FERC transmission rule likely boon to consumers but Christie dissent is blueprint for litigation, analysts say

The rule “turbo charges the type of transmission that has served customers well,” said Devin Hartman, director of energy and environmental policy at the R Street Institute, a free market-oriented think tank. “On balance, it’s going to be a huge winner for consumers.”

“Good economic regional planning benefits consumers plain and simple, and we weren’t doing it,” Hartman said. “We were planning a lot of these systems for near term expectations.”

Transmission costs are at historically high levels, and 90% of those costs are on local and reliability projects that haven’t been evaluated for their economic merits, according to Hartman.

“The projects that use cost-benefit analysis, and especially when they’re put out for competitive bid, consumers tend to love that and the economic numbers that come back on those projects are really favorable,” Hartman said, noting he is still digesting the roughly 1,300-page rule. “This rule remedies the deficiencies that are undermining economical transmission expansion.”

Hartman disagreed with Christie’s criticism of requiring grid planners to consider states’ clean energy policies when developing their transmission plans.

“If you take state public policies as a given, the least-cost way to plan transmission is to account for that,” he said. “If you pretend that they don’t exist, then you’re going to develop some suboptimal infrastructure and total costs system-wide actually go up.”

If a state’s policies lead to uneconomic transmission, those extra costs can be assigned to that state through the cost allocation process, according to Hartman…

In a recent change, it appears that load growth has reemerged as a factor affecting grid planners, according to Hartman. “The rule really couldn’t come at a better time to say there’s a pure economic and reliability argument to do regional planning better,” he said.