing coal-fired generation in the PJM frequency regulation market.
Between January 2012 and December 2013, the share of frequency regulation from coal decreased from 34.7 percent
to 12.3 percent, despite coal increasing its share of delivered energy from 42.1 percent in 2012 to 44.3 percent
in 2013.196 Fast-response resources, including storage, grew from zero to provide 14 percent of frequency
regulation requirements by December 2013.197 Energy storage can be cost effective when compared to
traditional generation technologies (e.g., combustion turbines) for providing balancing services.198
Studies have been completed on the value streams of storage at the national level199 and, to a limited degree,
in a few distribution systems; however, information on benefits and costs at the state and regional levels is
lacking. There is a lack of a broadly accepted framework for evaluating benefits below the bulk system level,
particularly for evaluating potential provision of multiple services.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-49
Appendix C: ELECTRICITY
regarding grid conditions; and the promise of enhanced operational efficiencies. While this convergence
presents new vulnerabilities, particularly to cyber threats, it also is providing opportunities for new grid-
associated value streams, enhanced system performance, and more options for consumer interaction with
electricity systems.200
Even as new hardware and software tools are enabling the collection and use of more grid data, the landscape
of electricity supply and demand is changing, and more work is needed to harness information technology
capabilities in order to address the emerging issues. For example, utility investment in both hardware-
connected information technology networks and data management and processing architectures varies widely
across the country; creating a better and more universal understanding of data value, latency requirements,
and the high-value characteristics of analytic tools and network structures would pay dividends.201
Although AMI deployment continues to increase—having reached more than one-third of customers in
2014—many meter communication networks have been designed to support energy usage reporting, but were
built with insufficient bandwidth and capabilities to support advanced distribution operations. Moreover, the
wireless mesh networks built to support metering functions face resilience challenges and are likely of limited
use in power restoration scenarios.
Additionally, traditional software for power grids must adapt as the industry moves away from the basic
assumptions built into existing grid planning, management, and control tools. The emerging interdependence
between natural gas and electric infrastructure and markets adds yet another dimension to this challenge.
New methods are needed, presenting an opportunity for entrepreneurial software developers to deliver needed
modeling, planning, and operational tools.
Financing
Since the days of Insull and the Edison franchises in the late 1800s and early 1900s, private investors have
provided the most borrowed capital to build electricity infrastructure, with ratepayers also providing
financing at times.202 Today, the private sector continues to supply the majority of borrowed capital for electric
infrastructure. Whether this capital takes the form of IOU stock or debt financing for IOUs, public power’s
tax-exempt (state or municipal) bonds, rural electric cooperatives private financing or Rural Utility Services
loans, or private financing for newer transmission-only merchants, T&D assets historically are viewed as safe
investments with predictable returns. This low-risk profile in turn attracts a wide variety of investors—from
pension funds to individuals.
IOUs are responsible for 54 percent of electricity sales203, aj and finance the largest fraction of electric
infrastructure at $90 billion dollars in 2012.204 Transmission investments totaled $16.9 billion and distribution
investments totaled $20.1 billion in 2013.205 EEI’s most recent estimate of T&D spending forecasts continued
increases for each.206 Using a combination of debt (i.e., bonds) and equity (i.e., stocks), IOUs obtain the upfront
capital for large T&D projects. IOUs obtain investment-grade ratings and their corresponding attractive
interest rates because the repayment is based on future electricity revenues, which is seen as a stable income
source.
There are 2,009 publicly owned electric utilities, including those owned by states, municipalities, public
utility districts, or irrigation districts.207 Public power utilities finance energy infrastructure assets through
tax-exempt revenue bonds. Revenue bonds—the predominant financing vehicle for publicly owned electric
and gas utilities aside from self-financing—guarantee repayment through the revenue generated by a specific
project, such as an electric generation or transmission project.
aj
The lower number of 54 percent reflects sales by various marketers directly to end users in states that have restructured their
retail electricity markets. Most of the power marketers still distribute their electricity to their end-use customer through a utility’s
distribution wires to that same customer. Thus, by this second measure, IOUs have 68.5 percent of total electricity customers, as
reported through EIA Forms 861 and 861S.
EL-50 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Along with the Tennessee Valley Authority, DOE’s four Power Marketing Administrations market, distribute,
and—for three of the four—build the transmission to deliver hydroelectric power produced at Federal dams.208
Capital funding for Power Marketing Administration investment can be provided by U.S. Treasury borrowing
authority, customer funding, third-party financing, or Federal appropriations, depending on the various
financial and legal authorities of the Power Marketing Administration. Regardless of the funding source, all
program investment and expenses are repaid (with applicable interest) through rates charged to customers.
The Tennessee Valley Authority was created in 1933 as a government-owned corporation for the unified
development of a river basin comprised of parts of seven states. The agency is currently self-funding financing
operations from power rates and borrowings.
Finally, rural electric cooperatives are consumer-owned utilities that were established to bring electricity to
rural areas. These 871 utilities are located primarily in rural areas where the return on expensive infrastructure
investment was not high enough to attract investment by IOUs or public power. The Rural Electrification
Administration, established in 1935, provided early low-interest loans to rural electric utilities. As part of the
Build America Initiative, the Department of Agriculture recently announced an additional $518 million in
loan guarantees available for rural utilities.209 The remaining 60 percent is derived from private sector sources,
such as the National Rural Utilities Cooperative Finance Corporation and the National Cooperative Services
Corporation. Figure C-15 shows a regional distribution of each major type of electric utility discussed. The
maps show that the regional distribution of each major type does vary.
Figure C-15. Regional Distribution of Each Major Type of Electric Utility210, 211
IOU Public
-130°
Federal Power Marketing Administration territories and facilities
-120° -110° -100° -90° -80° -70°
Power
("
! ) (
! ( "
!
WA )
)
"
"!
) (!
!(!( (
!
(!
! (!
( ! (( (
! MT ME
BPA ND
)
" (
!
((
(
!
! ! MN
(!
! ( VT
(
! OR NH
)
"
(
! "
) ID
)
" )
"
"
) )
"
(
! SD WI NY MA
)
" (
!
)")
CT RI
40°
)
" " MI
"
) WY
40°
)"
")
)"
") ( !
! (
)
" ""
)
"
) )
PA NJ
IA
)
"
)
"
)
" NE
)
"
"
)
NV ")
"
)"
) OH MD DE
)
" UT )
" IL IN DC
WV
WAPA
"
) "
) (
!
"
)
)"
") CO
KS VA
"
) ! MO
(
CA )
" )
"
(
! KY (
! (
!
)
" (
! ( !
! (
(
! NC
)
"
(
!
(!
!
(!
! ((!!
(
!!
( (!
(
! (!
(
TN
SEPA
)
" OK (!
!
(((
! !
(!(
(
!
!
( !
(
AZ NM ( AR (!
! ( (
!
(!
( !
!
!
( (
! SC
)
" (
! MS
SWPA AL (
!
30°
GA
30°
(
!
(
! (
!
(
!
(
!
TX (
!
!
( LA
Generating Agency FL
^
COOP PMAs
! USACE
" Reclamation
The type of utility that serves any particular customer varies widely by region and state.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-51
Appendix C: ELECTRICITY
While utilities examine new ownership structures, the attractiveness of the underlying investment continues
to enable these entities to obtain private sector financing. For example, new entities are entering the market
to build transmission assets. These entities include transmission-only developers, independent transmission
companies (often spun out of former vertically integrated utilities), non-core energy companies, and
generation-focused independent power producers. While not widespread, there also has been at least one
instance of T&D assets being organized and financed as a Real Estate Investment Trust.212, ak, 213
While both IOUs and public power utilities have initiated investments in electricity storage,214, 215 early
commercial deployments of large-scale storage systems often took the form of merchant projects.216 Instead
of recovering costs through regulated rates, merchant projects obtain revenue from competitive markets—
primarily by selling ancillary services, such as frequency regulation.217 These projects have been located in
(or relocated to)218 markets that place the highest value on these services, indicating that market signals more
directly influence storage investment than capital cost or financial structures.
