In a June 2019 report authored by Concentric Energy Advisors, Inc. (the “Concentric Report”) for Ameren, Eversource Energy, ITC Holdings Corp., National Grid USA, and PSE&G (the “Client Group”), Concentric reviewed claims made by the Brattle Group (“Brattle”) in an April 2019 report (the “Brattle Report”) commissioned by LSP Transmission Holdings, LLC that transmission solicitations held in the U.S. have produced significant savings and that solicitations should be expanded. The Concentric Report concluded that the Brattle Report’s savings estimates were methodologically flawed and that the Brattle Report provided no basis to expand solicitations for transmission projects at this time.
In August 2019, Brattle released a response to the Concentric Report (the “Brattle Response”). Concentric has reviewed this response and determined that it offers no substantive new information. Concentric and the Client Group stand by and reaffirm the Concentric Report’s conclusions that there is no basis for the Brattle Report’s claim that transmission solicitations have saved between 18-60%, or that solicitations should be expanded to include between 25% or 33% of all transmission investment in the United States.
Specifically, Concentric and the Client Group reaffirm the following issues with using the Brattle Report as a basis for expanding transmission solicitations:
- The final costs of the majority of the transmission solicitations included in the Brattle Report’s analysis are unknown. The Brattle Response relies on one old U.S. solicitation and three international solicitations to justify its cost savings claims.
- The Brattle Report’s savings estimates from solicitations were based on inappropriate comparisons, for example, comparing winning bids with planning-level estimates or comparing the bids for different projects at different points in time.
- The Brattle Report used a limited and non-representative sample of incumbent transmission owner projects, such as discarding 70% of the projects in the PJM database and only analyzing 14 of the over 125 projects in the ISO New England database, to claim that incumbents experience significant cost escalation. By contrast, Concentric largely based its analysis of incumbent transmission owner project cost estimates on the same data used in the Brattle Report but relied on a much more comprehensive sample of transmission projects.
In conclusion, Concentric and the Client Group stand by our evaluation of the available data and continue to believe that there is no basis to expand transmission solicitations at this time. Please email info@ceadvisors.com to get in touch with the authors of the Concentric Report.