The Missing Transmission Voices Emerge

Few energy issues are as top-of-mind as transmission policy for Congress, the federal executive, and the states. Transmission policy is unusually complex, substantively and procedurally, with large variances between regions and states. This often results in stakeholder confusion, misunderstandings, and overly simplified policy positions. Sentiment-based debates accomplish little in a field where the merits of reform come down to technical minutiae. Sound transmission policy formation requires a high level of expertise.

Two stakeholder groups have traditionally possessed the resources to provide this expertise. The first is commercial entities with concentrated interests, mostly incumbent utilities. Consumer interests are dispersed, creating a collective action problem where consumer groups have a massive shortfall of expertise and representation relative to transmission providers. The result has been a strong incumbent utility bias in transmission policy formation. It is a syndicate without competition and effective regulatory oversight, where most projects are allocated to monopoly utilities.

The second stakeholder group with robust transmission expertise are environmentally oriented organizations, whose resources largely derive from climate philanthropy. While well intended, the lopsided funding of progressive groups has resulted in transmission reform appearing to be a liberal cause, which alienates conservatives. This has stunted bipartisan buy-in for congressional transmission reform, constrained Federal Energy Regulatory Commission (FERC) progress, and prompted conservative state backlashes against reform.

Policy success, past and present, has been predicated on the emergence of the missing voices in transmission reform debates: consumers and conservatives. Since 2020, the R Street Institute has engaged both camps robustly, with our recent work culminating in April 2026. Here, we highlight takeaways from those efforts and apply them to the current transmission policy setting.

Consumers

R Street’s transmission consumer work has included two customer convenings, a paper, joint op-eds, events, regulatory comments, and regulatory complaints with consumer groups. This work included all the leading national transmission consumer groups, including traditional industrials and commercial consumers, data centers, transmission-dependent utilities, residential advocates, and broad consumer alliances.

Over the last half decade, the consumer problem statement has remained constant. As a customer alliance and R Street put it in a FERC filing on transmission cost management, “[t]he problem rests squarely on a regulatory system that is outdated and structurally flawed, resulting in a severe lack of economic discipline.” This results in billions of dollars in misallocated capital annually, which erodes net benefits to consumers and suppresses development of lower-cost generation. Transmission expenditures have tripled in two decades, and most costs stem from unilateral monopoly utility actions without any effective regulatory oversight. Relatedly, consumer groups lament governance problems, where the lack of transparency and accountability has eroded consumer confidence in transmission planning and cost allocation.

Consumer groups develop their own reform agendas individually and via ad hoc coalitions. R Street’s second convening helped to consolidate their agendas into a more holistic, actionable summary. It emphasizes four pillars:

1. Bettering future investment through improved planning. Consumers support holistic and proactive regional planning, including robust implementation of FERC Order 1920. This ensures reliable service at least cost to consumers, compared to piecemeal and reactive transmission planning. Consumers preferred a methodological criteria-based approach to interregional planning requirements, as opposed to an inefficient “one size fits all” determinations of transfer needs between regions. Some sought to reduce regulatory barriers to voluntary, merchant transmission projects as a more economical alternative to some mandatory transmission and generation build. Consumers also emphasized the need to improve load forecasting accuracy, especially given recent data center growth.
2. Optimizing use of the existing system. Consumers are bullish on the cost savings of advanced transmission technologies (ATTs) adoption, which boost transmission capacity on existing lines. They emphasize that rules to merely study or consider ATTs are insufficient to overcome the perverse utility incentives from cost-of-service regulation. Consumers largely dismissed the “shared savings” concept and instead prefer “good utility practice” reforms like FERC Order 881 that require utilities to use ATTs when they are economically prudent. Regulators could set transmission provider performance metrics to ensure cost-effective ATT use is the norm, not the exception.
3. Leveraging competition to improve efficiency. Consumers generally support competitive bidding and want a methodologically rigorous study on the cost savings of competition. They noted that while courts have typically struck down anti-competitive state right-of-first-refusal laws, consumers cannot rely on the trend and welcome regulatory changes that inhibit utilities’ ability to avoid competitive processes. Some consumers seek empowerment of the voluntary merchant model as another competitive pathway. This includes FERC requiring its inclusion in regional planning and reforms that remunerate its marketable services. Consumers were also interested in innovative hybrid merchant/regulated competitive models, which warrants exploration.
4. Improving governance and transparency. Consumers want all mandatory transmission projects subject to true economic review, whereas most currently are not. For example, California recently required utilities to report detailed transmission project costs and let customers obtain information through discovery. Introducing an independent transmission monitor could bolster cost monitoring and supplement economic regulation, especially outside regional transmission organizations (RTOs) where transparency is needed most. Many consumer groups support increasing independent transmission planning, especially outside RTOs, and reducing the amount of utility-initiated projects.

