Despite calls by the Bush and Obama Administrations and energy legislation passed by Congress in 2005 to build more wind and solar power projects and upgrade the electric grid, the States will dictate when and if this ever occurs. Right now, any company that wishes to build an interstate power line to move electricity generated by wind or solar energy has to get the approval of every State that the line goes through. Because many projects cross several States, all it takes is for one State to object or not issue the required permit and the project is dead.

Is this the Tail wagging the Dog?
The Energy Policy Act of 2005 was supposed to make building large interstate power lines easier and usher in an era of renewable energy. Per the Act, the Feds also identified national transmission corridors. However, it also gave the individual States veto power over projects. All a State has to do is to deny a water quality certificate for the proposal. The States have exercised their rights in this arena and have denied water quality certificates for several large power line projects in 2009.

Recently, the electric power industry took the the State of New York and Minnesota to court over the issue of denying a water quality certificate for proposed power line projects. The industry lost the case big time. The lower court ruled that as long as a State denies a water quality certificate within 1 year, that they have a right to veto the power line project. More important, federal energy regulators have no right to overrule that decision.

The electric power industry appealed the lower court's decision to the US Supreme Court. Guess what, the Supreme Court refused to to review the lower court's decision so the States are essentially in charge.

What's this mean for Renewable Energy?
The Supreme Court's refusal to review the case will stop many wind and solar energy projects in their tracks. The Courts' decision will force wind energy and solar energy developers to rethink their approach to renewable energy. They will always have to consider the power lines as part of the project. After all, why would anyone want to risk capital by ordering many wind turbines before you knew that you could get the electrical energy to market? T. Boone Pickens really got burned by doing just that. Even more important, why spend capital and attempt to build a power line through several States when all it will take is one to kill the project. Some companies like Shell Energy may just decide that getting into the renewable energy is a waste of their time and capital.

Who are the Big Losers and Winners?
I think that you and I are big losers when it comes to seeing a lot of renewable energy projects built. I strongly feel that something is very wrong with this picture. On the surface it appears that we will not be benefiting from wind and solar energy projects, because of a silly battle between the States and the Federal government. That means that as the demand for power increases and supply and demand side management can't meet demand. that our electricity bills will go up. The court decisions will also affect our dreams of plug in and battery powered electric cars using renewable energy. Many of the future plans of companies like Better Place, actually rely on wind energy and other renewable to recharge batteries for their electric vehicles.

So who wins? The big winner may be natural gas-fired combustion turbines and combined cycled projects. Fortunately, these kinds of energy projects are relatively easy to site and there is an extensive natural gas pipeline systems to move the natural gas to the the units. Natural gas is in plentiful supply too and is produced mostly in the U.S. and Canada. Natural gas is relatively clean as well, but even most proponents think of it as a transition fuel to a more renewable energy future.

What can we expect next?
Right now the electric power industry is rethinking assumptions and I am sure that they will try to persuade members of Congress to change things in the two energy bills that are before Congress right now. Don't count on it though. I think it will be business as usual in Washington DC and that Congress will not have to spine to acknowledge the problem and craft a law that brings some sanity to the problem. Congress and many others prefer not to speak about the real issues that plague companies who try to build energy infrastructure projects. I call pretending not to call attention to the "Elephants in the Room." See our article on the Elephants in the Energy Plan.

Most State energy regulators might be relieved by the Courts' decision. However, they are now in the cross hairs of every American who wants to see more renewable energy. The States will have to craft a viable way to build power lines and get that renewable energy flowing to where it's needed. If States that have wind and good solar energy resources can't find common ground with those States along a proposed power line corridor and the States where the demand for power is high then very large power line and renewable energy projects will not be the norm. They will be the exception to the rule or relatively shorter lines crossing a few States.

Wind and solar energy projects won't just fall by the wayside, but those that are actually built will be the exception. For example, wind and solar energy projects could serve adjacent States, but the idea of an Electric Super Highway where renewable energy will power our economy will be a pipe dream. Perhaps with drastic improvements in solar and wind technologies we will see more decentralized siting of these projects.

I’m open to critics, but I have a business to run
Some of you may think that energy comanies will not abandon renewables. I wish that I could be more optimistic. However, some of the larger companies will merely turn their attention to more attainable goals. A good example is Peter Voser, Shell's Chief Executive Officer. In an interview entitled "I’m open to critics, but I have a business to run," Mr Voser basically says that Shell is going to be working on biodiesel because it's large market, with reasonable returns. They are not going to get into renewables where there is great uncertainty and risk. 

While I am not enthusiastic about the above statements regarding renewables" I think the interview is something that State and Federal energy regulators have to take to heart. If they don't then maybe the States and Federal Government should be shouldering the risks and building these renewable energy super highways aka interstate power lines.

Why so much opposition from the States?
State regulators have never really gotten along well with federal regulators in Washington DC. Find this hard to understand? Just watch any popular TV show and you will find a scene that pits the local cops against those dumb feds. The States firmly believe that deregulation has increased electricity prices and everyone remembers the California and Western Energy Crisis in the early 2000. That sentiment runs deep today.

When it comes to power lines, many States just believe the lines may be too expensive and are really not needed. This seems to be at odds with most people's desires to see renewables produce more power. However, remember that State regulators are concerned about "their State" first and everything else second. It really doesn't matter if the polls show that a majority of people in the U.S. want renewable energy or the power grid to be strengthened.

A question that many State regulators focus on is "who bears the costs" of a given project. A basic question and challenge for power line and renewable energy projects is "who sacrifices what for who." Many people in remote areas feel like they are being asked to make sacrifices and accommodate power lines, while the benefits go to those receiving the renewable energy. They may have a point. State regulators in Arizona fought a power line that would bring power from Arizona to power hungry California. The Arizona regulators believed that there was not enough benefits in the project for them and that the costs of electricity for Arizona rate payers would go up. The power line proposal was delayed and later withdrawn by Southern California Edison who cited other reasons for the withdrawing the Arizona portion of the project.

What's next?
In the end though we all have to keep one thing in mind. State and federal government regulators with few exceptions (federal power authorities like TVA, BPA, WPA, and SWPA) are not the people who raise capital, take the risks and actually build energy projects and power lines. This is the domain of the private sector. If energy companies begin to have serious doubts about renewables and expanding the electric power grid across the States they will turn to more certain avenues to providing citizens with reliable sources of power.

The States will have to work together on a regional basis to overcome the obstacles discussed above. If they can't do that then energy companies will just pay lip service to renewables or build them only when conditions are ideal. Those States that are blessed with good wind resources will serve their own needs, but this will result in only tapping a minor percentage of those resources. States. States that are very far away from the Midwest or other areas with reasonable renewables will go wanting.

In the absence of good odds of succeeding in siting interstate power lines, companies will take the paty of least resistance. They will still be requiired to serve us. While the power may indeed not be generated by wind and solar energy, but at least the lights will go on when we flip the switch and in the end that's all that most of us expect.

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