Title: Vertically Integrated, Regionally Connected: IRPs and Transmission Planning in the Southeast
Speakers: Josh Combs and Andy Flavin
Andy Flavin (00:14):
So Josh, another thing I wanted to ask you. You talked about this integrated resource planning and vertically integrated states, kind of a state-by-state basis. The various public utility commissions in the Southeast are not a monolith, I think I heard you say. Now, while these vertically integrated Southeastern states may not be part of a market like PJM or MISO, an RTO, or an ISO, that doesn’t mean that there’s no regional transmission planning, right? Can you talk a little bit about how the states in the Southeast approach that regional transmission planning?
Josh Combs (01:04):
Yeah. And you’re absolutely right. They’re not operating off the grid in an island, right? Because you have your neighbors, your local neighbors within the states, but also your regional neighbors. And there’s coordination that happens at a local state and then the regional level.
For instance, in Georgia, while Georgia is not in RTO jurisdiction, it is a part of an integrated transmission system in which you have Georgia Power Company, Dalton Utilities, Georgia Transmission Corporation, that are all planning, right, and forecasting and developing plans as it relates to the state, right? And then from there, they are making decisions about what’s needed in Georgia to ensure that that reliability is not compromised and that costs are remaining affordable.
And then when you think about the regional level, a lot of the states in the Southeast, and I think that this doesn’t just apply to the Southeast, but particularly in the Southeast, you have the Southeastern Regulatory Transmission Planning process, or SERTP, and that is a coordination among transmission planning entities across 11 states, right? And through that process, that’s outside the IRP from at the state level, outside necessarily whatever kind of local coordination is going on. But looking more broadly at in the Southeast, what are we seeing in terms of economic development? What are we seeing in terms of reliability? And based on that coordination, projects are submitted through that process. There’s collaboration that goes on, there’s forecasting that goes on, and you’re basically wanting to eliminate some of any potential duplication, but also just ensure that you’re talking, right? I think the main thing with some of this planning is just talking with each other to understand where lines are going, where potential needs are going to arise to ensure that you are appropriately planning and executing on projects for the customers across those 11 entities.
And I think we’ve seen there’s going to be continuation of this coordination based on some requirements that are coming out of that. We won’t get into that to deep detail today, but some of the requirements coming from the federal level on what specific regional coordination has to occur and what plans and kind of engagement has to occur along the way. But I think that it’s through that regional planning and local coordination that you’re seeing some of the duplication of projects to be eliminated, but also just kind of streamlining and just ensuring that you are getting the right projects in the pipeline to serve customers. So that coordination certainly occurs.
It’s not mandated necessarily, but it certainly is occurring and is occurring in a proactive way for the benefit of the entire grid.
Andy Flavin (03:53):
Talking about certainly not only the transmission investment that’s necessary to accommodate the low growth that we’re seeing, but also the investment in generation as well. That costs a lot of money. And so in your experience, when a utility comes to a state commission with a potentially several billion-dollar capital plan, how does the commission distinguish between investments that benefit the system as a whole relative to those that may be driven exclusively or primarily by a single large load customer?
Josh Combs (04:41):
Yeah. Well, I’ll first say that through the IRP process, right, and that regulatory oversight, which is essentially it’s an intensive regulatory process in which plans are filed, testimonies filed, discovery happens, and there’s lots of engagement and collaboration along the way. And that’s being examined and analyzed in terms of when you have a load that’s coming in, and you have projects and dollars being spent, who is ultimately benefiting from those investments? And so that’s happening through that process.
But I will say that relatedly, right, to this question is that what you’re seeing in this current environment where you have this unprecedented low growth, is that whether it’s through state legislatures or through the state commissions themselves, and I kind of have always, going back to law school and common law, thinking about states as individual labs, right? Have come up with various ways in which they are protecting customers, right? Because affordability is undoubtedly, it’s on the minds of everyone, right, across the board. And so utility commissions are implementing protections and requirements when it comes to some of the load that’s coming in, whether it’s from manufacturers, data centers, et cetera, to protect customers from having to foot the bill from some of these investments.
And I think we’ve seen this manifest itself in various ways throughout the country through legislation and through specific regulatory requirements where they are requiring certain contract terms, requiring certain load to remain on the grid, and really kind of analyzing along the way as new load is coming in, analyzing the investments, analyzing the impacts, and looking at the cost to see should these really be paid for by all customers, or should it go to be directly assigned or somehow allocated to that specific customer in a more fair way. So it’s happening through the IRP process, but I’ll say that through states, as through their individual labs, they are coming up with various mechanisms, protections to try and ensure that all customers are not being burdened or having to kind of foot the bill for investments that are really benefiting just a small few customers on the grid.
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