• While Administration Focuses on Energy, DOE Budget Signals Downward Trend in Federal Transmission Research
  • April 20, 2007
  • Law Firm: Troutman Sanders LLP - Washington Office
  • The Bush Administration recently announced a increased focus on energy dependency and rolled out its Advanced Energy Initiative.  Despite this policy focus by the President, which was mentioned in some detail during the President’s State of the Union address, the Administration’s FY 2008 budget proposal signals a possible decrease in federal research and development in electric transmission. 

    Traditionally, the Department of Energy (“DOE”) invests in high-risk, high-value energy research, development, and demonstration projects that might not otherwise be developed in the private sector.  Through its Office of Electricity Delivery and Energy Reliability (“OE”), DOE supports a portfolio of research on advanced electric transmission technologies, including superconductivity transmission wire.  OE’s goals are to increase energy reliability, energy and system efficiency, and security.  For FY 2008, the budget proposes that OE’s R&D program will use $86 million for targeted R&D activities to strengthen grid stability, reduce frequency and duration of operational disruptions, and increase efficiencies.  OE will also be involved in implementing the EPAct requirements in transmission and energy corridor designation and coordination of Federal agency transmission line permitting.  However, recent analysis of the Administration’s Fiscal Year 2008 (“FY 2008”) budget proposal suggests that federal research and development in electric transmission technologies may be significantly decreased.

    The President’s FY 2008 budget for the DOE purports to stress investment in technologies to address the need for affordable, clean, and reliable energy.  Overall, the $24.3 billion requested for DOE is an increase from Fiscal Year 2007 (“FY 2007”), where the President requested $23.6 billion for the agency.  Although this budget request continues the trend of increases to DOE funding across the department, the slice of the budget allocated to OE has been reduced by almost $10 million from the President’s budget request for FY 2007, repeating the pattern set a year earlier.  In FY 2006, OE received $158.1 million, but the FY 2008 budget proposal only requests $114.9 million, a decrease of 27 percent.  

    Both the President’s FY 2007 and FY 2008 budget proposals reflect a reorganization of the subprograms under OE’s Research and Development (“R&D”) program.  OE phased out completed activities within the Distributed Energy subprogram and attempted to foster efficiencies by merging other subprogram activities.  Five of the six activities formerly comprising the R&D subprogram at OE will be reorganized; only High Temperature Superconductivity (“HTS”) R&D will not be reorganized, but it will see its funding cut by over $20 million from FY 2006 levels.  In their place, OE created three new activities in an attempt to capitalize on the complimentary synergies and programmatic alignments that have emerged over the past few years.  The new activities under the Research and Development subprogram at OE will be:

    • Visualization and Controls R&D (also known as Transmission and Distribution Grid Planning and Operations), for which the budget proposes $25.3 million, an increase of $7.75 million from the request for FY 2006.  This subprogram will focus on the comprehensive control system security effort.  Under the reorganized R&D program, Transmission Reliability R&D, Electricity Distribution Transformation R&D, GridWise, and GridWorks activities will shift to the Visualization and Controls R&D subprogram.
    • Energy Storage and Power Electronics R&D, for which $3.8 million more was requested in FY 2008 than in FY 2007.  The increase in funding for this subprogram will: 1) leverage understanding gained from previous energy storage demonstration activities to research and develop new advanced higher energy density materials and storage devices for utility scale application; and 2) in Power Electronics, focus on enhanced research to improve material and device properties needed for transmission-level applications.  The current work of Energy Storage R&D will shift to Energy Storage and Power Electronics.
    • Renewable and Distributed Systems Integration R&D (titled Distributed Systems Integration in the FY 2007 budget request), which was $4 million higher than the FY 2008 request.  This activity transitions away from generation technology activities toward grid integration of distributed and renewable systems. 

    Despite the restructuring and cuts in funding, OE’s mission remains focused on improving the energy infrastructure.  The stated R&D goals for the office are to: (1) strengthen grid stability and reduce frequency and duration of operational disturbances; (2) increase energy efficiency of the electric delivery system through reduced energy losses; (3) reduce peak prices of electricity, increase asset utilization, and improve accessibility to a variety of energy sources for electricity generation; and (4) harden energy infrastructure so that it can detect, prevent, and mitigate external disruptions to the energy sector.  The FY 2008 budget continues to fund the High Temperature Superconductivity R&D program for “second generation” wire development, in addition to research on dielectics, cryogenics, and cable systems, while decreasing the effort on motors and generators.  These programs are designed to address the need to increase the carrying capacity throughout the grid. 

    The President’s budget proposal does not reflect DOE’s final funding levels; those are determined by Congress in the annual appropriations process, currently underway.