Conservatives

Transmission policy has bipartisan roots because it is vital to our country’s economic interests. The landmark congressional and FERC reforms that established contemporary transmission policy were enacted with overwhelming bipartisan support. Their aim was to enhance competitive markets. These reforms built on a sound thesis, but were incomplete and flawed. Identifying the proper role for government in transmission policy remains challenging given some natural monopoly characteristics, incomplete property rights, network externalities, and other so-called market failures.

Economical transmission benefits many parties, including consumers and any type of central plant generation. Among generators, large-scale transmission tends to disproportionately benefit wind and solar, given their geographic constraints. As the politics of renewables became more partisan, so did transmission. In 2023, a former conservative FERC commissioner dismissed a transmission problem, claiming that it is “all driven by renewable developers who are frustrated.” Today, aging transmission infrastructure, the return of load growth, and a costly regulatory status quo make sound transmission reform increasingly in alignment with conservative self-interest.

In October 2024, the R Street Institute and the Conservative Coalition for Climate Solutions held a right-of-center convening on transmission policy. The framework was rooted in sound economics and governance. This effort led to a report and ongoing dialogue, which emphasized:

1. The status quo is “outrageously inefficient” where the flawed cost-of-service regulation approach rewards overcapitalization, suppresses innovation, and socializes risk. Most transmission takes the form of incremental builds with no economies of scale nor any economic disciplinary mechanism.
2. Load growth “is pulling conservatives back into transmission policy discussion” as “[l]ow-cost, abundant energy buoys economic growth, and transmission is imperative to maintaining America’s competitive advantage.”
3. The policy agenda should “de-renewablize” with a goal to minimize all-in costs to consumers and taxpayers while achieving grid reliability.
4. The North Star is pure voluntarism in electricity markets, which makes reducing barriers to market-driven transmission a priority. A need to improve mandatory planning and cost allocation is also necessary, given its unavoidable predominance.
5. Specific policy priorities include advancing competition and choice, improving planning and cost allocation, upgrading existing infrastructure, and siting and permitting reform.

This effort subsequently led to the development of center-right transmission policy principles, released in April 2026. Their synopsis is:

1. Prioritize existing transmission improvements to ensure “good utility practices” for advanced transmission technologies—consistent with proper cost-of-service oversight—and efficient management of seams between regional transmission systems.
2. Remove regulatory barriers to voluntary, merchant transmission development, including in regional transmission practices and eligibility, to provide key grid services.
3. Refine mandatory transmission-planning and cost-allocation practices to follow economic principles, including use of robust cost-benefit and scenario analyses, planning horizons commensurate with long-lived infrastructure, cost allocation consistent with the beneficiary pays principle, and competitive bidding for transmission.
4. Reform transmission siting and permitting to protect private-property rights, tie permitting decisions to demonstrable harm only, improve information on project costs and benefits, maintain fairness across business models, institute appeals processes to redress restrictive decisions, and ensure changes to interstate transmission siting use federal backstop authority as a last resort.
5. Improve transmission governance through greater transparency and accountability, expanding roles for independent institutions, and closing holes in governance frameworks, such as the federal-state gap over local transmission projects.

A Promising Outlook

Synthesizing the consumer and conservative agendas reveals a promising outlook for transmission reform. After all, the conservative principles’ headline is a consumer-first framework, with the goal of transmission investment delivering reliable power at the lowest possible cost to end users.

Bipartisanship is usually required to enact transmission reform, and is always required to maintain and implement it well. Progressives have been at the transmission table for a while, and now conservatives have their own transmission agenda that aligns with consumer interests. When these interests aligned before, they prompted productive reform, such as FERC reforms in 2023 to reduce generator interconnection barriers. Such a broad movement is necessary to overcome the incumbent bias and competitive moats that produce inefficient regulatory practices.

The key to success is for stakeholders to focus on improving the quality of transmission policies and institutions. Productive reforms should be identified on their economic and governance merits, with their effects on technology deployment considered a byproduct. For example, reforms outlined by consumers and the conservative coalition will likely result in more economical interregional, regional, and ATT projects. It also will likely result in fewer expensive local and “reliability-need” transmission projects, as well as less investment in high-cost generation in import-constrained areas.

Conversely, stakeholders must avoid central-planning bias, executive overreach, and taxpayer burden. No single entity is sufficiently informed to prescribe optimal transmission investments, nor ever will be. Attempts to deviate from proper process and economic practice will result in suboptimal investment with unintended consequences. Shifting transmission costs to taxpayers is inconsistent with center-right principles. Pivoting from user-fee formats to broad public financing is generally considered inefficient economic policy, as explained by groups ranging from the Cato Institute to the Economic Policy Institute. When public funding has been tried for other power infrastructure, it eroded economic performance and exacerbated political polarization.

The best way to deploy transmission capital is vastly complex. The economical course of action is to improve transmission policies and institutions, and let investment patterns materialize organically. At a time when energy affordability grabs all the headlines, elevating consumer interests is ripe for bipartisan transmission reform.