Power Distribution

A massive power outage that brought major U.S. and Canadian cities to a halt Thursday adds impetus to discussions now taking place in New England over building more power lines and, more importantly, who should pay for them. As recent experience has shown, few want electric lines built through their neighborhoods. At the same time, demand for power, especially during hot summers, continues to increase. The result may have been the darkness and gridlock that fell over New York City, Ottawa, Toronto, Detroit, Cleveland and other cities.

While it is too early to pin blame for Thursday’s events, the outage highlights the need to build new sources of electricity, and the lines to carry it, across the country. That is easier said than done. A fundamental problem is that providing reliable sources of electricity is a national imperative overseen by the Federal Energy Regulatory Commission. Siting power lines, however, is regulated by the states. As was recently demonstrated in Maine, where a proposal by Bangor Hydro Electric Co. to build a new transmission line across Washington County encountered stiff opposition, local residents often won’t allow their view to be compromised when they are not the beneficiaries of the power that will be transmitted.

To solve this conflict, FERC has directed states to form regional advisory committees to develop regional policies for handling power line siting and other issues. The trick will be to balance regional, and even national (or international, including Canada) needs for additional power with local interests in protecting neighborhoods and wild lands from the intrusion of new transmission lines.

An even harder problem to solve will be figuring out who should pay for new lines in an interconnected system where some new lines will benefit only a specific area. There is currently a proposal before FERC to “socialize” the cost, meaning everyone pays the same share. That means Maine ratepayers would pay the same increase per kilowatt hour as those in Southern Connecticut where a new power line is being built. But this asks poorer communities with less vibrant economies and lower power costs due to adequate supplies – i.e. Maine – to pay the same share at those who live in economically vibrant and growing communities where electricity prices will drop when the new supply is on line. The Maine Public Utilities Commission is considering whether to ask FERC to stop the socialized approach.

As an alternative, Maine proposed that the primary beneficiaries of a new project shoulder half the cost. The other half would be “socialized.” The allocation would be revisited every five years because those who benefit could change. It is not perfect, but it is simple. This approach makes more sense because Maine, which currently has an adequate supply of electricity but, because it still has open spaces, offers a more conducive environment for building new lines, should not bear the cost of, say, Connecticut’s growth.

If anything has been learned from Thursday’s events, it is that tough decisions lie ahead. However, the sooner questions of siting power lines and paying for their construction and upgrading can be resolved, the less likely the region is to see a repeat of Thursday’s widespread blackout.