FERC’s new red tape likely to drive up price of electricity

OPINION:

Consumers really start to pay attention to their electric bill as the mercury soars. So it’s a bit curious that the Federal Energy Regulatory Commission chose the dog days of summer to adopt a critical order about how electric transmission companies should go about connecting new power sources to the grid.

It’s the kind of rule that’s likely to drive prices in the wrong direction.

The same administration endlessly lecturing us about windmills and solar panels being the future is unwilling to part with regulatory concepts from the 19th century.

All of those wind, solar and battery companies that have been grabbing the billions in taxpayer cash handed out in last year’s massive “inflation reduction” spending bill are now eager to leverage that free money. They’re surprised to find it’s not so easy to do.

Electricity systems are complicated, and, on average, it takes five years to hook a new source to the grid. Unwilling to wait that long, these restive companies began demanding a speedier process.

As representatives of the Biden administration’s favored form of energy, they expected to receive the royal treatment. Yet they wound up confused at how a “progressive” administration could pretend the entire economy will be carbon dioxide neutral by 2050 if it is going to take half a decade to connect each set of windmills and solar panels to the grid.

FERC’s new rule was supposed to accelerate the process for them. As is often the case, however, federal “help” is actually making the problem worse. To start, the order is the longest in FERC history, with a docket of comments from interested parties beyond anything seen in the past. It’s not hard to see how nearly 1,500 pages of new red tape is a move in the wrong direction.

Naturally, such a complex order affecting an entire industry will be litigated endlessly — it’s what lawyers do. But the rule worsens the situation with provisions that encourage appeals to FERC, while leaving key concepts undefined.

The order also mandates compliance filings, in which companies must spell out their implementation plans. Those filings will also be contested, introducing further uncertainty to business calculations.

So, instead of expediting the interconnection process, the federal government becomes further enmeshed in what previously had been mostly local and regional decisions. This is relevant to the current congressional conversation over permitting reforms and how best to build high-voltage transmission lines.

Many on both sides of the aisle think FERC should have more authority under the theory that it will result in more transmission being built in a timely manner.

This new order ought to put such ideas to rest. Adding layers of federal review in permitting process furthers delay and increases the expense of compliance. Congress ought to review what FERC did before doing something careless with respect to reforming permitting and “improving” the siting, building and funding of high-voltage transmission. Power bills are high enough already. Let’s not make them worse.