The availability of low-cost capital or non-traditional financial structures does not appear to be a major
constraint to investment in electricity TS&D. Instead, primary disincentives to additional investment in
electricity TS&D may include insufficient data, insufficient pricing transparency, risk aversion, project
approval delays or permitting or siting issues, cost allocation, and market or policy uncertainty, as well as new
technologies that do not have low enough costs to justify investment. As noted throughout this appendix, there
are a variety of strategies available to address these issues. When these non-financial barriers are resolved,
investors have shown a willingness to provide the capital to build grid assets.
The grid of the future will accommodate and rely on an increasingly wide mix of resources, including large central and
distributed generation—some of it variable in nature—energy storage, and responsive (transactive) load. It also will support
a highly distributed architecture that integrates the bulk electric and distribution systems while enabling microgrids, ranging
from individual buildings to multi-firm industrial parks that operate in both integrated and autonomous modes.
The grid of the future will need to be supported by a secure electronic communication network—its “information backbone”
that will enable communication of all the grid components, from generation to the customer level (smart meters and related
information technology to fully automated delivery systems). The communications network will transmit massive quantities of
data to the grid’s central and distributed computers to support the ability to monitor and control time-sensitive operations,
including frequency, voltage, and volt-amps reactive regulation; dispatch generation; perform unit commitment; maintain
dynamic line ratings; analyze and diagnose threats to grid operations; fortify resilience by providing feedback for self-healing;
and evaluating data from sensors (such as synchophasors) that enable dynamic maximization of system capacity.
Business models that sustain grid investment and continued modernization while at the same time supporting new and
alternative market structures will be needed. An overarching concern in its design will be meeting societal environmental
objectives, such as resilience and greenhouse gas emissions reductions. Table C-4, taken from analysis recently conducted by
Pacific Northwest National Laboratory for the Department of Energy, lays out a number of key architectural components of the
grid of the future.
ak
The holding company Hunt Utility Services created a 2010 real estate investment trust with investors who intend to invest $2.1 billion
in electricity infrastructure. Currently, infaREIT has a subsidiary that owns and leases transmission and distribution operated by
Texas-based Sharyland Utilities. See: Hunt Utility Services. “Home.” www.huntutility.com/. Accessed February 6, 2015.
EL-52 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Grid of the Future: Architecture (continued)
Distribution System Operation Structure for clear responsibility for distributed reliability.
The grid of the future must be built on a business model that sustains grid investment and continued modernization while at the same time
supports new products and services and will be a multi-faceted machine that produces and reliably delivers power for service to customers.
al
Quadrennial Energy Review Analysis: Taft, J.D. and A. Becker-Dippman. “Grid Architecture.” Pacific Northwest National
Laboratory. PNNL-24044. January 2015. http://energy.gov/epsa/qer-document-library.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-53
Appendix C: ELECTRICITY
Endnotes
1. The Edison Foundation, Institute for Electric Innovation. “Innovations Across the Grid.” December 2013. http://www.
edisonfoundation.net/iei/Documents/InnovationsAcrosstheGrid_LoRes_InstElcInnv.pdf. Accessed April 3, 2015.
2. North American Electric Reliability Corporation. “Understanding the Grid.” August 2013. http://www.nerc.com/news/
Documents/Understanding%20the%20Grid%20DEC12.pdf. Accessed March 4, 2015. Reproduced with permission.
3. Pérez-Arriaga, I.J., H. Rudnick and M. Rivier. “Electric Energy Systems: An Overview.” In: Electric Energy Systems:
Analysis and Operations, eds. Gomez-Exposito, A., A. Conejo and C. Canizares. CRC Press. 2008. As used in
Massachusetts Institute of Technology Energy Initiative. “The Future of the Electric Grid.” p. 35. 2011. http://mitei.mit.
edu/publications/reports-studies/future-electric-grid. Accessed January 7, 2015.
4. Linenberger, T.R. “The Pacific Northwest-Pacific Southwest Intertie.” Bureau of Reclamation. 2013. http://www.usbr.
gov/history/ProjectHistories/PACIFIC%20NORTHWEST-PACIFIC%20SOUTHWEST%20INTERTIE%20MASTER%20ZLA%20
HC%20FC%20BC%20IC%20SC%207.2010.pdf. Accessed April 3, 2015.
5. Energy Information Administration. “Form 861 data files.” February 19, 2015. http://www.eia.gov/electricity/data/
eia861/index.html. Accessed February 26, 2015.
6. Energy Information Administration. “What is the electric power grid and what are some challenges it faces?” Energy
in Brief. September 16, 2014. http://www.eia.gov/energy_in_brief/article/power_grid.cfm. Accessed January 15, 2015.
7. Edison Electric Institute. “EEI Statistical Yearbook 2013.” Table 10.6. 2013.
8. Platts. “UDI Directory of Electric Power Producers and Distributors, 123nd Edition of the Electrical World
Directory.” p. vi. 2014. https://www.platts.com/IM.Platts.Content/downloads/udi/eppd/eppddir.pdf. Accessed May 26,
2015.
9. National Academy of Engineering. “Greatest Engineering Achievements of the 20th Century.” 2000. http://www.
greatachievements.org/. Accessed January 5, 2015.
10. Energy Information Administration. “Monthly Energy Review: Table 7.3b: Consumption of Combustible Fuels for
Electricity Generation.” p. 110. February 2015. http://www.eia.gov/totalenergy/data/monthly/pdf/sec7_10.pdf. Accessed
March 20, 2015.
11. Energy Information Administration. “Annual Energy Outlook 2014.” Table 135. May 2014. http://www.eia.gov/
forecasts/archive/aeo14/tables_ref.cfm. Accessed February 25, 2015.
12. Energy Information Administration. “Monthly Energy Review.” Table 7.2a. p. 97. January 2015. http://www.eia.gov/
totalenergy/data/monthly/archive/00351501.pdf. Accessed February 25, 2015.
13. Energy Information Administration. “U.S. Natural Gas Consumption by End-Use.” http://www.eia.gov/dnav/ng/
ng_cons_sum_dcu_nus_a.htm. Accessed March 4, 2015.
14. Energy Information Administration. “Half of power plant capacity additions in 2013 came from natural gas.” Today
in Energy. April 8, 2014. http://www.eia.gov/todayinenergy/detail.cfm?id=15751. Accessed January 21, 2015.
15. Energy Information Administration. “Natural gas, solar, and wind lead power plant capacity additions in first-half
2014.” Today in Energy. September 9, 2014. http://www.eia.gov/todayinenergy/detail.cfm?id=17891. Accessed February
2, 2015.
16. Tobin, J. “Expansion and Change on the U.S. Natural Gas Pipeline Network 2002.” Natural Gas Analysis Publications.
2002. http://www.eia.gov/pub/oil_gas/natural_gas/feature_articles/2003/Pipenet03/pipenet03.html. Accessed January 15,
2015.
17. Energy Information Administration. “Annual Energy Outlook 2014.” Figure MT-29. May 7, 2014.
18. Faruqui, A. “Surviving Sub-One Percent Sales Growth.” The Brattle Group. March 20, 2014. http://www.brattle.
com/system/publications/pdfs/000/004/988/original/Surving_Sub_One_Percent_Sales_Growth_Faruuqui_3_13_2014.
pdf?1394816248. Accessed April 3, 2015.
EL-54 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
19. Energy Information Administration. “EIA Electricity Data Browser: retail electricity sales data.” http://www.eia.gov/
electricity/data/browser. Accessed January 9, 2014.
20. Wood, L. and R. Borlick. “Value of the Grid to DG Customers.” Institute for Electric Innovation Issue Brief. October
2013. http://www.edisonfoundation.net/iei/Documents/IEE_ValueofGridtoDGCustomers_Sept2013.pdf. Accessed April 3,
2015.
