Article updated at 4:37 p.m. EDT June 4.

As coal-fired power plants go offline under U.S. EPA's Clean Power Plan, building new power lines to bring renewable energy to customers could spur $1.5 billion to $2.5 billion in investment over the next five years, according to an analysis by the consulting group ICF International.

The firm said the figure is a conservative estimate, based on calculating what new transmission might be necessary in the system of the Midcontinent Independent System Operator (MISO) and then extrapolating those levels to the entire country.

ICF said the investment levels are manageable -- representing less than 3 percent of the transmission capital expenditures expected over the next five years. But the timeline for getting infrastructure built could be challenging.

The Clean Power Plan would require states to write plans for reducing carbon emissions from fossil fuel plants, and many would do so by increasing their renewable energy output. Wind farms and solar installations are located in different areas than the coal plants they would replace and would require new electric connections -- which takes time to plan and build.


ICF predicted different transmission investment values from region to region. In the MISO area, additional upgrades under the rule could cost $500 million to $750 million to eliminate the possibility of electric reliability problems from a lack of transmission capacity.

Business starts soon

Because states are expected to start complying with EPA requirements in 2020, ICF said there may be significant financial opportunities for investors thinking now about that timeline.

"To the extent that the industry as a whole can be proactive about this and start planning, it sets the stage for us to be much more prepared when we get into the time frame of 2018 to 2020," said Kiran Kumaraswamy, a senior manager with ICF.

Many coal retirements will occur before 2020, and the difficulty will be in "identifying and constructing new transmission facilities to make sure that the level of infrastructure is in place in the grid for us to handle the new changes that will come up in the market," Kumaraswamy said.

In other words, transmission developers should start planning to get infrastructure in place even before states submit their final plans to EPA in 2016 through 2018.

ICF explained the transmission planning process could take a year, environmental impact assessments could take an additional 1½ years, state utility regulator reviews and approvals could last 2½ years, and permitting could take two years. Then, construction could last an additional three years.

"While many projects can be completed in 5 to 7 years, the process can also easily stretch to ten years for high voltage projects," according to ICF's presentation yesterday. "Stakeholders should strongly consider conducting detailed regional analyses as soon as this summer upon the announcement of the final rule."

Lots of moving pieces

Chris MacCracken, principal at ICF, noted that states have flexibility in how they might develop their plans, and there are "a lot of moving pieces to think about."

Planning, including transmission planning, will be much more complicated under the Clean Power Plan than under previous EPA rules, he said.

With the Mercury and Air Toxics Standards, for example, regional grid organizations knew which plants might go offline and when, and they knew how to handle the particular problems those changes might cause.

"The Clean Power Plan ... it's not a binary decision," MacCracken said. There are no set compliance decisions about whether a particular unit will operate, and that flexibility makes compliance "a lot more dynamic," he added.

MacCracken said solving potential reliability issues won't be as simple as crafting a reliability safety valve, as EPA did for the MATS rule, because state actions could shift year to year. Instead, it will require careful advanced planning.