On April 27, the Biden administration announced new proposed infrastructure initiatives that may enable developers to finally break ground on their “shovel-ready” transmission line projects, including over $8 billion in financing tools from the U.S. Department of Energy (DOE) as part of the administration’s effort to develop low-carbon energy. On the same day, the U.S. Department of Transportation (DOT) also issued new guidance on how federal and state agencies can work together to approve developers looking to use the land running alongside highways, known as the federal highway right-of-way (ROW), for construction of power transmission, clean-energy, and connectivity projects.
In the past, burdensome permitting processes often stalled plans to place high-voltage transmission line construction projects in the ROW, which left developers with no choice but to negotiate easements across private property, often leading to opposition, increased costs, and further delays. By providing funding and guidance, the administration seeks to address these issues and jumpstart new construction of transmission line, clean-energy, and broadband internet projects along the highways.
The Biden Administration Sets Aside $8.25 Billion for Transmission Line Developers
The DOE is offering up to $8.25 billion to support developers constructing high-voltage transmission lines. Nearly half of the funds — $3.25 billion — is available from the Western Area Power Administration’s Transmission Infrastructure Program in the form of low-cost capital for applicants planning to build transmission lines connecting to renewable energy sources in Western states. The remaining $5 billion is being provided by the DOE’s Loan Programs Office in the form of loan guarantees to applicants seeking to construct innovative power transmission projects, such as high-voltage direct current systems and transmission lines located within highway ROW. These two sources of funding could serve as a much-needed catalyst for transmission line projects, which require significant up-front investment to get off the ground.
Guidance Highlights Two Paths to Approval for Developers’ Right-of-Way Development Projects
The DOT’s guidance clarifies how the ROW can be used by developers of clean-energy and connectivity projects such as renewable energy, alternative fueling, and broadband internet. The guidance encourages state and federal agencies to treat these clean-energy and connectivity projects like power transmission projects of a traditional utility. The guidance highlights two different methods for developers to seek approval: (1) accommodation as a utility under 23 CFR Part 645 or (2) approval as an alternative use of the highway ROW under 23 CFR Part 710.
The first method allows for state approval of projects that satisfy the definition of “utilities” in the state’s federally approved utility accommodation policy. This means that the federal government need not review the projects on a case-by-case basis. However, utility accommodation policies differ from state to state, which can increase complexity in interstate projects.
The second method allows the Federal Highway Administration (FHWA) to approve individual projects as alternative uses of the highway ROW. Under this method, the FHWA can approve alternative uses within the ROW so long as they are “in the public interest and will not impair the highway or interfere with the free and safe flow of traffic thereon.” And because power transmission and clean-energy projects “provide an opportunity to reduce carbon emissions and are an important tool to address climate change,” the Acting Administrator has already determined they are in the public interest.
The DOT’s guidance highlights the administration’s new focus on using these methods to approve developers’ clean-energy and connectivity projects in the ROW. Additionally, the guidance encourages the FHWA to “collaborate as frequently as practicable with State departments of transportation in reviewing utility accommodation policies” and “foster an enhanced consideration of right-of-way and utility accommodation interests as part of the transportation planning process.” While the federal guidance and commitment of the FHWA is useful and a step forward, it will remain to be seen how state and local agencies with permitting authority respond.
The administration’s recent efforts have potential to facilitate high-voltage transmission projects that could help boost the country’s wind and solar power generation by almost 50 percent, according to some estimations. Furthermore, streamlined approval of transmission projects through state and federal coordination could create hundreds of thousands of jobs while strengthening transmission ties between neighboring power grids.