21. Energy Information Administration. “Annual Energy Outlook 2015.” April 2015. http://www.eia.gov/forecasts/aeo/
tables_ref.cfm. Accessed May 4, 2015.
22. American Wind Energy Association. “U.S. Wind Industry Fourth Quarter 2014 Market Report.” January 28, 2015.
http://awea.files.cms-plus.com/4Q2014%20AWEA%20Market%20Report%20Public%20Version.pdf. Accessed May 5,
2015.
23. Energy Information Administration. “Net generation for all sectors, monthly.” Electricity Data Browser. http://www.
eia.gov/electricity/data/browser/. Accessed January 5, 2015.
24. Energy Information Administration. “Annual Energy Outlook 2015.” April 2015. http://www.eia.gov/forecasts/aeo/
tables_ref.cfm. Accessed April 5, 2015.
25. Energy Information Administration. “Net generation for all sectors, monthly.” Electricity Data Browser. http://www.
eia.gov/electricity/data/browser/. Accessed January 5, 2015.
26. Barbose, G. “Renewables Portfolio Standards in the United States: A Status Update.” Slide 9. December 2014. http://
emp.lbl.gov/sites/all/files/2014%20REM.pdf. Accessed January 9, 2015.
27. Wiser, R. and M. Bolinger. “2013 Wind Technologies Market Report.” Lawrence Berkeley National Laboratory.
August 2014. http://emp.lbl.gov/sites/all/files/lbnl-6809e.pdf. Accessed January 9, 2015.
28. Energy Information Administration. “Annual Energy Outlook 2014: Annual projections to 2040.” http://www.eia.gov/
analysis/projection-data.cfm#annualproj. Accessed February 9, 2015.
29. Energy Information Administration. “Coal Data Browser: Prices.” January 20, 2015. http://www.eia.gov/coal/data.
cfm#prices. Accessed February 9, 2015.
30. Sudduth, B. “Grid Reliability Studies-WECC Update.” Western Electricity Coordinating Council. Presented at
Western Interstate Energy Board’s CREPC/SPSC Meeting, April 6, 2015. http://westernenergyboard.org/wp-content/
uploads/2015/04/04-06-15_CREPC-SPSC-WIRAB_sudduth_WECC_TEPPC_Studies_reliability_analyses.pdf. Accessed May
4, 2015.
31. PJM. “2012 Regional Transmission System Plan.” Book 3. p. 13–35. http://www.pjm.com/~/media/documents/
reports/2012-rtep/2012-rtep-book-3.ashx. Accessed May 5, 2015.
32. PJM. “2012 Regional Transmission System Plan.” Book 3. p. 23–33. http://www.pjm.com/~/media/documents/
reports/2012-rtep/2012-rtep-book-3.ashx. Accessed May 5, 2015.
33. PJM. “2012 Regional Transmission System Plan.” Book 3. p. 11–22. http://www.pjm.com/~/media/documents/
reports/2012-rtep/2012-rtep-book-3.ashx. Accessed May 5, 2015.
34. Nuclear Energy Institute. “US Nuclear Power Plants Posted Record High Efficiency in 2014.” January 22, 2015. http://
www.nei.org/News-Media/Media-Room/News-Releases/US-Nuclear-Power-Plants-Posted-Record-High-Efficie.
35. New York Independent System Operator. “2012 Reliability Needs Assessment.” September 28, 2012. http://www.
nyiso.com/public/webdocs/markets_operations/services/planning/Planning_Studies/Reliability_Planning_Studies/Reliability_
Assessment_Documents/2012_RNA_Final_Report_9-18-12_PDF.pdf. Accessed January 9, 2015.
36. National Research Council. “Alternatives to the Indian Point Energy Center for Meeting New York Electric Power
Needs.” p. 1. 2006.
37. New York Public Service Commission. “Indian Point Contingency Plans Move Forward.” October 17, 2013.
http://documents.dps.ny.gov/public/Common/ViewDoc.aspx?DocRefId={1D2A3C42-9CAE-49AE-9E5B-0B2DABD0E015}.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-55
Appendix C: ELECTRICITY
39. Department of Energy. “Transcript for DOE Public QER Meeting #2: QER Public Meeting in Providence, RI &
Hartford, CT: New England Regional Infrastructure Constraints.” April 21, 2014. www.energy.gov/QER.
40. Energy Information Administration. “Coal stockpiles at coal-fired power plants smaller than in recent years.” Today
in Energy. November 6, 2014. http://www.eia.gov/todayinenergy/detail.cfm?id=18711. Accessed February 22, 2015.
41. Energy Information Administration. “Coal stockpiles at coal-fired power plants smaller than in recent years.” Today
in Energy. November 6, 2014. http://www.eia.gov/todayinenergy/detail.cfm?id=18711. Accessed February 22, 2015.
42. SNL Federal Regulatory Activity. “Minn. lawmakers urge FERC to address rail issues as utility concerns mount.”
October 31, 2014. https://www.snl.com/interactivex/article.aspx?ID=29690694&KPLT=2. Accessed April 3, 2015.
43. Quadrennial Energy Review Analysis: The Brattle Group. “Electricity Baseline Report for the US Power System.”
Prepared for Pacific Northwest National Laboratory. 2015 (forthcoming at http://energy.gov/epsa/qer-document-
library).
44. Executive Office of the President. “Economic Benefits of Increasing Electric Grid Resilience to Weather Outages.”
August 2013. http://energy.gov/downloads/economic-benefits-increasing-electric-grid-resilience-weather-outages.
Accessed April 3, 2015.
45. Congressional Research Service. “Weather-Related Power Outages and Electric System Resiliency.” August 28, 2012.
http://fas.org/sgp/crs/misc/R42696.pdf. Accessed April 3, 2015.
46. Department of Energy. “Year-in-Review: 2013 Energy Infrastructure Events and Expansions.” May 2014. http://energy.
gov/oe/downloads/year-review-2013-energy-infrastructure-events-and-expansions-may-2014. Accessed April 3, 2015.
47. Department of Energy. “U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather.” July 2013.
http://energy.gov/downloads/us-energy-sector-vulnerabilities-climate-change-and-extreme-weather. Accessed January 15,
2015.
48. Intergovernmental Panel on Climate Change. “Managing the Risks of Extreme Events and Disasters to Advance
Climate Change Adaptation.” 2012. http://www.ipcc-wg2.gov/SREX/images/uploads/SREX-SPMbrochure_FINAL.pdf.
Accessed January 15, 2015.
49. Global Change Research Program. “U.S. National Climate Assessment.” 2014. http://nca2014.globalchange.gov/
downloads. Accessed January 15, 2015.
50. Global Change Research Program. “U.S. National Climate Assessment.” 2014. http://nca2014.globalchange.gov/
downloads. Accessed April 3, 2015.
51. Quadrennial Energy Review Analysis: Watson, J-P. et al. “Conceptual Framework for Developing Resilience Metrics
for the Electricity, Oil, and Gas Sectors in the United States.” Sandia National Laboratories. 2014. http://energy.gov/
epsa/qer-document-library.
52. Melillo, J.M., T.C. Richmond, and G.W. Yohe, Eds. “Global Climate Change Impacts in the United States.” Global
Change Research Program. 2009. http://www.globalchange.gov/browse/reports/global-climate-change-impacts-united-
states. Accessed April 3, 2015.
53. Institute of Electrical and Electronics Engineers. “Standard for Calculating the Current-Temperature Relationship of
Bare Overhead Conductors.” p. 738–2012. IEEE Power and Energy Society. 2012.
54. Kintner-Meyer, et al. “Potential Impacts of Heat Waves and Coincident Drought on Electric Reliability, Cost, and
CO2 Emissions in the Eastern U.S. Grid.” May 12, 2014. http://climatemodeling.science.energy.gov/presentations/
potential-impacts-heat-waves-and-coincident-drought-electric-reliability-cost-and-co2. Accessed April 3, 2015.
