The US is focusing on modernising the electric grid through dedicated funding under the Infrastructure Investment and Jobs Act (IIJA) [also known as the Bipartisan Infrastructure Law (BIL)] and the Inflation Reduction Act (IRA). Independent estimates project that there will be a 60 per cent expansion in transmission systems by 2030, potentially tripling by 2050 to meet clean electricity and resiliency demands. The US Department of Energy (DOE), which is the nodal agency for the disbursement of BIL and IRA funds for clean energy programmes, is deploying several strategies to help reduce siting and permitting delays in the construction of new transmission projects needed to maintain reliability, reduce consumer costs, and enable the addition of new clean energy resources. This includes the Transmission Siting and Economic Development (TSED) grant programme (established by IRA); the Coordinated Interagency Transmission Authorizations and Permits (CITAP) Program (to improve the efficiency of federal permitting processes) and the National Interest Electric Transmission Corridors (NIETCs) (to unlock additional federal funding and siting and permitting tools).
Specifically, IRA provides USD760 million in TSED grants to support states and local communities in the siting and permitting of interstate and offshore electricity transmission lines (Section 50152) and another USD100 million to support planning, modelling, analysis and convening stakeholders (Section 50153). In line with this, on August 29, 2023, DOE announced a USD300 million funding opportunity announcement (FOA) as the first tranche of the programme. Going forward, two additional application phases will be available in summer 2024 and fall 2025.
Administered by the DOE’s Grid Deployment Office (GDO), the TSED grant programme is dedicated to supporting states, tribes and local governments in strengthening and accelerating siting and permitting processes of qualifying or covered projects; as well as the economic development in communities affected by the construction and operation of such projects. Qualifying or covered transmission projects include high-voltage interstate or offshore transmission lines [alternating current (AC) or direct current (DC)] that are proposed to be constructed and to operate at a minimum of 275 kV (for onshore) or 200 kV (for offshore) by an entity that has applied or informed a siting authority of its intent to apply, for regulatory approval. All awardees are required by law to share costs with DOE at least to the extent of 5 per cent.
Siting and permitting activities
The activities eligible for funding include studies and analyses of the impacts of qualifying projects; examination of up to three alternate siting corridors for covered projects; participation by the siting authority in regulatory proceedings or negotiations in another jurisdiction or proceedings at the Federal Energy Regulatory Commission (FERC) or a state regulatory commission (subject to 50 per cent cost share); and other actions that may improve the chances of, and shorten the time required for, approval by the siting authority. The latter actions could include increasing human resources capacity, such as staff or consultants; coordination within the state or with other state, tribal or federal jurisdictions; and robust engagement and communication with stakeholders including impacted communities. All activities except regulatory proceedings involve a cost share of 5 per cent.
Authorities receiving funding for siting activities must agree to reach a final decision on an application within two years after the grant is disbursed unless DOE extends the timeline. Unutilised funds must be returned to DOE.
Economic development activities
The eligible TSED award recipients for economic development activities include siting authorities; or any other state, tribal, or local government entity working with communities. Eligible applicants can partner with community organisations such as non-profits. Some of the examples of potential types of projects DOE could consider are sub-grant programmes enabling communities to propose local activities; investments in local energy resilience, such as microgrids or solar; affordable and sustainable housing; community infrastructure such as broadband, public safety facilities, community centres, green spaces or species habitat; job training and apprenticeship programmes; and low-income energy funds to reduce costs for qualifying community members. DOE is flexible and urges communities to propose projects tailored to meet local needs.
Under this head, DOE can make an award for economic development activities but cannot disburse the funds until certain milestones are hit in the transmission project development such as obtaining permits or commencement of construction. Awardees are required to contribute 5 per cent of the total costs.
The way forward
Interested applicants must prepare and submit a concept paper, a brief, high-level expression of interest containing approximately four to six pages. It should include seven pieces of information, namely, the basis of eligibility; a description of the proposal and objectives; identification of two to three high-level risks and challenges and possible risk mitigation strategies; schedule for the project including start dates for spending grant funds; identification of the transmission project; identification of qualification, experience and resources of the applicant to help ensure project completion; and requirement of partners if applicable. The deadline for submission of concept papers was November 17, 2023, while DOE is expected to respond to these in early 2024. The complete application deadline is April 5, 2024, with the final selection notification expected in the summer of 2024. DOE expects to make an award of about USD200 million for economic development activities and USD100 million for siting and permitting for up to 40 projects under each category. The period of performance may vary from 24 to 28 months.
In October 2023, GDO announced that two additional application phases will be held in summer 2024 and fall 2025. DOE intends to accept a second round of concept papers in August 2024, with full applications due in winter 2024-2025, and a third round of concept papers in fall 2025, with full applications due in winter 2025-2026.
Notably, while transmission developers are ineligible for TSED grants, DOE encourages collaboration with these developers to propose innovative solutions that enhance coordination across jurisdictions, streamline permitting processes and resolve bottlenecks. The latest financial aid is expected to facilitate studies, modelling, environmental planning and analysis to expedite decision-making and reduce application processing times. This is essential to address the existing challenges of lengthy siting and permitting processes and expedite the construction of transmission infrastructure to achieve the country’s clean energy goals.
