A new agenda for FERC: outlining priorities for electric transmission reform
WASHINGTON (May 11, 2022)—In groundbreaking new research, R Street Institute’s Jennifer Chen and Devin Hartman develop electric transmission reform priorities that would provide over a hundred billion dollars in consumer net benefits while accelerating a reliable, clean energy transition. They apply these priorities to recently enacted reforms by the Federal Energy Regulatory Commission’s (FERC), including a notice of proposed rulemaking (NOPR) on transmission expansion planning reform and a final rule that improves the efficiency of the existing transmission system.
This paper is the first such research project to be released since the NOPR, and Chen and Hartman dive into FERC’s current flawed regulatory structure that hampers investment, efficiency and innovation. In doing so, they identify areas for reform and explain how recent actions by FERC have mixed results.
“The NOPR appears to make progress on two customer priorities: improved planning and optimizing existing infrastructure,” say the authors. “However, it backtracks on customers’ competition priority, perhaps in a profound manner.”
Improving the efficiency of the existing transmission system can save consumers billions in annual costs and considerably expand clean energy utilization. Prioritizing reforms based on customer interests would have positive impacts on building a comprehensive national framework for transmission. Chen and Hartman stress that governance reforms ensuring independence, stakeholder inclusivity, transparency and accountability are essential to improving planning and operating practices.
Top three points:
- Outmoded transmission regulation gridlocks the clean transition, stifles innovation and raises consumer costs by billions annually.
- This paper identifies four customer reform priorities for FERC to tackle: improving transmission planning, optimizing existing infrastructure, ensuring effective competition and quality governance.
- Recent FERC actions show major progress on transmission expansion planning and utilizing existing transmission infrastructure, but have mixed results around governance issues and severely harm competition.
Read the full study here.