EL-56 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
55. Department of the Interior. “Transformer Maintenance: Facilities Instructions, Standards, and Techniques.” October
2000. http://www.usbr.gov/power/data/fist/fist3_30/fist3_30.pdf. Accessed January 15, 2015.
56. North American Electric Reliability Corporation. “State of Reliability 2014.” May 2014. http://www.nerc.com/pa/RAPA/
PA/Performance%20Analysis%20DL/2014_SOR_Final.pdf. Accessed April 3, 2015.
57. Energy Information Administration. “EIA initiates daily gasoline availability survey for metropolitan New York.”
Today in Energy. November 5, 2012. http://www.eia.gov/todayinenergy/detail.cfm?id=8650. Accessed April 3, 2015.
58. Department of Energy. “U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather.” July 2013.
http://energy.gov/downloads/us-energy-sector-vulnerabilities-climate-change-and-extreme-weather. Accessed January 15,
2015.
59. Department of Homeland Security. “Sector Resilience Report: Electric Power Delivery.” June 11, 2014. https://
scadahacker.com/library/Documents/Threat_Intelligence/DHS%20-%20Sector%20Resilience%20Report%20Electric%20
Power%20Delivery%20%2014%20JULY%2014.pdf. Accessed April 3, 2015.
65. Love, J.J. et al. “Magnetic storms and induction hazards.” Eos, Transactions, American Geophysical Union. 95(48).
p. 445–446. 2014.
66. Allen, J. et al. “Effects of the March 1989 solar activity.” Eos, Transactions, American Geophysical Union. 70(46).
p. 1479, 1486–1488. 1989.
67. Baker, D.N. et al. “Severe Space Weather Events—Understanding Societal and Economic Impacts.” National Academy
Press. 2008.
68. Lloyd’s of London. “Emerging Risk Report: Solar Storm Risk to the North American Electric Grid.” p. 22. 2013.
69. Department of Energy, Office of Energy Policy and Systems Analysis. 2015.
70. PJM. “PJM History.” http://www.pjm.com/about-pjm/who-we-are/pjm-history.aspx. Accessed May 5, 2015.
71. Federal Energy Regulatory Commission. “Regional Transmission Organizations.” July 2014. http://www.ferc.gov/
industries/electric/indus-act/rto/elec-ovr-rto-map.pdf. Accessed January 20, 2015.
72. Department of Energy. “QER Public Meeting in Portland, OR: Electricity Transmission, Storage and Distribution
– West.” July 10, 2014. http://www.energy.gov/epsa/downloads/qer-public-meeting-portland-or-electricity-transmission-
storage-and-distribution-west. Accessed April 3, 2015.
73. Department of Energy. “QER Public Meeting in Cheyenne, WY: Infrastructure Siting.” August 21, 2014. http://www.
energy.gov/epsa/downloads/qer-public-meeting-cheyenne-wy-infrastructure-siting. Accessed April 3, 2015.
74. Edison Electric Institute. “EEI Statistical Yearbook 2013.” Table 10.6. 2013.
75. North American Electric Reliability Corporation. “Electricity Supply & Demand Database.” http://www.nerc.com/pa/
RAPA/tads/Pages/ElementInventory.aspx. Accessed January 9, 2015.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-57
Appendix C: ELECTRICITY
76. Willrich, M. “Electricity Transmission Policy for America – Enabling a Smart Grid, End to End.” p.11. http://gspp.
berkeley.edu/assets/uploads/page/CEPP_Willrich_111809.pdf. Accessed January 13, 2015.
77. U.S.-Canada Power System Outage Task Force. “Final Report on the August 14, 2003 Blackout in the United
States and Canada: Causes and Recommendations.” April 2004. http://energy.gov/oe/downloads/blackout-2003-
final-report-august-14-2003-blackout-united-states-and-canada-causes-andhttp://energy.gov/sites/prod/files/oeprod/
DocumentsandMedia/BlackoutFinal-Web.pdf. Accessed January 22, 2015.
78. North American Electric Reliability Corporation. “Standard TPL-001-4 – Transmission System Planning
Performance Requirements.” October 17, 2013. http://www.nerc.com/_layouts/PrintStandard.aspx?standardnumber=TPL-
001-4&title=Transmission%20System%20Planning%20Performance%20Requirements&jurisdiction=United%20States.
Accessed April 3, 2015.
79. North American Electric Reliability Corporation. “State of Reliability 2014.” May 2014. http://www.nerc.com/pa/RAPA/
PA/Performance%20Analysis%20DL/2014_SOR_Final.pdf. Accessed January 9, 2015.
80. North American Electric Reliability Corporation. “State of Reliability 2014.” Table A.3. p. 76. May 2014. http://www.
nerc.com/pa/RAPA/PA/Performance%20Analysis%20DL/2014_SOR_Final.pdf. Accessed January 9, 2015.
81. North American Electric Reliability Corporation. “Hurricane Sandy Event Analysis Report.” p. 21. January 2014.
http://www.nerc.com/pa/rrm/ea/Oct2012HurricanSandyEvntAnlyssRprtDL/Hurricane_Sandy_EAR_20140312_Final.pdf.
Accessed January 9, 2015.
82. Office of Governor Martin O’Malley. “Grid Resiliency Task Force: Weathering the Storm.” September 24, 2012. http://
energy.maryland.gov/reliability/index.html http://energy.maryland.gov/reliability/index.html. Accessed February 19, 2015.
83. North American Electric Reliability Corporation. “Polar Vortex Review.” September 2014. http://www.nerc.com/pa/
rrm/January%202014%20Polar%20Vortex%20Review/Polar_Vortex_Review_29_Sept_2014_Final.pdf. Accessed January
9, 2015.
84. Federal Energy Regulatory Commission. “Order Approving Stipulation and Consent Agreement.” 129 FERC ¶
61,016. 2009.
85. U.S.-Canada Power System Outage Task Force. “Final Report on the August 14, 2003 Blackout in the United States
and Canada: Causes and Recommendations.” April 2004. http://energy.gov/sites/prod/files/oeprod/DocumentsandMedia/
BlackoutFinal-Web.pdf. Accessed January 22, 2015.
86. Federal Energy Regulatory Commission. “Mandatory Reliability Standards for the Bulk-Power System.” 120 FERC ¶
31,242. 2007.
87. North American Electric Reliability Corporation. “ERO Event Analysis Process – Version 2.” July 2013. http://www.
nerc.com/pa/rrm/ea/EA%20Program%20Document%20Library/Final_ERO_EA_Process_V2.1.pdf. Accessed January 9,
2015.
88. North American Electric Reliability Corporation. “Overview of the ERO Enterprise’s Risk-Based Compliance
Monitoring and Enforcement Program.” September 5, 2014. http://www.nerc.com/pa/comp/Reliability%20
Assurance%20Initiative/Overview%20of%20the%20ERO%20Enterprise%E2%80%99s%20Risk-Based%20CMEP.pdf.
Accessed January 9, 2015.
89. North American Electric Reliability Corporation. “Cyber Security Reliability Standards CIP V5 Transition Guidance.”
August 12, 2014. http://www.nerc.com/pa/CI/Documents/V3-V5%20Transition%20Guidance%20FINAL.pdf. Accessed
January 9, 2015.
90. North American Electric Reliability Corporation. “CIP-014-1 — Physical Security.” May 1, 2014. http://www.nerc.
com/pa/Stand/Reliability%20Standards/CIP-014-1.pdf. Accessed January 9, 2015.
91. Energy Information Administration. “Investment in electricity transmission infrastructure shows steady increase.”
Today in Energy. August 26, 2014. http://www.eia.gov/todayinenergy/detail.cfm?id=17711.
