As the power grid continues to transition to one that is increasingly reliant on intermittent resources to meet demand for clean power, the role of transmission in delivering the output from these renewable resources has never been more critical. Over a decade ago, the Federal Energy Regulatory Commission (“FERC” or “Commission”) sought to spur transmission investment by promulgating Order No. 1000. Among other things, Order No. 1000 sought to open the transmission space to competitive bidding processes, under the assumption that these processes would encourage innovation and cost savings. Since that time, proponents of transmission competition have argued that significant cost savings can be achieved through competitive bidding processes; however, there has been very little real-world data on completed projects to validate these assertions.1 Now, ten years later, this data is beginning to become available for analysis. As policymakers consider how to promote the development of needed transmission and all its associated benefits to customers, it is critical that the real-world experience with competitive transmission be brought to light.
As shown in this report, a review of competitive projects that are now in service or in advanced stages of development clearly demonstrates that Order No. 1000 competitive solicitations have not been successful in driving cost savings and have added delays to the development of transmission infrastructure. Competitive solicitations added as many as 1000 days to the development of transmission projects, and many experienced cost escalations, further questioning the value of competitive solicitations.
This report was prepared on Behalf of the DATA Coalition: Ameren Services, Eversource Energy, Exelon Corp., ITC Holdings Corp., National Grid USA, Public Service Electric and Gas Company, Xcel Energy.
1 Concentric’s report, “Building New Transmission” dated June 2019, showed that incumbent transmission owners have successfully controlled costs for transmission projects that they have undertaken.