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A Grid for Growth (Simon Mahan Commentary)

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The Arkansas economy is booming. A low cost of living, abundant outdoor amenities and recent industrial growth helped attract tens of thousands of residents. Political leaders are also seeking to draw in data centers, while the Southeast is experiencing considerable growth in electric vehicles, battery storage and solar manufacturing.

But all that growth is straining our grid, and the region’s power system remains stuck in the past.

That dynamic could soon change. A federal regulator, the Federal Energy Regulatory Commission, recently finalized a rule that’s slated to dramatically improve power line development in the region. The new rule addresses regional planning and cost allocation hurdles that have long hindered the buildout of critical grid infrastructure needed to bring cost-effective electricity sources online to meet new demand.

The grid operator serving most of Arkansas has planned and approved regional transmission lines across its northern region that are expected to deliver twice as many benefits compared with costs, bringing affordable clean power onto the system and ensuring reliability. A similar effort is needed to improve the grid across Arkansas.

The upgrade and expansion of the Gulf Coast’s transmission system is critical given the pace of old, costly fossil plant retirements. Meanwhile, there are more than 34 gigawatts of cost-effective projects waiting to connect to Arkansas’ grid. Given the lack of available transmission capacity, many of these projects are at risk of not being built.

Yet the industries seeking to invest in our state are demanding clean power. For example, a solar farm is slated to help power a U.S. Steel plant, contributing about $36 million in property taxes to Mississippi County during the next three decades.

These needs are only expected to grow in the coming years. If the Mississippi Delta region continues to see rapid economic and electricity demand growth, it will likely require more than three times the current regional transmission capacity, according to the U.S. Department of Energy.

Increased transmission capacity can also help keep the lights on. Arkansas has experienced powerful winter and summer storms in recent years that have knocked out power, sometimes for days. Increasing the size and number of lines connecting to neighboring states will expand Arkansas’ power options when extreme weather hits, reducing costs to consumers and the time people are left without power.

Regulatory processes have historically not considered all the benefits of transmission. Grid planners have also evaluated benefits over short timeframes, which put these regional projects at a competitive disadvantage compared to what amounts to band-aid local upgrades. The FERC’s rule requires a more complete assessment of the benefits of new lines, which will ensure these projects serve the economic development our local leaders want.

If properly implemented, the new transmission planning requirements will help ensure the regional system is built to enable the lowest-cost electricity and support future needs.

It’s up to our grid operator and state regulators to quickly implement these common-sense changes into their regulatory processes. It’s time to plan and build for Arkansas’ future.

Simon Mahan is the executive director of the Southern Renewable Energy Association and lives in Little Rock. He can be reached at simon@southernwind.org.
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