92. Edison Electric Institute. “EEI Survey Shows Electric Power Industry Made Record Levels of Investment in
Transmission and Distribution.” January 8, 2015. http://www.eei.org/resourcesandmedia/newsroom/Pages/Press%20
EL-58 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
Releases/EEI%20Survey%20Shows%20Electric%20Power%20Industry%20Made%20Record%20Levels%20of%20
Investment%20in%20%20Transmission%20and%20Distribution.aspx#sthash.LebCzHKY.dpuf.
93. Edison Electric Institute. “EEI Survey Shows Electric Power Industry Made Record Levels of Investment in
Transmission and Distribution.” January 8, 2015. http://www.eei.org/resourcesandmedia/newsroom/Pages/Press%20
Releases/EEI%20Survey%20Shows%20Electric%20Power%20Industry%20Made%20Record%20Levels%20of%20
Investment%20in%20%20Transmission%20and%20Distribution.aspx#sthash.LebCzHKY.dpuf.
94. Edison Electric Institute. “EEI Survey Shows Electric Power Industry Made Record Levels of Investment in
Transmission and Distribution.” January 8, 2015. http://www.eei.org/resourcesandmedia/newsroom/Pages/Press%20
Releases/EEI%20Survey%20Shows%20Electric%20Power%20Industry%20Made%20Record%20Levels%20of%20
Investment%20in%20%20Transmission%20and%20Distribution.aspx#sthash.LebCzHKY.dpuf.
95. Edison Electric Institute. “EEI Survey Shows Electric Power Industry Made Record Levels of Investment in
Transmission and Distribution.” January 8, 2015. http://www.eei.org/resourcesandmedia/newsroom/Pages/Press%20
Releases/EEI%20Survey%20Shows%20Electric%20Power%20Industry%20Made%20Record%20Levels%20of%20
Investment%20in%20%20Transmission%20and%20Distribution.aspx#sthash.LebCzHKY.dpuf.
96. Energy Information Administration. “U.S. electricity sales have decreased in four of the past five years.” Today in
Energy. December 22, 2013. http://www.eia.gov/todayinenergy/detail.cfm?id=14291.
97. Western Electricity Coordinating Council. “2024 Common Case Transmission Assumptions.” June 2, 2014. https://
www.wecc.biz/_layouts/15/WopiFrame.aspx?sourcedoc=/Reliability/RPCG_2024CCTA_Report.pdf&action=default&Defaul
tItemOpen=1. Accessed May 5, 2015.
98. Public Utility Commission of Texas. “Texas CREZ Project.” http://www.texascrezprojects.com/. Accessed
January 5, 2015.
99. Reuters. “AEP venture completes Texas CREZ power transmission lines.” December 9, 2013. http://www.reuters.com/
article/2013/12/09/utilities-aep-texas-idUSL1N0JO0UN20131209. Accessed January 5, 2015.
100. Quadrennial Energy Review Analysis: The Brattle Group. “Electricity Baseline Report for the US Power System.”
Prepared for Pacific Northwest National Laboratory. 2015 (forthcoming at http://energy.gov/epsa/qer-document-
library).
101. Energy Information Administration. “Investment in electricity transmission infrastructure shows steady increase.”
Today in Energy. August 26, 2014. http://www.eia.gov/todayinenergy/detail.cfm?id=17711. Accessed January 9, 2015.
102. Edison Electric Institute. “Actual and Planned Transmission Investment by Shareholder-Owned Utilities (2008–
2017).” January 8, 2015. http://www.eei.org/issuesandpolicy/transmission/Documents/bar_Transmission_Investment.pdf.
Accessed March 18, 2015.
103. Edison Electric Institute. “Transmission Projects: At a Glance.” March 2014. http://www.eei.org/issuesandpolicy/
transmission/Documents/Trans_Project_lowres_bookmarked.pdf. Accessed January 16, 2015.
104. Western Electricity Coordinating Council. “2024 Common Case Transmission Assumptions.” June 2, 2014. https://
www.wecc.biz/_layouts/15/WopiFrame.aspx?sourcedoc=/Reliability/RPCG_2024CCTA_Report.pdf&action=default&Default
ItemOpen=1. Accessed February 2, 2015.
105. Chang, J., J. Pfeifenberger and M. Hagerty. “Trends and Benefits of Transmission Investments: Identifying and
Analyzing Value.” The Brattle Group. Presented to the CEA Transmission Council, Ottawa, Canada,
September 26, 2013. http://www.brattle.com/system/publications/pdfs/000/004/944/original/Trends_and_Benefits_of_
Transmission_Investments_Chang_Pfeifenberger_Hagerty_CEA_Sep_26_2013.pdf.
106. Hirst, E. “U.S. Transmission Capacity: Present Status and Future Prospects.” Edison Electric Institute and Department
of Energy. June 2004. http://energy.gov/sites/prod/files/oeprod/DocumentsandMedia/transmission_capacity.pdf. Accessed
January 20, 2015.
107. Energy Information Administration. “Annual Energy Outlook 2014.” April 2014. http://www.eia.gov/forecasts/aeo/
pdf/0383(2014).pdf. Accessed January 9, 2015.
108. Quadrennial Energy Review Analysis: Hadley, S.W. and A.H. Sanstad. “Impacts of Demand-Side Resources on
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-59
Appendix C: ELECTRICITY
Electric Transmission Planning.” Oak Ridge National Laboratory and Lawrence Berkeley National Laboratory.
January 2015. http://energy.gov/epsa/qer-document-library.
109. Department of Energy, Office of Energy Policy and Systems Analysis. “Carbon Implications of Nuclear Power Plant
Retirements and Policy Options.” 2015 (forthcoming).
110. Department of Energy, Office of Energy Policy and Systems Analysis. “Carbon Implications of Nuclear Power Plant
Retirements and Policy Options.” 2015 (forthcoming).
111. Energy Information Administration. “Investment in electricity transmission infrastructure shows steady increase.”
Today in Energy. August 26, 2014. http://www.eia.gov/todayinenergy/detail.cfm?id=17711. Accessed January 5, 2015.
112. Edison Electric Institute. “Transmission Projects: At a Glance.” March 2014. http://www.eei.org/issuesandpolicy/
transmission/Documents/Trans_Project_lowres_bookmarked.pdf. Accessed January 16, 2015.
113. Department of Energy. “Transmission Constraints and Congestion in the Western and Eastern Interconnections,
2009-2012.” January 2014. http://energy.gov/sites/prod/files/2014/02/f7/TransConstraintsCongestion-01-23-2014%20.
pdf. Accessed January 15, 2015.
114. Gearino, D. “AEP’s Power Play: De-Emphasizing Electricity Plants.” Columbus Dispatch. December 29, 2013.
115. Navigant Consulting. “Transmission Planning White Paper.” p. 26. Produced for the Eastern Interconnection States
Planning Council and the National Association of Regulatory Utility Commissioners. January 2014. Accessed
January 15, 2015.
116. Navigant Consulting. “Transmission Planning White Paper.” p. 26. Produced for the Eastern Interconnection States
Planning Council and the National Association of Regulatory Utility Commissioners. January 2014. Accessed
January 15, 2015.
117. Federal Energy Regulatory Commission. “FERC Order No. 1000 – Transmission Planning and Cost Allocation
by Transmission Owning and Operating Public Utilities.” July 2011. http://www.ferc.gov/whats-new/comm-
meet/2011/072111/E-6.pdf. Accessed January 15, 2015.
118. Federal Energy Regulatory Commission. “Final Rule on Transmission Planning and Cost Allocation by Transmission
Owning and Operating Public Utilities.” http://www.ferc.gov/media/news-releases/2011/2011-3/07-21-11-E-6-
presentation.pdf.
119. Pletka, R. and J. Finn. “Western Renewable Energy Zones, Phase 1: QRA Identification Technical Report.” Source
table line 7. Prepared by Black & Veatch for the National Renewable Energy Laboratory. October 2009. http://www.
nrel.gov/docs/fy10osti/46877.pdf. Accessed January 15, 2015.
