Industry officials expect Senate Majority leader Harry Reid, D-Nev., to unveil as early as Monday new legislation to renovate the nation's electricity grid that is likely to include controversial exclusive federal siting powers.

Friday, a broad coalition of industry and environmental groups that have advised Reid on the bill outlined policy recommendations to rebuild the nation's power transmission system to accommodate President Barack Obama's plan to double renewable energy production within three years.

Specifically, the group is urging lawmakers to give the Federal Energy Regulatory Commission greater, even exclusive, powers to site high-voltage power lines that can distribute renewable energy - often generated in desolate areas of the country - to highly populated regions. The Energy Future Coalition's several dozen members includes the American Wind Energy Association, industrial engineering company Babcock & Brown (BNB.AU), Spanish renewables firm Iberdrolla (IBDRY), the National Audubon Society and the Solar Industries Association.

"Given what we know about transmission line construction, it's very likely that some eminent domain will have to be exercised," said Carl Zichella, director of the Sierra Club's western renewable program. Though, he adds, the group is proposing broad scale planning with as many stakeholders as possible early in the process "to avoid routing that creates the kind of problems that require extensive uses of eminent domain."

Reid said earlier this week an energy bill that included transmission and a mandate to increase renewable energy production could be debated in the Senate within weeks, though aides in his office said that Democratic leaders hadn't determined whether the bill would be a comprehensive package or a series of standalone bills. Monday, the Majority Leader will be hosting a "Clean Energy" Conference where he is expected to unveil the bill.

"I do expect them to move very quickly to introduce legislation," said Reid Detchon, the executive director of the Energy Future Coalition.

Energy Secretary Stephen Chu hinted Thursday the Obama Administration may support Congress seeking the new powers, saying that transmission had become a "national imperative" and a matter of national security.

Congress has spurred historic growth in the renewables manufacturing sector through tax credits, grants, loans and loan guarantees, making the U.S. one of the biggest producers of wind power in the world, but an aging and antiquated grid built for a different energy era is preventing many major projects from moving ahead.

Many utilities can construct new transmission lines within two years, but have to wait almost a decade for approval from local, state and federal authorities.

"It's one of the thorniest issues we face," said Bracken Hendricks, a senior fellow at the Center for American Progress, which has strong ties to the Democratic party.

Detchon said the new transmission system was a $100 billion to $400 billion market opportunity for the private sector. Bulk power line construction companies such as ITC power and Composite Power Corp. and firms that specialize in artificially intelligent grid systems such as Ambient Corp. (ABTG), Echelon Corp. (ELON) and Direct Energy, a unit of Centrica (CNA.LN) could benefit from the growth of the market.

With record growth to around 25 gigawatts of total wind capacity last year, the U.S. is now one of the world's biggest producers of renewable energy. But between 200 gigawatts to 300 gigawatts of drafted wind projects remain stranded on paper because there isn't the transmission capacity to link them to demand.

An example of the type of battle Reid's bill is looking to prevent is a ruling by the U.S. Court of Appeals for the Fourth Circuit ruling earlier this week. The court overruled the FERC's interpretation of the Federal Power Act, which would have allowed the agency to overrule state objections and permit the construction of power lines, such as the one proposed by New York Regional Interconnect.

The Obama Administration is also trying to reroute the forecast transmission bottleneck through the Interior Department. Secretary Ken Salazar said one of his top priorities is evaluating federal lands for their potential for transmission siting.

"Mapping out the transmission corridors across the vast stretches of (Bureau of Land Management] land where are there are not sensitive ecosystems that need to be protected might be appropriate," Salazar told reporters Friday.

"I don't believe we'll please everybody in the end, but I believe the time for this new-energy economy has arrived," Salazar said.

Reid may also try to add provisions to his bill that would try to limit the amount of electrons flowing through new transmission that aren't from renewable energy production, though that may be impractical for a number of reasons. Instead, the administration may try to prevent coal fired power plants from taking advantage of the new lines by regulating carbon dioxide emissions through the Clean Air Act permitting process.

Even if the government is able to pass a bill that gives new siting powers to FERC, Zichella admits meeting the president's goal of doubling renewable energy output, "is going to be a tremendous lift," and new power lines are likely to take years to come online.

FERC Thursday approved a new 1,000-mile transmission line that will connect a new renewable energy project in the western U.S., but said it wouldn't come online until 2014.

Analysts say Reid's transmission bill is likely to include much stronger exclusive siting powers than the legislation he filed last year that would have created "renewable energy zones," and given FERC powers to site in those areas.

-By Ian Talley, Dow Jones Newswires; 202-862-9285, Ian.talley@dowjones.com