DOE Seeks Comment on Plans to Fund Dramatic Expansion of Electric Grid

The Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law, provides funding for a once-in-a-generation expansion of the U.S. electric transmission grid. Consistent with the Biden Administration’s objective to promote transmission infrastructure in order to facilitate changes in the generation mix and combat climate change, the Department of Energy (DOE) is establishing a program to be known as the “Transmission Facilitation Program” (TFP).

In early May 2022, DOE’s Grid Deployment Office issued a joint notice of intent (NOI) and request for information (RFI) to notify interested parties of its intent to implement the TFP and to seek input from stakeholders regarding the application process, criteria for qualification, and selection of eligible projects to participate in the TFP.

Under the TFP, DOE can offer three types of support to facilitate construction of new, replacement, and upgraded high-capacity transmission lines:

• Capacity contracts for up to 50 percent of the capacity of a proposed transmission project;
• Loans for the costs of carrying out an eligible project; and
• Public-private partnerships under which DOE will participate with an eligible developer in designing, developing, constructing, operating, maintaining, or owning a transmission project.

DOE proposes to conduct an initial solicitation limited to eligible projects seeking capacity contracts that could be in commercial operation by December 31, 2027, if authorized. DOE expects this initial solicitation will be issued later in 2022. In the second solicitation, to be issued in early 2023, DOE anticipates inviting applications for all forms of support available under the TFP: capacity contracts, loans, public-private partnerships, and projects connecting microgrids in Alaska, Hawaii, or a U.S. Territory.

To demonstrate eligibility for participation in the TFP, the entity seeking to carry out the project must certify at least one of the following regarding the proposed project:

• If proposing construction of a new transmission line that is not in an existing transmission, transportation, or telecommunications corridor, it must be capable of transmitting not less than 1,000 megawatts;
• If proposing an upgrade to an existing transmission line or constructing a new transmission line in an existing corridor, it must be capable of transmitting not less than 500 megawatts;
• If replacing an existing line, the existing line being replaced would be the one eligible for the TFP;
• If the project will increase the transmission capacity of an existing line of no less than 500 megawatts, this would be eligible for the TFP; or
• In the alternative, if an eligible project could connect an isolated microgrid to an existing infrastructure corridor in Alaska, Hawaii, or a U.S. Territory.

As a condition to facilitation of an eligible project using the tools available in the TFP, DOE must certify that: the eligible project is in the public interest; the eligible project is unlikely to be constructed in a timely manner or with as much transmission capacity in the absence of facilitation provided from the TFP; and there is a reasonable expectation that the proceeds from the eligible project will be adequate to recover the cost of DOE’s facilitation activities for the project.

DOE is broadly seeking comments from interested stakeholders on all elements of the proposed approach to the TFP, including:

• The TFP solicitation process and the evaluation of the merits of applications, including how the benefits of a proposed project should be measured;
• Whether DOE should establish a standard format and methodology for each applicant to present economic data, projections, analysis, and other information in support of an application for TFP;
• Methods and approaches for implementing the TFP that can leverage the funding available through TFP and accelerate new transmission development in the national interest, including by increasing resilience and reducing greenhouse gas emissions;
• What are the best tools to ensure the availability of a skilled workforce to support timely, efficient implementation, project continuity, and success;
• Regulatory or business barriers that might impede implementation of the TFP;
• What equity, energy, and environmental justice concerns or priorities are most relevant for the TFP;
• What data should DOE collect from TFP recipients to evaluate the impact of the program, and how should it be disseminated to the public;
• What forms of TFP support are expected to be most useful to connect microgrids to existing infrastructure corridors;
• Whether DOE should limit its first solicitation to applications seeking capacity contracts for projects that are able to commence commercial operation by December 31, 2027;
• Whether the types of contractual arrangements discussed in the NOI are appropriate vehicles for achieving the statutory requirements and goals of the TFP; and
• Any other input DOE should consider in the establishment and implementation of the TFP.

Comments on the NOI and responses to the RFI are due by June 13, 2022. If you have further questions on DOE’s TFP or any other electric transmission issues, please feel free to contact the DWT energy team.