120. GE Energy. “Western Wind and Solar Integration Study.” May 2010. http://www.nrel.gov/docs/fy10osti/47434.pdf.
Accessed January 15, 2015.
121. EnerNex. “Eastern Wind Integration and Transmission Study.” February 2011. http://www.nrel.gov/docs/
fy11osti/47078.pdf.
122. Corbus, D. et al. “California - Wyoming Grid Integration Study Phase 1 - Economic Analysis.” March 2014. http://
www.nrel.gov/docs/fy14osti/61192.pdf. Accessed January 16, 2015.
123. Western Electric Coordination Council. “10-Year Regional Transmission Plan.” September 2011. https://www.wecc.
biz/_layouts/15/WopiFrame.aspx?sourcedoc=/Reliability/2011Plan_ExecutiveSummary_Brochure.pdf&action=default&Defa
ultItemOpen=1. Accessed January 16, 2015.
124. California Independent System Operator. “2013-2014 Transmission Plan (board-approved).” July 16, 2014. Accessed
January 16, 2015.
125. Midcontinent Independent System Operator. “MISO Transmission Expansion Plan 2013.” https://www.misoenergy.
org/_layouts/MISO/ECM/Redirect.aspx?ID=168129. Accessed January 16, 2015.
126. Southwest Power Pool. “Integrated Transmission Plan 20-Year Assessment Report.” July 30, 2013. http://www.spp.org/
publications/20130730_2013_ITP20_Report_clean.pdf. Accessed January 16, 2015.
EL-60 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
127. Platts. “UDI Directory of Electric Power Producers and Distributors, 122nd Edition of the Electrical World
Directory.” p. vi. 2014.
128. Edison Electric Institute. “Distribution Issues & Policy.” http://www.eei.org/issuesandpolicy/distribution/Pages/default.
aspx. Accessed January 16, 2015.
129. Edison Electric Institute. “EEI Survey Shows Electric Power Industry Made Record Levels of Investment in
Transmission and Distribution.” January 8, 2015. http://www.eei.org/resourcesandmedia/newsroom/Pages/Press%20
Releases/EEI%20Survey%20Shows%20Electric%20Power%20Industry%20Made%20Record%20Levels%20of%20
Investment%20in%20%20Transmission%20and%20Distribution.aspx#sthash.LebCzHKY.dpuf.
130. Utility Dive. “The State of the Electric Utility 2014.” 2014. http://app.assetdl.com/landingpage/siemens-2014-electric-
utility-survey/. Accessed January 16, 2015.
131. American Society of Civil Engineers. “2013 Report Card on America’s Infrastructure.” 2013. http://www.
infrastructurereportcard.org/a/#p/home. Accessed January 16, 2015.
132. Utility Dive. “The State of the Electric Utility 2014.” 2014. http://app.assetdl.com/landingpage/siemens-2014-electric-
utility-survey/. Accessed January 16, 2015.
133. Big Sandy Rural Electric Cooperative Corporation. “Electric Distribution Utility Annual Reliability Report.” KPUC
Case 2006-00494. March 31, 2014.
134. Rocky Mountain Power. “Utah Service Reliability Performance Baselines.” January 4, 2013.
135. Eto, J.H. et al. “An Examination of Temporal Trends in Electricity Reliability Based on Reports from U.S. Electric
Utilities.” Lawrence Berkeley National Laboratory. LBNL-5268E. January 2012.
136. Eto, J.H. et al. “An Examination of Temporal Trends in Electricity Reliability Based on Reports from U.S. Electric
Utilities.” Lawrence Berkeley National Laboratory. LBNL-5268E. January 2012.
137. Department of Energy, Office of Energy Policy and Systems Analysis. Data from various sources, including Big Sandy
Rural Electric Cooperative Corporation; Rocky Mountain Power; ComEd; New York State Energy Planning Board;
and Duke Energy Florida. 2015.
138. Eto, J.H. and K. Hamachi LaCommare. “An Assessment of Publicly Available Information Reported to State Public
Utility Commissions.” Lawrence Berkeley National Laboratory. LBNL-1092E. October 2008.
139. Energy Information Administration. ”Form EIA-861 Annual Electric Power Industry Report Instructions.” Office of
Management and Budget 1905-0129.
140. Institute of Electrical and Electronics Engineers, Distribution Reliability Working Group. “Benchmark Year 2014
Results for 2013 Data.” July 29, 2014.
141. Eto, J.H. et al. “An Examination of Temporal Trends in Electricity Reliability Based on Reports from U.S. Electric
Utilities.” Lawrence Berkeley National Laboratory. LBNL-5268E. January 2012.
142. Eto, J.H. et al. “An Examination of Temporal Trends in Electricity Reliability Based on Reports from U.S. Electric
Utilities.” Lawrence Berkeley National Laboratory. LBNL-5268E. January 2012.; Big Sandy Rural Electric Cooperative
Corporation. “Electric Distribution Utility Annual Reliability Report.” KPUC Case 2006-00494. March 31, 2014.;
Rocky Mountain Power. “Utah Service Reliability Performance Baselines.” January 4, 2013.; ComEd. “Rolling Meadows
Reliability Performance Year End Report.” September 7, 2012.; New York State Energy Planning Board. “New York State
Transmission and Distribution Systems Reliability Study and Report.” August 2012.; Duke Energy Florida. “Annual
Service Reliability Report for 2013.” February 28, 2014.; Eto, J.H. and K. Hamachi LaCommare. “An Assessment
of Publicly Available Information Reported to State Public Utility Commissions.” Lawrence Berkeley National
Laboratory. LBNL-1092E. October 2008.; Energy Information Administration. “Form EIA-861 Annual Electric Power
Industry Report Instructions.” Office of Management and Budget 1905-0129.; Institute of Electrical and Electronics
Engineers, Distribution Reliability Working Group. “Benchmark Year 2014 Results for 2013 Data.” July 29, 2014.; Line
Undergrounding Task Force. “Findings & Recommendations.” Government of the District of Columbia. 2013.; Office
of Governor Martin O’Malley. “Weathering the Storm: Report of the Grid Resiliency Task Force.” September 24, 2012.;
Tweed, K. “SE&G Wins Approval for Pared-Down $1.2B ‘Energy Strong’ Plan.” May 5, 2012. Greentech Media. http://
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-61
Appendix C: ELECTRICITY
149. Electric Power Research Institute. “The Integrated Grid: Charting a Course to the Power System of the Future.” http://
integratedgrid.epri.com/.
150. Department of Energy. “Synchrophasor technologies and their deployment in recovery act smart grid programs.”
2013.
151. Sexauer, J., P. Javanbakht and S. Mohagheghi. “Phasor Measurement Units for the Distribution Grid: Necessity and
Benefits.” Innovative Smart Grid Technologies. Institute of Electrical and Electronics Engineers, Power & Energy
Society. 2013.
152. Balducci, P.J., M. Weimar and H. Kirkham. “Smart Grid Status and Metrics Report.” Pacific Northwest National
Laboratory. July 2014.
153. Department of Energy. “Dynamic Line Rating Systems for Transmission Lines - Topical Report.” April 2014. https://
www.smartgrid.gov/sites/default/files/doc/files/SGDP%20Transmission%20DLR%20Topical%20Report_04-25-14_FINAL.
pdf. Accessed January 5, 2015.
154. Craig, D. and J. Spare. “Benefits of Automatic Fault Detection, Isolation and Service Restoration on Power
Distribution Circuits.” Transmission and Distribution Conference and Exposition (T&D). 2012 IEEE PES.
155. GSD Associates and Marblehead Municipal Light Department. “Energysense CPP Pilot Final Evaluation Report.”
June 2013. https://www.smartgrid.gov/sites/default/files/Marblehead%20Final%20Evaluation%20Report%20with%20
Appendices%202013-07-01-1_0.pdf. Accessed January 5, 2015.
