Building New Transmission: Experience to Date Does Not Support Expanding Solicitations

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The value of electric transmission is significant and well documented. Transmission infrastructure provides customers with a reliable and resilient flow of power, integrates diverse and cost-effective energy resources, enables production cost savings, reduces amounts and costs of planning reserve margins, and increases competition among supply resources for the benefit of customers. Incumbent transmission owners (“TOs”) have made the majority of the transmission investments in the U.S. and, more recently, a number of transmission projects have been subject to competitive solicitation processes (“solicitations”) and awarded to non-incumbent transmission developers. Some argue that these solicitations should be expanded. Proponents of such an expansion assert that expanding the scope of such solicitations will yield significant cost savings. Concentric found that incumbent TOs in independent system operators (“ISOs”) and regional transmission organizations (“RTOs”) that track project costs develop reasonable initial cost estimates, with final and/or updated project cost estimates falling between -2.9% and 7.0% of initial estimates. As such, there is no credible support for the claim that current transmission processes limit customer savings, or that expansion of competition will yield meaningful additional savings.

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