Dear Chairman Manchin, Chairman Pallone, Ranking Member Barrasso and Ranking Member McMorris Rodgers:
On behalf of the Electricity Transmission Competition Coalition (ETCC) and the undersigned organizations, we urge you to protect electric ratepayers in any electric transmission infrastructure legislation, including H.R. 3684, the Infrastructure Investment and Jobs Act, now being debated. The legislation should ensure that electric transmission projects will be competitively bid, thereby reducing ratepayer cost increases that will result from increased transmission capital spending.
The transmission component of our members’ electric bills has soared. According to the Edison Electric Institute (EEI), transmission spending from investor-owned electric utilities surged 42 percent from $17.7 billion in 2013 to $25.1 billion in 2019. U.S. demand increased by 2.3 percent. Transmission projects subject to competition represent only about 3 percent of U.S. transmission investments between 2013-2017. Transmission additions subject to competition, however, have projected reductions of up to 33 percent and include a variety of other ratepayer protections.
The undersigned are not opposed to appropriately planned expansions of the transmission grid or transmission enhancements. We do, however, oppose transmission monopoly market power that leads to transmission capacity additions that are not holistically planned and costs that are not checked against alternative transmission and non-wires solutions. We support the addition of needed transmission capacity at the lowest possible cost.
It is important to remember that for every dollar spent on transmission, ratepayers will carry those costs every year for 40-50 years, plus maintenance costs that increase annually, plus a utility rate of return on equity in the range of 9-12 percent per year. The costs are significant.
A Princeton University study addresses the cost of President Biden’s net-zero emissions goal. It states, “High voltage transmission capacity expands ~60% by 2030 and triples through 2050 to connect wind and solar facilities to demand; total capital invested in transmission is $360 billion through 2030 and $2.4 trillion by 2050.”5 If transmission investments are competitively bid, consumers could avoid hundreds of billions of dollars in higher electricity costs.
In 2011, FERC issued Order No. 1000 to usher electric transmission competition into national policy. FERC took the position that transmission competition was in consumers’ interests and the public interest. FERC ordered that “rights of first refusal” for incumbent transmission owners be removed from all federal tariffs across the country. FERC’s order requiring that federal transmission expansion processes should have competitive pressures to ensure just and reasonable rates was upheld by the United States Court of Appeals for the DC Circuit and appellate courts across the U.S. But successful lobbying efforts by monopoly utilities at the state level quickly led to the enactment of additional state “right of first refusal” laws across the country, which preserve or reinstate transmission monopolies for incumbent transmission owners. Where state rights of first
refusal have not been put in place, local planning has supplanted regional planning, due in part to necessary local upgrades to an aging grid, but also as an effort to circumvent transmission competition under FERC Order No. 1000. Some utilities have relied on local planning as a means to avoid competition, contrary to the intent of FERC Order No. 1000, and consumers are paying the price through increased transmission costs.
We look forward to working with you and the Committee to ensure that consumers are protected from monopoly market power as appropriately identified transmission additions are planned. For more information, please contact Paul N. Cicio at [email protected] or 703-216-7402.
Ag Processing, Inc.
American Chemistry Council
American Forest and Paper Association
American Foundry Society
American Iron and Steel Institute
Arkansas Electric Energy Consumers, Inc.
Arkansas Forest and Paper Council
Association of Businesses Advocating for Tariff Equity
Can Manufacturers Institute
Carolina Industrial Group for Fair Utility Rates
Carolina Utility Customers Association, Inc.
Chemistry Council of New Jersey
Coalition of MISO Transmission Customers
Council of Industrial Boiler Owners
Electricity Consumers Resource Council
Eramet Marietta Inc.
Ford Motor Company
Formosa Plastics Corporation, U.S.A.
Foundry Association of Michigan
Glass Packaging Institute
Illinois Industrial Energy Consumers
Indiana Cast Metals Association
Indiana Industrial Energy Consumers
Industrial Energy Consumers of America
Industrial Energy Consumers of Pennsylvania
Industrial Energy Users-Ohio
Industrial Minerals Association-North America
Iowa Business Energy Coalition
Iowa Industrial Energy Group, Inc.
Iron Mining Association of Minnesota
Lehigh Hanson, Inc.
LS Power Development, LLC
Maine Industrial Energy Consumer Group
Maryland Office of People’s Counsel
Metalcasters of Minnesota
Michigan Chemistry Council
Midwest Food Products Association
Minnesota Large Industrial Group
National Council of Textile Organizations
National Retail Federation
North Carolina Manufacturers Alliance
Office of the People’s Counsel for the District of Columbia
Ohio Cast Metals Association
Ohio Energy Group
Ohio Manufacturers’ Association
Ohio Steel Council
Pennsylvania Energy Consumer Alliance
PJM Industrial Customer Coalition
Portland Cement Association
Public Citizen, Inc.
Resale Power Group of Iowa
Retail Industry Leaders Association
Riceland Foods, Inc.
Steel Manufacturers Association
Texas Cast Metals Association
Vallourec STAR LP
Virginia Manufacturers Association
West Virginia Energy Users Group
Wisconsin Cast Metals Association
Wisconsin Industrial Energy Group
cc: Senate Committee on Energy and Natural Resources
House Committee on Energy and Commerce
The Honorable Jennifer Granholm, U.S. Department of Energy