156. Department of Energy. “The Potential Benefits of Distributed Generation and Rate-Related Issues that May Impede
their Expansion - A Study Pursuant to Section 1817 of the Energy Policy Act of 2005.” 2007. https://www.ferc.gov/
legal/fed-sta/exp-study.pdf. Accessed May 27, 2015.
157. Morris, G., C.A.G. Joos and C. Marnay. “A Framework for the Evaluation of the Cost and Benefits of Microgrids.”
Presented at the CIGRÉ International Symposium. 2011.
158. GridWise Architecture Council. “Financial Benefits of Interoperability: How Interoperability in the Electric Power
Industry Will Benefit Stakeholders Financially.” 2009.
159. Electric Power Research Institute. “The Integrated Grid Cost-Benefit Framework.” February 2015. http://
integratedgrid.epri.com/.
160. Achilles, S., S. Schramm and J. Bebic. “Transmission System Performance Analysis for High-Penetration
Photovoltaics.” p. 72. National Renewable Energy Laboratory. NREL/SR-581-42300. 2008.
EL-62 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
161. Electric Power Research Institute. “Integrating Distributed Resources into Electric Utility Distribution Systems.”
December 2001.
162. Department of Energy, Office of Energy Policy and Systems Analysis. 2015.
163. Opower. “This map shows how 36 states are modernizing the utility business model.” September 24, 2014. http://blog.
opower.com/2014/09/utility-business-model-20-map/. Accessed December 19, 2014.
164. Department of Energy. “State and Regional Policies that Promote Energy Efficiency Programs Carried Out by Electric
and Gas Utilities.” March 2007. http://energy.gov/sites/prod/files/oeprod/DocumentsandMedia/DOE_EPAct_Sec._139_
Rpt_to_CongressFINAL_PUBLIC_RELEASE_VERSION.pdf. Accessed April 9, 2015.
165. York, D. et al. “Three Decades and Counting: A Historical Review and Current Assessment of Electric Utility Energy
Efficiency Activity in the States.” American Council for an Energy-Efficient Economy. June 27, 2012. http://aceee.org/
research-report/u123. Accessed April 9, 2015.
166. Regional Technical Forum. “Home.” http://rtf.nwcouncil.org. Accessed January 16, 2015.
167. Northeast Energy Efficiency Partnerships. “Regional Evaluation, Measurement and Verification Forum.” September
2014. http://www.neep.org/initiatives/emv-forum. Accessed January 16, 2015.
168. North American Electric Reliability Corporation. “Glossary of Terms Used in NERC Reliability Standards.” May 8,
2014. http://www.nerc.com/pa/Stand/Glossary%20of%20Terms/Glossary_of_Terms.pdf. Accessed February 9, 2015.
169. North American Electric Reliability Corporation. “Maintaining Bulk Power System Reliability While Integrating
Variable Energy Resources.” November 2013. http://www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/
NERC-CAISO_VG_Assessment_Final.pdf. Accessed January 16, 2015.
170. Federal Energy Regulatory Commission. “Payment for Reactive Power.” AD14-7. 2014. http://www.ferc.gov/legal/staff-
reports/2014/04-11-14-reactive-power.pdf. Accessed April 3, 2015.
171. Energy Information Administration. “FAQ: How much electricity is lost in transmission and distribution in the
United States?” http://www.eia.gov/tools/faqs/faq.cfm?id=105&t=3. Accessed March 10, 2015.
172. Quadrennial Energy Review Analysis: Jackson, R. et al. “Opportunities for Energy Efficiency Improvements in the
U.S. Electricity Transmission and Distribution System.” Oak Ridge National Laboratory, Pacific Northwest National
Laboratory, Savannah River National Laboratory, Lawrence Berkeley National Laboratory. March 2015 (forthcoming
at http://energy.gov/epsa/qer-document-library).
173. Gelman, R. and S. Esterly. “2013 Renewable Energy Data Book.” p.10. DOE/GO-102014-4491. http://www.nrel.gov/
docs/fy15osti/62580.pdf. Accessed April 3, 2015.
174. Quadrennial Energy Review Analysis: Cochran, J. et al. “Grid Integration and the Carrying Capacity of the U.S. Grid
to Incorporate Variable Renewable Energy.” National Renewable Energy Laboratory. March 2015 (forthcoming at
http://energy.gov/epsa/qer-document-library).
175. Renewable Energy Policy Network for the 21st Century. “Renewables 2014: Global Status Report.” 2014. http://www.
ren21.net/ren21activities/globalstatusreport.aspx. Accessed January 16, 2015.
176. Goggin, M. “Xcel Colorado sets U.S. record with over 60% wind.” Into the Wind: The AWEA Blog. November 1,
2013. http://aweablog.org/blog/post/xcel-colorado-sets-us-record-with-over-60-wind. Accessed January 16, 2015.
177. Bird, L., M. Milligan and D. Lew. “Integrating Variable Renewable Energy: Challenges and Solutions.” National
Renewable Energy Laboratory. 2013. http://www.nrel.gov/docs/fy13osti/60451.pdf. Accessed January 16, 2015.
178. Quadrennial Energy Review Analysis: Cochran, J. et al. “Grid Integration and the Carrying Capacity of the U.S. Grid
to Incorporate Variable Renewable Energy.” National Renewable Energy Laboratory. March 2015 (forthcoming at
http://energy.gov/epsa/qer-document-library).
179. North American Electric Reliability Corporation. “Ancillary Service and Balancing Area Solutions to Integrate
Variable Generation.” March 2011. http://www.nerc.com/files/ivgtf2-3.pdf. Accessed January 5, 2015.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-63
Appendix C: ELECTRICITY
180. North American Electric Reliability Corporation. “A Concept Paper on Essential Reliability Services that Characterize
Bulk Power System Reliability.” September 2014. http://www.nerc.com/comm/Other/essntlrlbltysrvcstskfrcDL/ERSTF_
Draft_Concept_Paper_Sep_2014_Final.pdf. Accessed April 3, 2015.
181. Quadrennial Energy Review Analysis: Cochran, J. et al. “Grid Integration and the Carrying Capacity of the U.S. Grid
to Incorporate Variable Renewable Energy.” National Renewable Energy Laboratory. March 2015 (forthcoming at
http://energy.gov/epsa/qer-document-library).
182. Quadrennial Energy Review Analysis: Cochran, J. et al. “Grid Integration and the Carrying Capacity of the U.S. Grid
to Incorporate Variable Renewable Energy.” National Renewable Energy Laboratory. March 2015 (forthcoming at
http://energy.gov/epsa/qer-document-library).
183. Cochran, J. et al. “Flexibility in 21st Century Power Systems.” National Renewable Energy Laboratory. 2014.
http://www.nrel.gov/docs/fy14osti/61721.pdf. Accessed January 16, 2015.; Lew, D. et al. “The Value of Wind Power
Forecasting.” National Renewable Energy Laboratory. 2011. http://www.nrel.gov/docs/fy11osti/50814.pdf. Accessed
January 16, 2015.; Lew, D. et al. “The Western Wind and Solar Integration Study Phase 2.” National Renewable Energy
Laboratory. 2013. http://www.nrel.gov/docs/fy13osti/55588.pdf. Accessed January 16, 2015.; Federal Energy Regulatory
Commission. “Integration of Variable Energy Resources.” FERC Order No. 764: 139 FERC ¶ 61,246. June 22, 2012.
184. Cochran, J. et al. “Integrating Variable Renewable Energy in Electric Power Markets: Best Practices from
International Experience.” National Renewable Energy Laboratory. 2012. http://www.nrel.gov/docs/fy12osti/53732.pdf.
