Economic Benefits

New report highlights electric transmission benefits and savings

Updating the U.S. electric grid could save consumers billions on their electric bills.
New report highlights electric transmission benefits and savings
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A recently released white paper shows how improved transmission planning could save American families and businesses up to $47 billion on their electric bills every year and provide “insurance against risks associated with future uncertainties.”

Key findings from the report—entitled “Well-Planned Electric Transmission Saves Customer Costs: Improved Transmission Planning Is Key to the Transition to a Carbon-Constrained Future,” prepared by the Brattle Group on behalf of WIRES — include:

  • More proactive, interregional transmission planning will help identify the lowest cost compliance options in response to various environmental regulations,
  • System-wide savings from a wide range of potential futures,
  • Improved reliability and increased wholesale market competition,
  • Help cost-effectively integrating increasing levels of often location-constrained clean energy onto the grid, among other benefits.

More wind needs more transmission

It’s clear that a “wind rush” is well underway across much of the U.S. However, the grid still needs to be updated to optimize new sources of low-cost wind power. We need to continue building the necessary transmission lines to transport wind energy from the best resources to the urban areas where affordable electricity is needed most. Brattle notes that this is particularly important as the U.S. generation mix transitions to a lower-carbon future.

Considering the length of time it currently takes to develop and construct transmission (typically five to 10 years); the current piecemeal approach to building transmission primarily for reliability reasons; and the aging state of existing transmission infrastructure (mostly built in the 1960s and 70s), now is the time to modernize the planning process.

Taking a holistic approach

Brattle also explains that as we plan that modernization, it should be on an interregional level, not constrained by arbitrary footprints, to maximize effectiveness and consumer savings. A more holistic approach is needed.

“Traditionally, utility-specific and even regional planning perspectives can be quite narrow in scope—only considering resources and system solutions available within a state—when a broader view could reveal attractive resource options and accompanying transmission solutions at a lower overall cost to customers. To achieve such a broader perspective, states (in complying with Clean Power Plan and other goals and regulations) should consider more explicitly the costs of siting new resources both within and outside their local and regional borders, including those resources that would be accessible only through new interregional transmission investments,” Brattle says.

While the Federal Energy Regulatory Commission attempted to address this gap in interregional planning via Order 1000, as the WIRES/Brattle report says, interregional transmission planning processes remain “largely ineffective.”  We agree and we would add that interregional cost allocation is also largely, if not wholly, ineffective.

Far-reaching consumer benefits

A more robust interregional transmission backbone is not only critical to integrating more renewable resources, but it also provides a broad range of benefits to grid operations. Despite compelling analysis like the Midcontinent Independent System Operator’s (MISO) HVDC Network Concept study, Brattle finds “that the value of flexibility [and load diversity] is not typically captured by traditional transmission planning processes that focus on meeting needs mostly for a “base-case” or “business-as-usual case.”

The Brattle Group’s white paper again reinforces the need to develop a smarter approach to building the infrastructure needed to reliably and cost-efficiently transition to cleaner energy sources.

The report helpfully highlights several successful planning efforts that have led to significant transmission builds in MISO, the Southwest Power Pool (SPP), ERCOT and Southern California over the last decade, noting detailed analyses demonstrating that the MISO and SPP efforts resulted in significant consumer benefits.  We agree that these processes– multi-value projects (MVP) in MISO, highway/byway in SPP, competitive renewable energy zones (CREZ) in ERCOT/Texas and the Tehachapi transmission line in California– are successful models important to replicate.

The Brattle Group and WIRES are not alone in their findings. SPP, a grid manager in 14 states, reports that transmission upgrades would save $800 for each of its customers over the next four decades. Likewise, the MISO, which manages the grid in another 15 states, found similar improvements could save each person it serves $1,000 in the coming years.

Continuing to upgrade the country’s transmission infrastructure is one way wind can help consumers save $149 billion through 2050, as DOE found in its Wind Vision report. More transmission is necessary to realize U.S. wind power potential and add more chapters to this American success story.

Economic Benefits

Betsy Rosenblatt Beck is the Director of Transmission Policy at the American Wind Energy Association. Betsy manages AWEA’s transmission efforts by promoting transmission investment and advancing rules and operations to better accommodate wind on the grid. Betsy has previously worked on electricity and renewable energy policy for Ranking Member Cantwell on the Senate Energy and Natural Resources Committee. She has also worked at FERC in offices of Enforcement and Commission Norris. Betsy earned a BSE in Materials Science and Engineering from the University of Pennsylvania.

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