The Electricity Law Initiative filed a comment at FERC about its April 2022 proposal that would require utilities to engage in long-term transmission planning exercises. The Electricity Law Initiative’s comment responds to FERC’s proposal to end competitive transmission development processes and replace them with joint ventures between investor-owned utilities (IOU).
The Electricity Law Initiative argues that joint ventures will not replicate the benefits of competition. Free from competitive pressures, pairs of IOUs will not reduce transmission development costs or propose innovative transmission solutions. To the contrary, FERC’s proposal will reinforce IOU advantages in regional transmission development and allow them to reestablish the IOU cartels that have historically dominated power sector infrastructure development.
The Electricity Law Initiative suggests three alternatives to the Commission’s proposal. First, the Commission could defer reforms to competitive development processes to another proceeding where it would comprehensively evaluate incentives and oversight mechanisms designed to achieve FERC’s transmission development objectives. Second, FERC could let state regulators decide the scope of competitive development. FERC proposes to enhance the roles of state regulators in transmission planning processes, and FERC could reasonably expand states’ roles to include decisions about competition. Third, FERC could grant IOUs a right to own no more than fifteen percent of projects developed by competing developers. This proposal is designed to temper IOU protests about competition by providing them with a slice of the benefits.