Accessed January 16, 2015.; Bird, L., M. Milligan and D. Lew. “Integrating Variable Renewable Energy: Challenges
and Solutions.” National Renewable Energy Laboratory. 2013. http://www.nrel.gov/docs/fy13osti/60451.pdf. Accessed
January 16, 2015.; International Energy Agency. “The Power of Transformation: Wind, Sun and the Economics of
Flexible Power Systems.” 2013. Accessed January 16, 2015.; Porter, K. et al. “Meeting Renewable Energy Targets in
the West at Least Cost: The Integration Challenge.” Western Governors’ Association. 2012. http://www.westgov.org/
component/docman/doc_download/1610-meeting-renewable-energy-targets-in-the-west-at-least-cost-the-integration-
challenge-full-report?Itemid. Accessed January 16, 2015.; Hand, M. et al. “Renewable Electricity Futures Study.”
National Renewable Energy Laboratory. 2012. http://www.nrel.gov/analysis/re_futures/. Accessed January 16, 2015.;
Basso, T. “IEEE 1547 and 2030 Standards for Distributed Energy Resources Interconnection and Interoperability with
the Electricity Grid.” National Renewable Energy Laboratory. 2014. http://www.nrel.gov/docs/fy15osti/63157.pdf.
185. Hummon, M. and S. Kiliccote. “DR Resources for Energy and Ancillary Services in the West.” Presented at the 2013
EUCI Conference: Western Energy Imbalance Market Demand Side and Transmission Solutions. August 2013. http://
www.nrel.gov/docs/fy14osti/60165.pdf.; Cappers, P. et al. “An assessment of the role mass market demand response
could play in contributing to the management of variable generation integration issues.” Energy Policy. 48.
p. 420–429. 2012.; Cochran, J. et al. “Integrating Variable Renewable Energy in Electric Power Markets: Best
Practices from International Experience.” National Renewable Energy Laboratory. 2012. http://www.nrel.gov/
docs/fy12osti/53732.pdf. Accessed January 16, 2015.; Denholm, P. et al. “Impact of Wind and Solar on the Value
of Energy Storage.” National Renewable Energy Laboratory. 2013. http://www.nrel.gov/docs/fy14osti/60568.pdf.
Accessed January 16, 2015.; Denholm, P. et al. “The Value of CSP with Thermal Energy Storage in the Western United
States.” Energy Procedia. 49. p. 1622–1631. 2014. Accessed January 16, 2015.; Miller, M. et al. “RES-E-NEXT: Next
Generation of RES-E Policy Instruments.” International Energy Agency’s Implementing Agreement on Renewable
Energy Technology Deployment. 2013. http://iea-retd.org/wp-content/uploads/2013/07/RES-E-NEXT_IEA-RETD_2013.
pdf. Accessed January 16, 2015.
186. Denholm, P. and M. Hand. “Grid flexibility and storage required to achieve very high penetration of variable
renewable electricity.” September 2010. http://www.sciencedirect.com/science/article/pii/S0301421511000292. Accessed
January 16, 2015.
187. National Renewable Energy Laboratory. “Western Wind and Solar Integration Study.” May 2010. http://www.nrel.gov/
docs/fy10osti/47434.pdf. Accessed January 9, 2015.
188. National Renewable Energy Laboratory. “The Western Wind and Solar Integration Study Phase 2.” September 2013.
http://www.nrel.gov/docs/fy13osti/55588.pdf. Accessed January 9, 2015.
189. National Hydropower Association. “Challenges and Opportunities for New Pumped Storage Development.” http://
www.hydro.org/wp-content/uploads/2014/01/NHA_PumpedStorage_071212b12.pdf. Accessed January 16, 2015.
EL-64 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015
190. Federal Energy Regulatory Commission. “Pumped Storage Projects.” http://www.ferc.gov/industries/hydropower/gen-
info/licensing/pump-storage.asp. Accessed December 31, 2014.
193. Department of Energy. “Demand Response and Energy Storage Integration Study.” http://www1.eere.energy.gov/
analysis/response_storage_study.html. Accessed January 9, 2015.
194. Department of Energy. “Demand Response and Energy Storage Integration Study.” http://www1.eere.energy.gov/
analysis/response_storage_study.html. Accessed January 9, 2015.
195. Federal Energy Regulatory Commission. “Frequency Regulation Compensation in the Organized Wholesale Power
Markets.” Docket Nos. RM11-7-000, AD10-11-000. 137 FERC ¶ 61,064. October 20, 2011.
196. Monitoring Analytics, LLC. “State of the Market Report for PJM 2013.” 2013. http://www.monitoringanalytics.com/
reports/PJM_State_of_the_Market/2013.shtml. Accessed April 3, 2015.
197. Monitoring Analytics, LLC. “State of the Market Report for PJM 2013.” 2013. http://www.monitoringanalytics.com/
reports/PJM_State_of_the_Market/2013.shtml. Accessed April 3, 2015.
198. Viswanathan, V. et al. “National Assessment of Energy Storage for Grid Balancing and Arbitrage - Phase II Volume 2:
Cost and Performance Characterization.” 2013. http://energyenvironment.pnnl.gov/pdf/National_Assessment_Storage_
PHASE_II_vol_2_final.pdf. Accessed April 3, 2015.
199. Department of Energy. “Demand Response and Energy Storage Integration Study.” http://www1.eere.energy.gov/
analysis/response_storage_study.html. Accessed January 9, 2015.
200. Quadrennial Energy Review Analysis: Pacific Northwest National Laboratory. “The Emerging Interdependence of the
Electric Power Grid & Information and Communication Technology.” 2015 (forthcoming at http://energy.gov/epsa/
qer-document-library).
201. Quadrennial Energy Review Analysis: Pacific Northwest National Laboratory. “The Emerging Interdependence of the
Electric Power Grid & Information and Communication Technology.” 2015 (forthcoming at http://energy.gov/epsa/
qer-document-library).
205. Edison Electric Institute. “EEI Survey Shows Electric Power Industry Made Record Levels of Investment in
Transmission and Distribution.” January 8, 2015. http://www.eei.org/resourcesandmedia/newsroom/Pages/Press%20
Releases/EEI%20Survey%20Shows%20Electric%20Power%20Industry%20Made%20Record%20Levels%20of%20
Investment%20in%20%20Transmission%20and%20Distribution.aspx#sthash.LebCzHKY.dpuf. Accessed January 5,
2015.
206. Edison Electric Institute. “EEI Survey Shows Electric Power Industry Made Record Levels of Investment in
Transmission and Distribution.” January 8, 2015. http://www.eei.org/resourcesandmedia/newsroom/Pages/Press%20
Releases/EEI%20Survey%20Shows%20Electric%20Power%20Industry%20Made%20Record%20Levels%20of%20
Investment%20in%20%20Transmission%20and%20Distribution.aspx#sthash.LebCzHKY.dpuf.
207. Energy Information Administration. “Electric power sales, revenue, and energy efficiency Form EIA-861 detailed
data files.” October 29, 2013 (data from 2012). http://www.eia.gov/electricity/data/eia861/. Accessed January 16, 2015.
QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015 EL-65
Appendix C: ELECTRICITY
215. Tweed, K. “SCE, PG&E Issue First Energy Storage Requests to Comply With AB 2514.” December 4, 2014.
216. Wesoff, E. “AES Surpasses Milestone: 100 MW of Grid-Scale Energy Storage.” October 7, 2013. Greentech Media.
http://www.greentechmedia.com/articles/read/AES-Surpasses-100-MW-Grid-Scale-Energy-Storage-Milestone. Accessed
January 16, 2015.
217. Tweed, K. “Texas to Overhaul Its Grid-Balancing Services With Energy Storage.” December 2, 2014. http://www.
greentechmedia.com/articles/read/Bring-on-the-energy-storage. Accessed January 16, 2015.
218. Federal Energy Regulatory Commission. “DPL Energy, LLC.” Docket No. ER13-1744-000. 144 FERC ¶ 61,109. p. 3.
August 7, 2013.
EL-66 QER Report: Energy Transmission, Storage, and Distribution Infrastructure | April 2015