Schumer’s $2.4 Trillion Tax Increase

The Senate Majority Leader lobbies FERC to socialize green-energy costs onto red states.

Progressive states don’t want to bear the trillions of dollars in costs for building out their green electricity grids. So now Senate Majority Leader Chuck Schumer is directing the Federal Energy Regulatory Commission (FERC) to stick red states with the bill.

Mr. Schumer last week sent a letter demanding that FERC expedite a “strong transmission planning and cost allocation rule” to deliver more “clean power to Americans.” He claims that disagreements among states on permitting new transmission lines and allocating their costs is stalling renewable projects.

Under FERC’s current rules, costs of transmission projects are allocated based on which parties benefit from improved reliability or reduced congestion costs. For example, Illinois residents would pay higher electric rates for a new transmission line to move power from a gas-fired plant in Wisconsin to Illinois to maintain reliability.

States in a regional transmission organization negotiate how to divide the costs, which hasn’t been controversial as long as projects solved reliability problems. The increasing problem now is that more than half of states have renewable energy mandates. New Jersey requires that 100% of power come from “clean sources” including 7,500 megawatts from offshore wind—enough to power about six million homes—by 2035.

Building long transmission lines to connect solar and wind plants to population centers isn’t cheap. Texans spent about $4.1 billion in 2021 on transmission fees, more than twice as much as in 2011, owing largely to the Lone Star State’s wind and solar build-out. Transmission costs for solar and wind are two to three times higher than for nuclear and fossil-fuel power.

A Princeton University study in 2020 estimated that a transmission system to achieve net-zero carbon emissions would cost $2.4 trillion by 2050. High-voltage transmission lines would have to increase 60% by 2030 and triple through 2050.

States without renewable mandates such as Arkansas, West Virginia and Tennessee don’t want or need heavily subsidized green energy from other states, which could drive their own baseload fossil-fuel and nuclear plants out of business. They also don’t want to pay for new transmission lines whose sole purpose is to help other states meet their renewable mandates.

No matter. Mr. Schumer writes that FERC should order states that “act as free riders” to pay for transmission upgrades. He also wants FERC to clarify its “backstop authority” to issue permits when states won’t. In other words, if West Virginians don’t want to pay for connecting New Jersey offshore wind farms to the grid, FERC should mandate that they pay anyway.

Democrats in Congress are refusing to consider permitting reform that doesn’t socialize the costs of their green energy build-out, which Republicans won’t abide. So Mr. Schumer is directing FERC to do an end-run around Congress. “The success or failure of this commission will be defined by how they address these critical transmission rules,” he says.

FERC is currently split 2-2, but Democrats will have a majority next year after Republican Commissioner James Danly’s term ends. Mr. Schumer wants the commission to impose a $2.4 trillion tax to build out the left’s green energy grid, which Democrats can’t get through Congress. As progressives like to say, democracy dies in darkness.