By Shelley Welton
This Article examines the reasons that “non-transmission alternatives”—including energy efficiency, energy storage, demand response, and distributed generation—have played a very limited role in meeting electricity grid constraints, despite their great potential. It argues that the predominant reasons for this failure lie in structural flaws in transmission planning in the United States, caused in part by questions over how far the jurisdiction of the Federal Energy Regulatory Commission (“FERC”) extends when it comes to these “non-transmission” resources. FERC has declared achieving “comparable consideration” for non-transmission alternatives to be an Agency goal, but has limited the extent of its reforms to opening up the planning process to stakeholders. It has enacted these limited participatory reforms knowing that transmission planning is carried out by entities with expertise biases and financial incentives to build transmission, such that stakeholder participation is an unlikely remedy for the problem. This Article illustrates why participatory reforms alone are likely to fail non-transmission alternatives, and then explores the jurisdictional limitations holding FERC back from creating transmission planning processes that fully and fairly incorporate non-transmission alternatives. In addition to suggesting ways that FERC can improve planning processes within its jurisdiction, this Article argues that the Commission does a disservice to the regulatory dialogue that occurs among Congress, the Agency, states, and stakeholders when it claims to have accomplished an objective that its reforms will do little to achieve in practice. It closes by suggesting that FERC might be more honest about the shortcomings of its reforms in order to inform inter-branch and state-federal conversations about options for progress on non-transmission alternatives.
Cite as: Shelley Welton, Non-Transmission Alternatives, 39 Harv. Envtl. L. Rev. 457 (2015).