R Street Testimony in Opposition to IL House Bill 4823, “Transmission Ownership Act”
Testimony from:
Josiah Neeley, Senior Fellow, Energy, R Street Institute
Testimony in Opposition to IL House Bill 4823, “Transmission Ownership Act”
March 24, 2026
House Public Utilities Committee
Chair Walsh and members of the committee,
My name is Josiah Neeley, and I am a Senior Fellow in energy policy with the R Street Institute, which is a nonprofit, nonpartisan, public-policy research organization. Our mission is to engage in policy research and outreach to promote free markets and limited, effective government including in relation to electric markets. Thank you for allowing me to share my thoughts with you on HB 4823.
Currently, states throughout the Midwest participate in a regional transmission organization known as the Midcontinent Independent System Operator, or MISO, but split on how best to build new electric transmission. Some states, including Illinois, allow regional transmission projects to be competitively bid, meaning that a variety of companies compete for the right to build, own, and operate these projects. Some other states, by contrast, have adopted so-called “right of first refusal,” or “ROFR” laws, which automatically assign the right to build, own, and operate these projects to the incumbent electric utility. HB 4823 would move Illinois into the ROFR category, eliminating competition from the process for large, regional transmission projects.
Eliminating competition for transmission projects would be bad for Illinois for three reasons. First, it would raise costs for consumers. High quality research on this topic has found that competitive bidding reduces the cost of electric transmission projects by 20-30 percent.[1] This can add up to significant cost savings. When R Street looked at a single tranche of projects approved by MISO, we found that the enactment of a ROFR in Illinois would raise project costs by an estimated $127 million.[2] Competitive bidding encourages cost savings and has also led to innovations in bid structure – such as cost caps or lower rates of return – that help protect ratepayers against cost overruns. Given the vast expansion of transmission that is anticipated in the coming years, enacting ROFR could result in billions in higher costs passed on to consumers.
Second, competition helps transmission projects get completed faster. This may seem counter-intuitive; after all, competition requires a bidding process, which takes time. Yet our research shows that in the MISO region competitive projects are completed an average of 200 days ahead of schedule, while non-competitive ended up being completed 150 days behind schedule, on average. Furthermore, non-competitive projects in MISO took an average of 59 days longer to complete than did competitive projects.[3]
Finally, enacting a ROFR requirement in Illinois would be bad policy because it is unconstitutional. The so-called Dormant Commerce clause prohibits states from discriminating against out-of-state businesses. ROFR requirements do just that. The constitutionality of ROFR laws is currently being litigated throughout the nation, including in the federal 7th Circuit Court of Appeals. While there is a division among courts, the strong likelihood is that were HB 4823 to be enacted, it would eventually be rendered invalid by ongoing litigation.
For these reasons, R Street opposes HB 4823.
Thank you,
Josiah Neeley
Senior Fellow, Energy
R Street Institute
jneeley@rstreet.org
[1] Johannes Pfeifenberger, et al., Cost Savings Offered by Competition in Electric Transmission,” The Brattle Group, December 11, 2019. https://www.brattle.com/wp-content/uploads/2021/05/17805_cost_savings_offered_by_competition_in_electric_transmission.pdf
[2] Josiah Neeley, ROFR in the Midwest: 2023 Legislative After Action Analysis, R Street Institute, August 28, 2023. https://www.rstreet.org/commentary/rofr-in-the-midwest-2023-legislative-after-action-analysis/
[3] Kent Chandler, Preliminary Analysis of the Speed of Competitive Transmission, R Street Institute, February 18, 2026. https://www.rstreet.org/outreach/preliminary-analysis-of-the-speed-of-competitive-transmission/